Server Market: Large Enterprises Accounted For The Largest Revenue Share
Server Industry Overview
The global server market size was valued at USD 83.66 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 7.8% from 2021 to 2028. A server is a physical and virtual centralized database used to store and share information across multiple computers connected across a network. The growing number of new data centers globally is one of the key factors expected to fuel market growth. Several cloud service providers and industries, such as IT and telecom, healthcare, BFSI, and government and defense, are engaged in upgrading their servers to manage the continuously rising volume of data. The upgradation of the IT infrastructure provides enhanced security, storage, and processing speeds for managing higher data volumes.
The COVID-19 pandemic has caused a minor dent in the sales of servers, thereby affecting the market growth. However, amid the lockdowns announced by several governments globally, numerous organizations have adopted the work-from-home model for their employees, as part of the efforts to arrest the spread of the disease. The usage of OTT platforms and e-commerce websites also increased during the lockdown as people resorted to these channels for entertainment and shopping purposes. The proliferation of non-contact methods of transactions has resulted in a rise in the usage of payment wallets, creating avenues for industry growth. As the situation normalizes, these trends are expected to stay and grow further post the pandemic, fueling the demand for servers.
Gather more insights about the market drivers, restrains and growth of the Global Server market
The Asia Pacific market witnessed significant growth in the fiscal year 2019 due to an upsurge in the sales of rack servers, primarily driven by the continued demand from hyperscalers. Rack servers are used in several applications because of their compact size and the possibility of easy replacement during a breakdown. In 2019, several companies such as Huawei Technologies Co. Ltd., Dell, and Hewlett Packard Enterprise Development LP witnessed a rise in sales due to the increased demand for high capacity servers. For instance, Dell’s Infrastructure Solutions Group recorded revenue growth of 28%, linked chiefly to the sales of its PowerEdge servers. The company claimed that the increased prices of high-end servers with higher memory and robust computing capacity were responsible for revenue growth.
Besides, the demand for high-performance computing servers has increased across applications supporting big data analytics, software-defined solutions, and hyperconverged infrastructure. Furthermore, the continued rollout of 5G networks technology and aggressive investments in the construction of hyperscale data centers by public cloud providers also favored the growth of the market in Asia Pacific in 2019.
Newer applications that demand specific configurations and high computing requirements from users and service providers are increasing the adoption of cloud servers for efficient functioning. Enterprises are adopting virtual or cloud servers to enhance their global networking capabilities and cut down on their IT infrastructure’s operational and maintenance costs. Additionally, cloud service providers have to invest significantly in the maintenance of cooling equipment as physical servers dissipate more heat. Due to this, provisions such as renting servers and virtualization have been gaining traction in recent years.
However, the increased demand for servers with customized configurations for several applications and the many challenges associated with selecting the suitable server are some factors expected to disrupt market growth in the near future. Furthermore, high installation and maintenance costs may pose a challenge to market growth over the forecast period. Nevertheless, the Bring Your Own Device Policy (BYOD) and the increasing need for centralized access systems are expected to help keep the demand up for servers over the forecast period.
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Server Market Segmentation
Grand View Research has segmented the global server market on the basis of product, enterprise size, channel, vertical, and region:
Server Product Outlook (Volume, Thousand Units; Revenue, USD Billion, 2016 - 2028)
- Blade
- Rack
- Tower
- Micro
- Open Compute Project (OCP)
Server Enterprise Size Outlook (Volume, Thousand Units; Revenue, USD Billion, 2016 - 2028)
- Micro
- Small
- Medium
- Large
Server Channel Outlook (Volume, Thousand Units; Revenue, USD Billion, 2016 - 2028)
- Reseller
- Direct
- Systems Integrator
- Others
Server Vertical Outlook (Revenue, USD Billion, 2016 - 2028)
- IT & Telecom
- BFSI
- Government & Defense
- Healthcare
- Energy
- Others
Server Regional Outlook (Volume, Thousand Units; Revenue, USD Billion, 2016 - 2028)
- North America
- Europe
- Asia Pacific
- Latin America
- Middle East & Africa (MEA)
Key Companies profiled:
Some prominent players in the global Server market include
- IBM
- Hewlett Packard Enterprise Development LP
- Dell
- Lenovo
- Fujitsu
- Inspur Technologies Co. Ltd.
- Huawei Technologies Co. Ltd.
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