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Data Center Physical Infrastructure Market Overview

In the third quarter of 2025, the global Data Center Physical Infrastructure (DCPI) market showcased impressive growth, reporting an 18% increase in manufacturer revenue year-over-year, as indicated in the latest report by the Dell'Oro Group. This rise is attributed to the burgeoning demand for AI infrastructure and a transition from long-term planning to actionable projects.

Key Drivers of Growth

The continuous expansion of data centers underlines their pivotal role in digital innovation and capacity growth. As technology evolves, operators are not only increasing their infrastructure at a rapid pace but are also innovating around power and cooling requirements necessary for next-generation AI applications. Alex Cordovil, the Research Director at Dell'Oro Group, stated, “Operators are scaling capacity at unprecedented speed, and both power and cooling architectures are evolving to keep pace with AI-era requirements.”

The increasing need for efficient thermal management is underscored by a staggering 85% year-over-year growth in Direct Liquid Cooling solutions. This sector is on track to surpass $2 billion in yearly revenue, with significant adoption across expansive AI clusters. The hyperscaler segment emerged as the primary demand driver, witnessing over 30% growth globally, with North America leading the charge.

The Influence of Open Standards

The Dell'Oro report also highlights the burgeoning influence of open standards in the DCPI market. Initiatives and specifications introduced during the Open Compute Project summit are driving greater collaboration among operators and vendors. Among these specifications, the latest in high-voltage and DC power designs, alongside the innovative Deschutes open CDU specification, are key to enhancing ecosystem maturity and facilitating easier qualification processes.

Trends in Industry Consolidation

The market landscape is also characterized by a wave of consolidation, with major acquisitions reflecting the competitive nature of the industry. Notable mergers include Eaton’s acquisition of Boyd Thermal and Vertiv’s purchase of PurgeRite, demonstrating the urgency among vendors to enhance their thermal and power capabilities to address rising customer demands.

Meanwhile, emerging competitors are making significant strides, with players like Aaon and Modine gaining remarkable momentum. Aaon has amplified its data center thermal business dramatically within a few quarters, capitalizing on robust demand from hyperscalers who are diversifying their suppliers. Modine has also secured important hyperscale wins, affirming its growing relevance in major AI campus deployments.

Future Outlook

Looking ahead, the market outlook for the Data Center Physical Infrastructure sector appears promising, with DCPI revenues projected to maintain a robust high-teens growth trajectory through the fourth quarter of 2026. Architectural transitions—including the shift towards higher-voltage distribution, new DC power architectures, and the rapid advancement of liquid-cooling solutions—are anticipated to redefine data center infrastructure in the latter half of the 2020s.

The full report by Dell'Oro Group provides an extensive analysis of the DCPI market, covering various components such as uninterruptible power supplies (UPS), thermal management solutions, power distribution systems, and more. By dissecting market trends and competitive landscapes, it offers invaluable insights for stakeholders looking to navigate this rapidly evolving sector.

For more information about the report, it is recommended to contact Dell'Oro Group directly. Their expertise in telecommunications, security, and data center infrastructure makes them a leading authority in market intelligence.

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About Dell'Oro Group

Dell'Oro Group is renowned for its thorough market research in telecommunications, security, enterprise networks, and data center infrastructure. Their reports provide both quantitative data and qualitative insights essential for informed business decisions.