Server Market Size & Share 2024-2032
Market Size by Product (Rack, Blade, Tower, Micro), by Organization Size (Large Enterprises, SME), by Distribution Channel (Direct Sales, Distributors, Systems Integrators), by End User.
Report ID: GMI10678
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Published Date: August 2024
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Report Format: PDF
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Authors:
Preeti Wadhwani, Aishvarya Ambekar
Server Market Size
Server Market size was valued at USD 119.8 billion in 2023 and is estimated to register a CAGR of over 10% between 2024 and 2032. The expansion of data centers worldwide is significantly driving the demand for servers. As businesses and cloud providers build larger & more advanced data centers to handle increasing workloads and data volumes, the need for additional server infrastructure grows.
Server Market Key Takeaways
Market Size & Growth
Key Market Drivers
Challenges
This expansion supports greater storage capacity, enhanced processing power, and improved network efficiency, thereby fueling the ongoing server market growth. The market is also seeing significant investments in AI-centric infrastructure to meet the growing demand. For instance, in April 2024, Microsoft and OpenAI launched an ambitious project to construct a USD 100 billion AI-centric data center in the U.S., to address the growing demand for servers, driven by advancements in AI.
Additionally, the introduction of 5G technology is anticipated to significantly increase server demand. 5G networks provide higher bandwidth, lower latency, and faster data transfer rates, which will boost data traffic volumes and enable new services and applications, such as enhanced IoT solutions, Virtual Reality (VR), and Augmented Reality (AR). To support these advancements, servers must possess the necessary processing power and capability to manage the increased data load. The growing need for reliable and powerful servers is essential for handling expanded network capabilities and ensuring the seamless delivery of cutting-edge services and applications.
The server market faces numerous challenges including supply chain disruption and sustainability challenges. Supply chain disruptions and component shortages have notably impacted server production and shipment schedules. Semiconductor shortages and logistical challenges have caused delays and increased costs, affecting the availability of critical server components. While manufacturers have gradually improved their production capacity and adapted to these supply issues, the ongoing need for efficient & timely sourcing of components continues to influence the global server shipment dynamics and production timelines, thus hindering market growth.
Server Market Trends
The continuous evaluation of server technologies such as software-defined infrastructure, security, edge and quantum computing, artificial intelligence optimization, memory-centric computing, hybrid cloud-edge integration, energy efficiency, containerization, and customized solutions supports the development and maintenance of adaptable and effective IT infrastructure for corporate innovation and digital transformation. As the market continues to evolve, further innovations in areas such as AI acceleration, edge computing, and sustainability, with major players competing to provide the most efficient, powerful, and flexible solutions to meet the diverse needs of modern enterprises and cloud providers is anticipated to drive the market growth.
Additionally, the increasing integration of AI in servers enables organizations to leverage machine learning algorithms for data analytics, predictive maintenance, and pattern identification. Hardware manufacturers are also innovating to meet the demands of AI and machine learning workloads. For instance, in January 2023, NVIDIA launched new AI-powered server technologies, including the A100 Tensor Core GPUs, which provide enhanced performance for AI and machine learning workloads. The company continues to lead in AI hardware development for data centers.
Server Market Analysis
Based on product, the market is divided into rack, blade, tower and micro. In 2023, the rack segment was valued at over USD 70 billion and is anticipated to experience substantial growth over the forecast period. Rack servers are independently mounted in a rack and configured to accommodate a wide range of needs. Their structure and design cater to both high and low computing requirements. Additionally, rack servers can be quickly cooled, readily scaled up, and require less floor space.
The increasing demand for high-density computing, scalable data centers, and developments in cutting-edge technologies like edge computing, cloud computing, and the Internet of Things are all contributing factors to the segment's growth and offering market participants enormous opportunities. Rack servers enable businesses to set up servers for their own use by providing a more affordable means of processing and storing data. Many major players are also addressing the growing demand for IoT and edge computing solutions. For instance, in June 2023, HPE launched new IoT-focused solutions that include rack servers equipped with advanced connectivity and processing capabilities. These solutions are aimed at supporting IoT deployments and integrating with HPE’s edge computing offerings.
Based on organization size, the server market is categorized large enterprises and SME. The large enterprises segment is anticipated to register a CAGR of over 9% from 2024 to 2032 and is poised for significant growth over the forecast period. Large enterprises are focusing on hosted application servers because they can handle workloads from multiple sites, typically using the same database. Hosted application servers are easier to install than traditional application servers, which helps reduce operational and maintenance costs. They do not require upfront installation and need fewer system integrations, further lowering the overall expense.
North America dominated the server market with a major share of over 40% in 2023. The region is expanding due to the presence of advanced IT infrastructure, which is driving the demand for servers. This demand is further fueled by the increased presence of major technology players, their growing adoption of cloud-based services over on-premises solutions, and the integration of artificial intelligence, the Internet of Things, and sensors. As a result, the region is expected to continue its strong growth trajectory, solidifying its position as a key market for server technologies.
In Europe the market for industrial electric vehicles is growing because of the industries' adoption of eco-friendly production methods and growing demand for sustainability in manufacturing facilities. The market provides development, distribution, and other services for a variety of vehicle types that are useful for industrial regions' manufacturing, storage, and lifting needs. The market for industrial electric cars is expanding because of growing consumer preferences for electric vehicles and increased involvement from the key companies in the automotive industry in the development of these vehicles. This indicates a significant shift towards greener industrial practices and positions European countries as a leader in the transition to sustainable industrial transportation.
In Asia Pacific, the increasing industrial infrastructure development, including the expansion of the IT sector, banking, and financial services, as well as the rise of the start-up culture in the corporate sector is propelling the growth of the server market. The region is anticipated to see the fastest growth in the demand for servers, driven by increasing competition between the producers and retailers of server and related technologies. Consequently, Pacific nations are poised to become a major hub for server technology innovation and deployment, driven by robust industrial and technological advancements.
Server Market Share
Foxconn (Hon Hai), Inventec corporation, and Wistron corporation hold a significant market share of over 25% in Server market. These major players are introducing new product lines with enhanced processing power, improved energy efficiency, and integrated AI acceleration capabilities. They are also expanding their as-a-service offerings, providing flexible consumption models for server infrastructure to meet the changing needs of enterprises adopting hybrid cloud strategies.
Additionally, Chinese players such as Huawei and Inspur are gaining market share, particularly in the Asia Pacific region, by offering competitive pricing and tailored solutions for local markets. Some of the major players are also placing a strong emphasis on sustainability, developing more energy-efficient servers and exploring innovative cooling technologies to address the growing environmental concerns surrounding data centers.
Server Market Companies
Major players operating in the server market are:
Server Industry News
The server market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue ($Bn) and shipment (Units) from 2021 to 2032, for the following segments:
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Market, By Product
Market, By Organization Size
Market, By Distribution Channel
Market, By End User
The above information is provided for the following regions and countries:
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