Towering Data Center Racks Boost Market Growth

As the Greek philosopher Heraclitus rightly said, nothing endures but change. This holds good in the world of data center racks. In today’s age of information, the demand for data storage is growing, leading to an increase in the demand for data center services, thereby increasing the requirement for data center racks and storage devices. Data center racks have evolved over time and are no longer used merely to stack IT equipment and accessories. These days, the racks and enclosures are engineered with precise dimensions and specifications to accommodate multiple IT equipment and servers.

In recent times, there has been a change in rack dimensions, resulting in a shift in the demand for them. A decade ago, the standard data center rack size was 36 unit (36U); however, as time passed, the race to utilize available data center space to its optimal level reached its peak. This resulted in increasing demand for taller racks causing it to gain momentum in the market. Currently, there is a high demand for 42U racks, and it accounts for almost two-thirds of the data center rack market.

One of the main challenges in the Data Center market is that though it is growing, its vendors’ profit margins are shrinking. This exerts a pressure on data center service providers to utilize their available space rather than build new centers, which entails a high initial capital expenditure. An economical method of utilizing data center space is to accommodate as many servers as possible in the available area. This increases the demand for taller data center racks; as is evident from the shift in demand from 42U-sized server racks to 48U and 51U-sized ones. 48U and 51U-sized racks are currently being used by 10 percent of the end-customers in the market; it is expected that the demand for these racks will increase significantly over the next five years.

Currently, the Global Data Center Rack market is growing and is expected to maintain a CAGR of 11 percent for the next five or six years.

Over the past few years, several global IT heavyweights, such as HP, Dell, IBM, and Oracle, have noticed and capitalized on the potential offered by this Global Data Center Rack market. Despite not having manufactured these racks themselves, they have bundled and integrated their solutions with data center racks, manufactured by third-party vendors, to provide their consumers with rack system solutions.

Eaton, the multi-billion dollar company, is currently increasing its focus on the Data Center Rack market. During the past few years, Eaton has experienced a moderate growth rate in this market and is expected to maintain this growth rate over the next few years. Companies such as Emerson Network, APC, and Rittal, need to use multiple strategies if they need to maintain or grow their market share in this market.

Despite global vendors having established their presence in the Global Data Center Rack market, they are facing increasing competition from local or regional vendors, which currently account for approximately 12 percent of the market. This share is expected to increase to 16 percent by 2016. Global vendors, however, can acquire local or regional vendors and increase their market share and reduce this competition. Hence, the market is expected to gain momentum and witness several changes over the next few years.

Our reports on the Data Center Rack market include the following

Our reports covering various Data Center components and services include the following