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The global data center rack market size was valued at USD 5.31 billion in 2022 and is projected to grow from USD 5.71 billion in 2023 to USD 11.06 billion by 2030, exhibiting a CAGR of 9.9% during 2023-2030. North America dominated the global market with a share of 38.41% in 2022.
In the scope of work, we have included solutions offered by companies such as Schneider Electric, Vertiv Group Corp., Eaton, Fujitsu, Legrand S.A., Dell Inc., Cisco Systems, Inc., and others. A data center rack is a standardized frame designed to house and organize computing equipment, servers, networking devices, and other hardware components within a data center or server room. These racks are typically constructed with a metal frame and have front and rear vertical posts with mounting holes. They come in various sizes and configurations, such as 19-inch racks, 23-inch racks, and more, depending on the industry standards. These racks provide secure and organized spaces for servers, switches, routers, storage devices, and other IT equipment.
Further, they often have in-built features or can be equipped with cooling systems such as fans or air conditioning to maintain the appropriate temperature for the enclosed equipment. Data center rack solutions are used in a wide range of fields and industries, including BFSI, retail, IT & telecom, government, healthcare, and others.
Increased Demand for Remote Work Infrastructure Fueled the Market Growth
The sudden shift to remote work during the pandemic led to a surge in demand for data center resources. Many organizations needed to expand or upgrade their data center infrastructure, including racks, to accommodate the increased load of remote workers accessing corporate systems. Similar to various industries, the data center equipment supply chain was disrupted due to global lockdowns and disruptions in manufacturing and shipping. This led to delays in the production and delivery of data center racks and other hardware components. However, in this adverse situation, data center operators turned to remote monitoring and management solutions to oversee their facilities. This increased the importance of technologies that enable remote visibility and control over data center equipment. These factors fueled the data center rack market growth during the pandemic.
Rise in Adoption of High-density and Modular Rack Designs to Propel the Market Growth
Data centers increasingly adopted high-density racks to accommodate more computing power in smaller footprints. This trend was driven by the need for energy efficiency and reduced space requirements in hyperscale data centers. Further, in high-density racks, liquid cooling solutions are majorly used to manage the heat generated by servers. These solutions use coolant to efficiently dissipate heat from servers and other hardware. Moreover, the racks used in data centers are becoming more modular, allowing for easy scalability. This approach made it simpler to add or remove equipment as needed, aligning with changing business requirements. In addition, these racks are enabled with efficient cable management solutions for reducing clutter and improving airflow. Innovations in cable management within racks helped optimize data center performance.
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Increasing Number of Data Center Facilities across the Globe to Boost the Market Growth
The rise in the number of data center facilities across the globe plays an important role in efficiently managing the vast amount of data generated from digital services, Internet of Things (IoT) devices, social media, and online transactions. As a result, businesses and organizations require more data center capacities to store and process this data. In addition, cloud service providers, such as AWS, Azure, and Google Cloud, have been expanding their data center footprints to meet the growing demand for cloud services. This expansion includes new data center facilities in various regions globally. Also, businesses are increasingly investing in data center facilities to ensure business continuity and disaster recovery capabilities. These facilities are spreading across different regions to mitigate the risk of downtime due to natural disasters or other disruptions. These factors are expected to drive the market growth during the forecast period.
High Maintenance Costs and Space Limitations to Hamper the Market Growth
Building and maintaining data center facilities, including racks, is expensive. This includes costs related to construction, cooling systems, electricity, and ongoing maintenance. Cost considerations can impact the decision to expand or upgrade rack infrastructure. Further, high-density racks generate more heat, which requires robust cooling solutions. Balancing power and cooling needs can be challenging, especially in older data center facilities that may not be designed for modern equipment, which could restrain the market growth. In addition, in some of the data centers, space availability can be limited, and this constraint can affect the number and size of data center racks that can be deployed. In these situations, organizations may need to expand their facilities or use high-density rack solutions to maximize space, which puts an additional cost on businesses. These factors could hinder the adoption and effective use of these racks.
Increasing Popularity of Enclosed Racks to Provide Enhanced Physical Security to Augment the Market Growth
Based on the rack type, the market is bifurcated into cabinets/enclosed racks and open frame racks.
Cabinets/enclosed racks captured the maximum share of the market in 2022 as they provide physical security by enclosing the equipment within a locked enclosure. This helps prevent unauthorized access and tampering, enhancing data security. Moreover, enclosed racks are better at controlling environmental factors, such as temperature and humidity. They can be equipped with cooling systems, airflow management, and environmental monitoring to create an optimal operating environment for sensitive equipment. Owing to these features, it is likely to continue its dominance during the forecast period.
The open frame rack is anticipated to grow at a significant CAGR in coming years, as they are more cost-effective than enclosed cabinets. They are a budget-friendly option, making them suitable for smaller installations or organizations with limited resources. Also, open frame racks provide easy access to equipment from all sides and offer excellent airflow, as there are no enclosed sides or doors to restrict it.
Growing Demand for Large Data Centers among Businesses Propel the Data Center Rack Market Growth
Based on the data center size, the market is classified as small and mid-sized data centers and large data centers.
Large data centers held a larger share of the market in 2022, as they can achieve cost efficiencies by spreading the fixed costs of infrastructure, cooling, and power across a vast number of servers and storage devices. Also, they have the capacity to store and process vast amounts of data, making them ideal for organizations with big data analytics, machine learning, and data-intensive workloads.
Small and mid-sized data centers are expected to grow at a significant CAGR during the forecast period, as they are more flexible and scalable, making it easier to adapt to changing business needs. Also, they are easy to manage and maintain. There is less complexity in terms of infrastructure, networking, and equipment, leading to simplified operations.
Surge in Demand for 41U up to 50U Rack Height for Providing High Security to Data Center Equipment
Based on the rack height, the market is divided into 40U and below, 41U up to 50U, and above 51U.
41U up to 50U captured a larger share of the market in 2022, as many 43U racks come with locking mechanisms and other security features to protect the housed equipment from unauthorized access, adding an extra layer of physical security. Further, organizations can achieve higher equipment density and consolidation within a 43U rack, reducing the need for additional rack units and optimizing space usage.
40U and below racks are expected to grow at a CAGR of 11.9% during the forecast period, as they are space-efficient and suitable for environments with limited available floor space, such as small server rooms or office closets. Aldo, smaller racks are generally more cost-efficient than larger ones, and they require less physical space, which can lead to lower construction and operational costs.
Increasing Dependence on E-commerce Operations Propels the Adoption of Data Center Racks in Retail
By industry, the market is categorized into BFSI, retail, IT & telecom, government, healthcare, and others (education, media & entertainment).
The retail sector held the maximum data center rack market share in 2022, as retailers with online stores and e-commerce platforms rely on data center racks to host and manage their websites, databases, and online shopping applications. These racks store product data, inventory information, and customer databases. In addition, data center infrastructure helps retailers track and manage inventory levels efficiently. Thus, increasing demand for these racks in retail is accelerating market growth.
The healthcare sector is anticipated to grow at the highest CAGR in coming years, as increasing focus on the adoption of digital technologies in healthcare generates massive amounts of data from electronic health records (EHRs) to medical imaging. These racks provide a secure and organized environment for storing and protecting this sensitive information. The rapid adoption of digital technologies in the healthcare industry is predicted to boost market expansion over the forecast period.
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By region, the market has been analyzed across five major regions, namely Asia Pacific, North America, Europe, the Middle East & Africa, and South America.
North America is expected to account for a major data center rack market share. The adoption of these racks in North America has been widespread and continues to grow. Many organizations in the U.S. are undergoing digital transformation efforts to modernize their operations. This often involves the consolidation of data centers and their infrastructure, including racks and other hardware components, to optimize space and improve efficiency. Moreover, the presence of technological advancements across all industries in the region fuels the market growth.
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The market in Asia Pacific is projected to grow at the highest CAGR over the forecast timeframe. Asia Pacific is home to some of the world’s largest e-commerce markets, such as China and India. Online retailers and platforms rely heavily on data center racks to ensure the availability and performance of their websites and applications. Further, the rollout of 5G networks and the expansion of telecommunications services across the region require robust data center infrastructure. These racks play a crucial role in supporting the networking and computing equipment needed for these advancements. Thus, a significant focus on adopting an advanced data center infrastructure is anticipated to propel the market growth in the Asia Pacific region.
The European market is expected to grow at a moderate CAGR over the projected period. In Europe, as cloud computing services become more prevalent, data center infrastructure is used to house the hardware components that underpin cloud data centers, enabling scalable and reliable cloud services. Moreover, multiple European countries’ governments are investing in data center infrastructure to support public services, digital government initiatives, and data analytics. The racks used in data center stores and processes government data securely in the region.
The Middle East & Africa and South America markets are projected to exhibit significant growth in the forthcoming years. Data privacy and security are paramount in MEA, and data center racks are used to ensure compliance with regional and international data protection regulations. Further, Africa is experiencing noteworthy growth in data center infrastructure, with data center hubs emerging in countries, such as South Africa, Nigeria, and Kenya. Moreover, in South America, the Brazilian market size is growing at a rapid pace, owing to the adoption of Industry 4.0 technologies in the Brazilian manufacturing industry, which requires the racks to support automation, IoT devices, and data analytics in production environments. These factors are crucial for the significant market growth in the region.
Market Players are Focusing on Merger and Acquisition Strategies to Expand their Operations Globally
Top players are focusing on expanding their geographical boundaries across the globe by introducing industry-specific solutions. These players are strategically collaborating and acquiring local players to gain a strong regional grip. Moreover, key market players are introducing new products to attract and retain their customer base. Also, continuous research and product development investments are thriving in the global data center rack industry growth. Thus, by adopting such corporate strategies, players sustain their competitiveness in the market.
An Infographic Representation of Data Center Rack Market
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The report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product/service types, and leading applications of the product. Besides, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that contributed to the growth of the market in recent years.
ATTRIBUTE | DETAILS |
Study Period | 2019-2030 |
Base Year | 2022 |
Estimated Year | 2023 |
Forecast Period | 2023-2030 |
Historical Period | 2019-2021 |
Growth Rate | CAGR of 9.9% from 2023 to 2030 |
Unit | Value (USD billion) |
Segmentation | By Rack Type, Data Center Size, Rack Height, Industry, and Region |
Segmentation |
By Rack Type
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By Data Center Size
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By Rack Height
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By Industry
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By Region
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The market is projected to reach USD 11.06 billion by 2030.
In 2022, the market stood at USD 5.31 billion.
The market is projected to grow at a CAGR of 9.9% during the forecast period.
By rack type, cabinets/enclosed rack is expected to lead the market.
Increasing number of data center facilities across the globe is expected to drive the market growth.
Schneider Electric, Vertiv Group Corp., Eaton, Fujitsu, Legrand S.A., Dell Inc., and Cisco Systems, Inc. are the top players in the market.
North America region is expected to hold the highest market share.
By industry, healthcare sector is expected to grow with the highest CAGR.