US Rack Server and PERC Market

The U.S Rack Server and PERC Market is estimated to surpass $44.4 billion mark by 2027 growing at an estimated CAGR of more than 9.4% during the forecast period 2022 to 2027. Growing data center footprint and demand from cloud service providers are driving the growth of the rack server market. Companies are addressing the performance demands of modern workloads such as data analytics, Machine check architecture, cache memory Artificial Intelligence and are refining their designs accordingly. The expansion of mobile broadband, the rise of big data analytics and cloud computing are driving the demand for new data center infrastructures. As of 2022, according to CNNIC, the US owns almost 45 per cent of the global cloud and internet data centers. North America alone (US and Canada) has about 3254 data centers as of 2022, making it a major market for server microprocessors. With the gradual shift of deploying cloud models for data storage in banks is certainly contributing to the increasing adoption of data centers. This is set to contribute to the market growth rate as the connected solutions require the data centers. BFSI includes the management of banking services, including, core banking, mutual funds, insurance and others which handles the physical servers and the virtual ones as well which is majorly contributing to the market growth rate. IT and Telecom is analysed to grow at significant rate majorly attributed to the 5G deployment. The rising capability of host bus adapter, solid state drives, drive bays and disk array controllers is enhancing the performance of these data center solutions which is driving adoption of rack servers and PERCs in the market.

Key Takeaways

• BFSI sector is analysed to hold highest market share in 2022 owing to the high deployment and management of the servers.
• The increasing infrastructure development in the communication sector such as 5G is analysed to be the key driving factor for the market.
• With significant growth of colocation providers and their expansion in remote areas, it is anticipated that there will be substantial growth in demand for optimized data centre racks over the forecast period 2022-2027.
• Growth in the market of high-density rack is primarily due to reduced infrastructure capital expenses as the data centre can now be housed in a reduced room, minimizing the overhead fixed costs.

U.S Rack Server and PERC Market Segment Analysis - By Rack Type

By rack type, the market is segmented into open frame and cabinet. Open frame racks are easy to install and flexible to use and hold highest share in 2022 at 69.4%. The open frame racks cost about 1/3rd of the cabinet ones and has proper ventilation. In 2022, Cyber power has launched a series of racks ideal for data center and back office solutions owing to the rising demand. The product series include rack enclosure series, open frame rack series, wall mount enclosure series. Also Open compute Project organization has launched a rack and power project for the racks deployed in data centers to standardise the data center infrastructure. These factors are set to boost the market growth rate. In addition to it, 10Gb Ethernet deployments, as well as being directly related to developments in SAN and NAS disk devices, network management applications and virtualization technologies are also benefited. The capacity of Rack servers to dramatically increase the quantity and reliability of storage, memory and I / O services in a limited physical environment is a blessing for data centre administrators who have to satisfy ever-increasing customer demand for server flexibility and have generated a modern range of technical solutions for cloud resource management as well as for cloud and mobile virtualization applications.

U.S Rack Server and PERC Market Segment Analysis - By Application

BFSI is analysed to be the hold highest market share in 2022 at 19.5% share, followed by the IT & Telecom. With the gradual shift of deploying cloud models for data storage in banks is certainly contributing to the increasing adoption of data centers. This is set to contribute to the market growth rate as the connected solutions require the data centers. BFSI includes the management of banking services, including, core banking, mutual funds, insurance and others which handles the physical servers and the virtual ones as well which is majorly contributing to the market growth rate. IT and Telecom is analysed to grow at significant rate majorly attributed to the 5G deployment. The market growth is due to a high demand for modernized IT infrastructure. Moreover, Rack servers provide a systematic framework to install several processors, memory, and I / O services by positioning certain resources on plug-in boards that slide into a typical frame. Through sharing common resources such as power, storage and I / O through multiple processors they reduce costs over independent server systems. The need for Rack servers has soared on the server market.

U.S Rack Server and PERC Market Drivers

Availability and adoption of durable racks

The significant rise in the adoption of the durable racks in many firms is set create ample amount of growth opportunities for the data center racks thereby contributing to the growth of the market. As the trend of automation and digitalization is significantly rising, the launch of updated rack systems for the requirements is set to escalate the market growth rate. In March 2022, Rittal has launched new AX compact and KX small enclosures that are embedded within digital processes, making for simpler, faster assembly & component installation, enhanced safety and so on.

Growing deployment of data centres

Technological advancements and growing digitalization in all verticals such as banking and financial services, information technology, telecommunication, retail, government, education and others makes deployment of data centres across the globe thereby impelling the consumption of data centre racks. The increasing demand for technology services and increasing investments from major companies are also influencing the growth of the market. Hewlett Packard Enterprise (HPE) partnered with National Renewable Energy Laboratory (NREL) in November 2022 to further simplify and increase the operating performance of data centres through incorporating Artificial Intelligence (AI) and Machine Learning (ML). This partnership is a way of reducing energy consumption and raising the running costs. Over the last decade, Internet penetration has grown dramatically globally, leading to a rise in the number of data centers where server microprocessors are used. The growth in user-based online services such as Facebook, YouTube, Twitter and cloud computing has increased the demand for data centers. These centers store personal data in a centralized system that uses large-scale servers that contribute to market growth. As of January 2022, around 2,751 data centers were in the United States, up 8.5% from 2017.

U.S Rack Server and PERC Market Challenges

Emergence of Hyper Converged Infrastructure (HCI)

The traditional data centers require equipment such as racks, network equipment and so on which incur high costs. The Hyper Converged Infrastructure (HCI) provides the support to critical applications as they combine storage, server and so on. This saves the cost and fuss of managing a data center. As the complexities with the data centers are significantly high, the adoption of the HCI is significantly rising which is set to hinder the market growth rate. Power drawn by high-density racks is more thus more cooling is required. Traditional air-cooling solutions are less workable at certain stage. Different types of liquid cooling and cold aisle containment systems have been adopted by several data centres to tackle the heat issues high density servers pose. In fact, of organizations that have adopted HCI, nearly 35% in 2022, it is expected to be the most common infrastructure deployed in the data center by 2024

U.S Rack Server and PERC Market Landscape

Product launches, acquisitions, and R&D activities are key strategies adopted by players in the BLE Market. The top 10 U.S Rack Server companies include:

• Dell
• Hewlett Packard
• Schneider Electric
• Cisco
• Huawei
• TrippLite
• Belden
• Inspur Systems
• Quantum Computers
• Rittal

Recent Developments

• In December 2022, Dell Technologies launched 5 new Dell EMC PowerEdge rack and tower servers. The new servers can support business-critical and advanced workloads to help organizations innovate, adapt, and grow. Designed with office-friendly acoustics and thermals, these servers are ideal for use inside datacenters, and edge environments.
• In June 2022, Cisco redefined its Cisco UCS Rack Server Software to enhance rack server solutions.
• In January 2022, Dell launched the new Dell EMC PowerEdge R550 is a 2U, dual-socket server.

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