Server Market Outlook 2031
The global server market size was valued at USD 89.24 Billion in 2022 and is likely to reach USD 197.04 Billion by 2031, expanding at a CAGR of 9.2% during, 2023 – 2031. The market's growth is attributed to rising adoption of 5G services and increasing number of data centers around the world.
Increasing number of data centers around the world is projected to boost the demand for servers. Servers are required in data centers for processing, disseminating, and storing data and applications. Servers enhance safety in data centers by separating data into different zones where access to the zone is required. For instance, there are approximately 8,000 data centers located worldwide.
A server is a computer program that provides a service to another computer program and its user. A server stores, sends, and receives data and is primarily available in four forms black, rack, tower, and micro. The server is widely used in IT & telecom, government & defense, banking, financial services, and insurance (BFSI), healthcare, energy, manufacturing, e-commerce, and other industries to protect business information by delivering a more reliable and security-enhanced infrastructure.
Rising adoption of 5G services is driving the market. 5G services offer wider bandwidth, faster speeds, and lower latency to servers that require quick internet to store, send, and receive data. Thus, growing adoption of 5G services is estimated to propel the market. For instance,
The COVID-19 pandemic propelled the demand for server operating systems. Rise in COVID-19 infection led governments to impose social distancing, lockdowns, and closure of schools, offices, and non-essential activities, which increased the demand for remote working and online education. The increase in demand for remote working and online education boosted the adoption of servers.
Server is required in remote working and online education to connect the users who are not on the local area network and allows the user to access and manage data, files, and applications available over the server.
Impact of Artificial Intelligence (AI) on Server Market
Continuous developments in technology and the introduction of artificial intelligence in servers creates lucrative opportunities in the market. AI-powered servers enhance security and automation by automating repetitive tasks such as monitoring servers, networks, and troubleshooting, freeing up the user to focus on critical tasks.
AI-enabled servers identify potential issues and take proactive measures to prevent system failures by using predictive analytics algorithms. AI in servers analyzes usage patterns and optimizes the allocation of storage and computing power. AI also provides insights about servers and recommends improvements, helping users make data-driven decisions.
Moreover, major players in the market are developing and introducing AI-powered servers, which creates an immense opportunity in the market. For instance,
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On August 22, 2023, NVIDIA Corporation a leading manufacturer of high-end graphics processing units (GPUs), introduced AI-ready servers to help companies customize and deploy generative AI applications using their proprietary business data.
Server Market Dynamics
Major Drivers
Increasing demand for e-commerce shopping is expected to boost the demand for servers. E-commerce websites require servers to ensure a smooth a improved shopping experience for customers and to store, process, and deliver requested information or web pages to end-users. Thus, growing demand for e-commerce shopping is propelling the market. For instance,
Rising adoption of streaming platforms is driving the market. Streaming platforms broadcast live or on-demand videos over the internet that require servers to provide access to video streaming to the user. Therefore, rising adoption of streaming platforms is projected to boost the market.
Existing Restraints
Risk of hacking associated with servers is anticipated to restrict the market. The design of some servers is not protected by firewalls, as they are available to everyone, all the time which encourages hackers to gain unauthorized access to the servers' sensitive data.
Moreover, high downtime of servers is hampering the market. High downtime occurs in servers due to power outages, hardware failures, network problems, and software issues.
Emerging Opportunities
Increasing investment in R&D activities by major market players to develop and introduce new servers for accelerated performance and reliability for powerful computing across core data centers creates an immense opportunity in the market.
For instance, On January 17, 2023, Dell Technologies, a US-based multinational technology company, launched Dell PowerEdge servers. The server is designed to accelerate reliability and performance for powerful computing across large-scale public clouds, core data centers, and edge locations.
Scope of Server Market Report
The report on the market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.
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Attributes
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Details
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Report Title
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Server Market- Global Industry Analysis, Growth, Share, Size, Trends, and Forecast
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Base Year
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2022
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Historic Data
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2016–2021
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Forecast Period
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2023–2031
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Segmentation
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Product (Black, Rack, Tower, Micro, and Open Compute Project), Industry Vertical (IT & Telecom, Government & Defense, Banking, Financial Services, and Insurance (BFSI), Healthcare, Energy, Manufacturing, E-commerce, and Others), and Channel (Systems Integrator, Direct, Reseller, and Others)
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Regional Scope
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Asia Pacific, North America, Latin America, Europe, and Middle East & Africa.
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Report Coverage
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Company Share, Market Analysis and Size, Competitive Landscape, Growth Factors, and Trends, and Revenue Forecast
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Key Players Covered in the Report
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ASUSTeK Computer Inc.; Cisco Systems, Inc.; Dell Inc.; Fujitsu; Hewlett Packard Enterprise Development LP; Huawei Technologies Co., Ltd.; IBM Corporation; Intel Corporation; INSPUR Co., Ltd.; Lenovo; Microsoft; NEC Corporation; Oracle; Quanta Computer lnc.; SMART Global Holdings, Inc.; SAP SE; and Super Micro Computer, Inc.
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Server Market Segment Insights
Product Segment Analysis
Based on products, the server market is categorized into black, rack, tower, micro, and open compute projects. The rack segment accounted for a major share of the market in 2022 due to high security and ease of regular computer maintenance. Rack servers offer enhanced security, as they have an inbuilt locker that ensures people who have legitimate reasons can open the rack and get to the hardware inside.
Moreover, rack servers are more cost-effective and easier to upgrade or replace than blade servers, which increases their adoption. Additionally, key companies in the market are developing and introducing rack servers to improve power usage of data centers, which is projected to drive the market. For instance,
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On November 11, 2022, ASUSTeK Computer Inc. a Taiwan-based multinational company that manufactures computers, phone hardware, and electronics, launched rack servers powered by AMD EPYC 9004 series processors. This rack server is designed to empower enhanced system airflow, minimizing power consumption and maximizing the efficiency of data centers.
The open compute project segment is projected to grow at a quick pace during the forecast period owing to low energy consumption and high flexibility and performance. The open compute project assists small- and medium-sized enterprises in improving data center designs to shorten build times, maximize efficiency, and reduce material use.
The open compute project reduces capital expenditure (CAPEX) and operational expenditure (OPEX) of data centers, while providing scalability, manageability, energy, simplicity, high density, and cooling efficiency, which increases their demand.
Industry Vertical Segment Analysis
In terms of industry vertical, the global market is segregated into IT & telecom, government & defense, banking, financial services, and insurance (BFSI), healthcare, energy, manufacturing, e-commerce, and others. The IT & telecom segment held a large share of the market in 2022 due to increasing technological advancement and growing digitalization.
Servers in IT & telecom offer unlimited user connections, more memory, and advanced network optimizations. Server uses LAN and other connections where multiple users connect and share information at the same time, which encourages IT & telecom companies to adopt servers.
Moreover, servers provide network configuration and high-level software that can handle complex tasks with ease, which increases their demand in the IT and telecom industry.
The banking, financial services, and insurance (BFSI) segment is anticipated to grow at a robust pace in the coming years owing to rising industrialization and increasing consumer demand. Servers are widely used in banking to offer secure access to account holders to their funds.
Servers help banks and insurance agencies manage their most critical processes, such as risk management, transactions, and customer accounts. Moreover, banks are adopting servers to digitize their routine operations and ensure that their services are accessible remotely. This enhances the demand for servers in the BFSI industry.
Channel Segment Analysis
Based on channel, the server market is divided into systems integrator, direct, reseller, and others. The reseller segment dominated the market in 2022 due to access to a web hosting infrastructure and free technical support. Reseller server hosting lets companies and data centers buy hosting resources from a hosting provider and resell them to their customers.
Moreover, resellers provide free technical support on servers such as troubleshooting issues related to the hosting environment, website downtime, server errors, and email problems, which is projected to enhance their demand.
The direct segment is expected to grow at a considerable pace during the assessment year owing to hassle-free maintenance and improved security. Direct servers provide users with outright control over access protocols that let them decide who can access their machine through the network interface, ensuring greater security.
Moreover, the direct servers are cheaper as the manufacturers sell servers directly to customers, which reduces intermediary and promotional costs and encourages users to purchase servers from direct channels.
Regional Outlook
In terms of region, the server market is categorized into Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America held a large share of the market in 2022 due to high usage of cloud services and the presence of key market players such as Dell Inc., Cisco Systems, Inc., IBM Corporation, Oracle, Microsoft, and others.
Moreover, increasing number of data centers in the region is propelling the need for servers as servers are utilized in data centers for processing, disseminating, and storing data and applications. For instance, there were 5,375 data centers located in the US by September 2023.
The market in Asia Pacific is anticipated to expand at a high CAGR during the forecast period owing to the increasing need for cloud computing solutions and growing IT industry. IT professionals use servers to manage and control the programs and applications of computers and data centers. Moreover, companies in the region are manufacturing high-runner servers to fulfill the customer's demand for cloud computing. For instance,
- On July 4, 2023, Hewlett Packard Enterprise Development LP, a global provider of intelligent solutions and cloud-based services, announced plans to manufacture high-runner servers in India worth USD 1 billion. The high-runner servers are designed to support the growing demand for servers and cloud computing in India.
Segments
The server market has been segmented on the basis of
Product
- Black
- Rack
- Tower
- Micro
- Open Compute Project
Industry Vertical
- IT & Telecom
- Government & Defense
- Banking, Financial Services, and Insurance (BFSI)
- Healthcare
- Energy
- Manufacturing
- E-commerce
- Others
Channel
- Systems Integrator
- Direct
- Reseller
- Others
Region
- Asia Pacific
- North America
- Latin America
- Europe
- Middle East & Africa
Key Players
- ASUSTeK Computer Inc.
- Cisco Systems, Inc.
- Dell Inc.
- Fujitsu
- Hewlett Packard Enterprise Development LP
- Huawei Technologies Co., Ltd.
- IBM Corporation
- Intel Corporation
- INSPUR Co., Ltd.
- Lenovo
- Microsoft
- NEC Corporation
- Oracle
- Quanta Computer lnc.
- SMART Global Holdings, Inc.
- SAP SE
- Super Micro Computer, Inc
Competitive Landscape
Key players competing in the global market are ASUSTeK Computer Inc.; Cisco Systems, Inc.; Dell Inc.; Fujitsu; Hewlett Packard Enterprise Development LP; Huawei Technologies Co., Ltd.; IBM Corporation; Intel Corporation; INSPUR Co., Ltd.; Lenovo; Microsoft; NEC Corporation; Oracle; Quanta Computer lnc.; SMART Global Holdings, Inc.; SAP SE; and Super Micro Computer, Inc.
These companies adopted development strategies including collaboration, product launches, mergers, acquisitions, partnerships, and production expansion to expand their consumer base worldwide. For instance,
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On February 22, 2023, Dell Inc. a US-based, multinational technology company that develops, sells, repairs, and supports computers and related products and services introduced a new line of PowerEdge servers powered by 4th Generation Xeon Scalable processors for private 5G networks. The new PowerEdge server models are available in XR8000, XR7620, and XR5610 designed with modularity and scalability in mind.
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On November 16, 2022, Microsoft, a US-based multinational tech company specialized in computer software, launched SQL server. SQL Server is a core element of the Microsoft intelligent data platform that seamlessly integrates operational databases, analytics, and data governance.
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