Japan Data Center Server - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts 2019 - 2030

The Japan data center server market reached a value of USD 4.0 billion in the previous year, and it is further projected to register a CAGR of 7.3% during the forecast period. The increasing demand for cloud computing among small and medium-sized enterprises (SMEs), government regulations for local data security, and growing investment by domestic players are some of the major factors driving the demand for data centers in the country.

Under Construction IT Load Capacity: The upcoming IT load capacity of the Japan data center rack market is expected to reach 2100 MW by 2029.

Under Construction Raised Floor Space: The country's construction of raised floor area is expected to increase to 10 million sq. ft by 2029.

Planned Racks: The country's total number of racks to be installed is expected to reach 512,000 units by 2029. Johannesburg is expected to house the maximum number of racks by 2029.

Planned Submarine Cables: There are close to 26 submarine cable systems connecting Japan, and currently 6 submarine cable are under construction.

Japan Data Center Server Market Trends

Blade Servers to Grow At A Faster Pace In The Coming Years

• Reduced power consumption and high processing power contribute to the blade servers in data centers.
• Single or multiple server blades can be inserted or removed without distressing another running system. It reduces hardware costs, which is likely to entice industry players to adopt the technology, thereby fueling market growth. Additionally, each server blade does not consist of a distinct infrastructure and chassis, owing to which the product is relatively cheaper as compared to other solutions.
• To cater to end-user needs, the top companies are focusing on blade servers in data centers.
• The growing adoption of technologies such as cloud computing, AI, and IT services by businesses, Internet penetration, and an increase in social media are propelling the use of servers in data centers.
• In the coming future, the evolution of healthcare focuses on the reengineering of clinical care around digital health, real-time use of data and analytics. Such achievements require a large amount of data to be stored, which would drive the need for data center blade servers over the forecast period.

IT & Telecommunication Segment To Hold Major Share In The Market

• The demand for data center servers in the IT and telecom industry is rising with increasing network traffic. Telecom data centers are responsible for managing network resources, such as vRAN and 5G packet core, while IT data centers are responsible for the IT applications used by the telecom service.
• The Japanese government assigned the three mobile operators in Japan - NTT Docomo, KDDI au, and Softbank, as well as the new arrival Rakuten Mobile, with 5G spectrum in April 2019. In the coming years, the four Japanese carriers are expected to spend more than USD 14 billion in capital expenditures, including investments in base stations, servers, and fiber optics, to build their 5G networks.
• Japan has a highly developed infrastructure that allows its people to be constantly connected. Internet users in Japan increased by 844 thousand (+0.7%) between 2021 and 2022. Compared to pre-COVID-19 levels in 2019, Internet traffic climbed 1.6 times in 2020 as the pandemic led to an increase in at-home videoconferencing, distance learning, and video streaming.
• Japan is establishing its own domestic network and technology foundation. The Japanese government plans to invest billions of dollars in promoting the development of ultra-high-speed communication. Japanese equipment manufacturers NEC and Fujitsu, as well as Finnish equipment manufacturer Nokia, announced plans to conduct experimental trials of new mobile communications technologies for the targeted commercial launch of 6G services by 2030.
• The COVID-19 outbreak significantly impacted the Japanese economy. The adoption of digital technology was essential for the nation to become more resilient during and after the pandemic. Technology applications can help businesses and their employees manage the financial effects of COVID-19 by assisting them in contacting clients and conducting business digitally, restarting business operations, and implementing technologies that reduce logistical bottlenecks.

Japan Data Center Server Industry Overview

The Japan data center server market is relatively low in terms of competition. It has some players in the market, such as Dell Inc., Hewlett Packard Enterprise, Cisco Systems Inc., Kingston Technology Company Inc., and Quanta Computer Inc. These major players focus on expanding their customer base in the country. These companies leverage strategic collaborative initiatives to increase their market share and profitability.

In May 2023, Cisco introduced UCS X servers that cut data center energy use in half. The combination of the Cisco Intersight infrastructure management platform and Unified Computing System (UCS) X-Series servers reduces data center energy consumption by up to 52% at a 4:1 server consolidation rate.

In August 2023, Hewlett Packard Enterprise announced that phoenixNAP is expanding its Bare Metal Cloud platform with cloud-native HPE ProLiant RL300 Gen11 servers, using energy-efficient processors from Ampere Computing. The expanded services support AI inferencing, cloud gaming, and other cloud-native workloads with improved performance and energy efficiency.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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