#United States #Redwood City #Data Center #Dell'Oro Group #AI Growth

Data Center Physical Infrastructure Market Report

In a recently released analysis by the Dell'Oro Group, the Data Center Physical Infrastructure (DCPI) market experienced outstanding double-digit revenue growth during the third quarter of 2024. This surge is primarily attributed to the increasing deployment of specialized infrastructure designed to accommodate advanced computing workloads associated with artificial intelligence (AI).

Overview of Growth

According to Lucas Beran, Research Director at Dell'Oro Group, the growth cycle for the DCPI sector gained momentum in Q3 2024. While revenue growth remained consistent with the previous quarter, there was a noticeable shift towards products designed to facilitate high-density, accelerated computing workloads. This transformation was particularly evident in sectors like liquid cooling and high-capacity power distribution infrastructure, which are expected to gain further traction in 2025.

The ongoing demand for these advanced infrastructures has led to vendor backlogs soaring, driven by orders that consistently exceeded forecasted expectations. The sustained demand indicates a robust market outlook, suggesting that revenue growth will not only continue but potentially accelerate in the upcoming year.

Market Dynamics

The quarterly report unveiled several key trends and dynamics within the DCPI market. Here's a closer look at the highlights:

• - Vendor Performance: Modine and Eaton made significant strides in market share, whereas competitors like Huawei and Vertiv faced share losses.
• - Regional Growth: The revenue growth spanned all global regions, with North America showing the strongest growth. Noteworthy increases were also recorded in EMEA (Europe, Middle East, and Africa), China, and the Asia Pacific region, as deployments geared toward accelerated computing gained momentum globally.
• - Market Segment Insights: All market segments realized revenue growth; however, the focus heavily leaned toward accelerated computing solutions. Notably, facility power distribution remained the standout performer within power distribution, continuing a four-quarter streak of consistent revenue increases, propelled especially by high-capacity busway growth.
• - Thermal Management Trends: In the thermal management space, revenues for traditional air-based systems saw stagnation. In contrast, liquid cooling solutions witnessed an impressive doubling of year-over-year revenue, highlighting a clear trend towards more efficient cooling systems in data centers.

Future Projections

As anticipated, the DCPI market is forecasted to continue its upward trajectory through 2024, with double-digit growth expected. Projections suggest an acceleration in revenue growth, potentially reaching high teens in 2025. This growth is primarily attributed to the increasing construction of purpose-built data centers that cater to cloud services and colocation providers, establishing robust infrastructures designed for AI and accelerated computing workloads.

Conclusion

The insights presented in the Dell'Oro Group's DCPI quarterly report underscore a vital shift occurring in the data center industry, propelled by the burgeoning need for advanced computational capabilities driven by AI and related technologies. As the market adapts to these evolving demands, stakeholders can anticipate a continuously strengthening landscape, indicative of both current and future opportunities within this dynamic sector.