Data Center Equipment Market - Size, Share, Industry Trends, and Forecasts (2025-2032)

By Product:

Based on product, the market is categorized into power distribution systems, storage devices, servers, networking equipment, and others.

Trends in the Product:

• Advancements in power distribution systems are focusing on energy efficiency and sustainability, with solutions such as smart PDUs and microgrids gaining popularity.
• The demand for high-capacity and high-performance storage devices is increasing, with trends such as NVMe and all-flash arrays gaining traction.

Servers accounted for the largest revenue share of 39.27% in 2024 and are expected to register the highest CAGR over the forecast period

• Blade servers, known for their density and efficiency, are expected to see continued growth and are ideal for environments where space and power are at a premium.
• Hyperscale data centers operated by cloud providers and large internet companies will continue to drive need for highly customized, energy-efficient servers.
• Moreover, with the rising trend of edge computing, there's a growing need for smaller, ruggedized servers that can be deployed closer to data sources, which in turn, is also boosting the data center equipment market trend.
• Surging demand for HPC servers, especially those with GPUs, is fueled by AI/ML workloads, scientific research, and complex simulations, is driving market size.
• For instance, in May 2024, Edgecore Networks launched the AGS8200, a high-performance AI server designed for demanding AI and machine learning workloads in data centers. This server is equipped with powerful GPUs to accelerate tasks like training large language models, automating processes, and improving object recognition.
• Thus, as per the analysis, the aforementioned factors are driving the servers as a data center equipment market size.

By Deployment:

Based on deployment, the market is segmented into, on-premises, cloud-based, and colocation.

Trends in Deployment:

• Organizations are optimizing their cloud usage to lower costs and enhance performance, which encompasses strategies such as workload consolidation and resource right-sizing.
• Cloud providers and large enterprises are constructing vast hyperscale data centers to support their operations and deliver cloud services.

On-Premises segment accounted for the largest revenue share in 2024

• To optimize space and lower costs, on-premises data centers are increasingly utilizing high-density servers equipped with powerful CPUs, substantial memory, and sophisticated cooling solutions.
• Data processing units are becoming more popular in on-premises setups as they alleviate network and infrastructure demands from CPUs, allowing more processing power for applications.
• As high-density servers and AI accelerators produce more heat, on-premises data centers are implementing advanced cooling technologies such as liquid cooling and immersion cooling to ensure optimal operating temperatures.
• Thus, the need for high performance infrastructure, reinforcing the necessity for better on-premises deployment, is also spurring the market growth.
• Therefore, the aforementioned benefits offered by on-premises deployment are bolstering the data center equipment market size.

Cloud-based are projected to witness the fastest growth during the upcoming years

• Cloud providers face pressure to minimize their environmental footprint, resulting in the use of energy-efficient servers, cooling systems, and power infrastructure.
• Organizations are progressively embracing multi-cloud strategies, utilizing services from various cloud providers, or hybrid cloud models, which merge public cloud with on-premises infrastructure.
• Cloud deployments are largely supported by automation and orchestration tools to manage and scale infrastructure, deploy applications, and maintain service availability, driving the cloud-based equipment market trend.
• For instance, in December 2023, Best Power Equipment India Private Ltd. partnered with W. Media South Asia & Middle East at the Saudi Cloud and Datacenter Convention 2023 in Riyadh Olaya. The collaboration provided BPE with a platform to showcase their products and solutions to a key audience of experts and potential clients, further solidifying their presence in the expanding data center landscape.
• In conclusion, the above-mentioned factors are predicted to drive cloud-based data center equipment industry.

By Industry:

Based on industry, the market is segmented into IT & telecom, BFSI, government and public sector, healthcare, manufacturing, retail, and others.

Trends in the Industry:

• BFSI institutions handle sensitive financial data, making security and compliance paramount. This translates to rising need for data center equipment with robust security features, such as advanced encryption, intrusion detection systems, and access control mechanisms.
• The adoption of EHR systems is generating vast amounts of healthcare data, requiring robust data center infrastructure for storage, processing, and analysis.

IT & telecom segment accounted for the largest share in the year 2024 and is expected to register the highest CAGR during the forecast period.

• The deployment of 5G networks and the growth of edge computing are significant factors influencing IT and Telecom companies. These companies must establish smaller, localized data centers near users to minimize latency and accommodate new applications.
• The continuous digital transformation across businesses and society is fueling the need for data-heavy applications and services, prompting IT and Telecom companies to invest in data center infrastructure.
• The rise of IoT devices generates vast amounts of data that require processing and storage, necessitating data centers with substantial capacity and efficient data management capabilities.
• For instance, in November 2023, Schneider Electric announced the collaboration with Compass Datacenters, to sign a deal of USD 3 billion equipment. This five-year contract is driven by the rising need for data centers, partly due to the artificial intelligence (AI) surge. The agreement involved the integration of their supply chains, which was announced in July 2023. In addition to this, Schneider will assemble prefabricated modular data center equipment at a 110,000-square-foot facility in Texas.
• Consequently, the IT & Telecom sector plays a crucial role in driving innovation within the data center sector. As these companies evolve their networks and services, their data center infrastructure must also adapt to accommodate the shifting need of the digital landscape.