Servers Market Size, Share & Industry Analysis, By Server Type (Rack Servers, Blade Servers, and Tower Servers), By Processor (x86 and Non x86), By Environment Type (Cloud Servers, AI Servers, and Edge Servers), By Vertical (BFSI, IT & Telecom, Healthcare, Government, Energy & Utilities, and Others), and Regional Forecast, 2024-2032

The global servers market size was valued at USD 129.29 billion in 2023. The market is projected to be worth USD 136.69 billion in 2024 and reach USD 237 billion by 2032, exhibiting a CAGR of 7.1% during the forecast period.

Servers are the foundation of enterprise IT environments, providing computing power and storage for everything, from cloud and AI solutions to applications, email, web content, media, and more. They are designed to perform a single task, such as an email server receiving and storing emails and then sending them to the requesting client. The server also performs many tasks, such as being a file and printer server, storing files, accepting print jobs from clients, and then sending them to printers connected to the network.

The growing use of e-commerce websites and OTT platforms also increased the installation of servers during the COVID-19 pandemic. The rising trend of digital payments led to an increased demand for the market during the COVID crisis. Newer applications require specific configurations and high computational demands from users, and service providers are increasingly adopting cloud servers to operate efficiently.

IMPACT OF GENERATIVE-AI

Artificial Intelligence Continues to Demonstrate Various Benefits for Servers

AI servers are essential for training machine learning models, managing big datasets, and efficiently enhancing algorithms. They allow inference processing for real-time data analysis in applications, such as fraud detection and recommendation systems. Generative AI models, such as large language models and image generators require substantial computational resources for training and inference. This boosts the demand for powerful servers equipped with high-end GPUs and TPUs. Furthermore, to reduce latency and bandwidth usage, there is a growing trend of deploying AI capabilities at the edge. This shift requires smaller yet powerful servers that are capable of running AI models locally.

Servers Market Trends

Increased Advancement in Emerging Technologies to Drive Market Growth

Continuous advancement in emerging technologies, such as AI, Big Data, IoT, and 5G, and increased adoption of innovative solutions based on these technologies across various industries and verticals are driving the demand for servers in emerging economies. For instance,

According to an industry analysis, Artificial Intelligence (AI) adoption increased by 18% in 2024 compared to the previous year.

As enterprises move to private and public clouds, edge clouds, colocation facilities, and data centers have begun to use Software-Defined Networking (SDN) and virtualization to facilitate the implementation of new data analysis models. However, after realizing that the current servers cannot handle complex workloads, market players in various regions are introducing new server designs with higher computing power.

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Servers Market Growth Factors

Demand for Hyperscale Data Centers and Cloud Computing to Propel Market Growth

Consumers and businesses are increasingly relying on streaming services, cloud computing, and other data-intensive functions. This demand has driven greater investments in servers and cloud infrastructure ecosystems capable of handling next-generation data workloads. Hyperscale data centers rely on thousands of servers and a dedicated infrastructure to scale the computing power needed for reliable and high-performance digital services. For instance,

According to industry experts, the data center sector in India is expected to surpass 1.3 GW of capacity and grow 2.4 times by 2024. The hyperscale market is expected to increase by 20% from 2021 to 2026, with over 300 new hyperscale locations under development around the world today. This number is expected to exceed 1,000 by the end of 2024.

The servers used must have low latency and secure hardware performance, providing services that are defined by software rather than hardware. The shift toward hyperscale data centers (and the need for servers) is largely driven by the large enterprises that offer and use cloud-based computing.

RESTRAINING FACTORS

Technological Obsolescence and High Initial Costs to Emerge as Key Restraints for Server Market

The server infrastructure, especially for large-scale deployments, comes at a high cost. This situation is an obstacle for Small and Medium Enterprises (SMEs) or organizations with limited capital. A startup with a small budget needs a server infrastructure to accommodate its growing user base. High upfront costs to purchase servers and related equipment also cause financial complications, thereby slowing down their expansion plans.

The server market is characterized by rapid technological advances, leading to frequent hardware and software updates. Organizations must continually evaluate and upgrade their server infrastructure to keep up with changing technologies. An IT services company depends on existing servers to operate. Outdated hardware confines their ability to support modern applications and deliver high-performance services, thereby affecting their competitiveness.

Servers Market Segmentation Analysis

By Server Type Analysis

Growing Need for Scalable Data Centers by Market Players Boosted Demand for Rack Servers

Based on server type, the market is segmented into rack servers, blade servers, and tower servers.

The rack servers segment held the highest market share in 2023 and is expected to record the highest CAGR during the forecast period. These servers are configured to support a wide variety of requirements and are independently mounted on a rack. They help meet low to high IT requirements.

Additionally, rack servers require less floor space, are instantly cooled, and can be easily expanded. The growth of this segment can be attributed to the growing demand for high-density computing, scalable data centers, and advancements in emerging technologies, such as cloud computing, IoT, and edge computing. These factors are creating major growth opportunities for market participants. Rack servers provide low-cost information storage and processing facilities, helping businesses set up servers for private use.

By Processor Analysis

Rising Digital Transformation Initiatives in Multiple Industries Fueled Use of x86 Processors

Based on processor, the market is segmented into x86 and Non x86.

The x86 segment held the major servers market share in 2023 and will record the highest growth rate during the forecast period due to the growing demand from industries leading the digital transformation initiatives. Industries, such as construction and commercial real estate are leveraging the latest technologies, such as x86 servers, AI, and data analytics to modernize their operations. This focus on innovation results in better fire safety standards and more efficient asset management processes.

x86 servers play a key role in improving fire safety and streamlining property management functions for commercial real estate companies globally. Advanced systems now use the data collected and analyzed on high-capacity x86 server platforms to provide exceptional operational data. Connected smoke detection systems constantly monitor properties in real time through an integrated x86 server infrastructure. This enables rapid problem detection, regulatory compliance monitoring, predictive maintenance planning, and inspection plan optimization.

By Environment Type Analysis

Increased Demand for Server Scalability & Virtualization Boosted Adoption of Cloud Servers

Based on environment type, the market is segmented into cloud servers, AI servers, and edge servers.

The cloud servers segment held the major market share in 2023. This growth can be attributed to the increasing need for server scalability, virtualization, and cost efficiency for businesses. The growing adoption of cloud computing in various industrial sectors, rising need for scalable & cost-effective IT infrastructure, growing demand for server virtualization, and adoption of container-based technologies to improve application scalability are all contributing to the segment's growth.

The AI servers segment will grow at the highest rate during the forecast period. As AI continues to expand and develop across many industries, the need for a strong server infrastructure capable of supporting these complex algorithms and applications will increase. This dynamic landscape encourages continuous innovation, a competitive market environment, and expansion in the AI server industry. For instance,

In November 2023, KX launched KDB.AI Servers Edition, a scalable, high-performance vector database designed for temporal gen-AI and contextual search. It can be easily deployed through Docker in a variety of environments, including hybrid and on-premises systems. This enables businesses to quickly leverage their AI capabilities through streamlined setup processes, facilitating rapid adoption and use.

By Vertical Analysis

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Growing Implementation of Cloud-Based Services Boosts Product Demand in IT & Telecom Sector

Based on vertical, the market is segmented into BFSI, IT & telecom, healthcare, government, energy & utilities, and others.

The IT & telecom segment held the highest market share in 2023. This sector has observed a transformation in the deployment of mobile to fixed broadband services. The IT industry has witnessed an increase in the deployment of cloud-based services instead of on-premises services. Subscribers currently receive most services through a single service provider. In addition, the ever-changing multimedia capabilities of mobile phones create new challenges related to the delivery and performance of after-sales service. In addition, network operators are transforming into software companies and mainly information technology companies. These factors will contribute to the growth of the segment.

The healthcare segment is expected to record the highest CAGR during the forecast period. Medical/healthcare facilities have a lot of sensitive and confidential data that they need to keep secure. In fact, healthcare organizations are also subject to various laws that have been in place for many years to keep patient data and other medical records safe. Important data, such as diagnosis, tests performed, medications taken, symptoms, and patient records must be kept securely in hospital records. Thus, the demand for servers in the healthcare field will increase significantly in the future.

REGIONAL INSIGHTS

Geographically, the market is divided into five key regions: North America, Europe, Asia Pacific, the Middle East & Africa, and South America. They are further categorized into countries.

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North America is expected to hold a major global servers market share. North American market analysis includes the U.S., Canada, and Mexico. The region's growth can be attributed to the presence of prominent players in the market, including Dell Inc., Alphabet Inc., Hewlett Packard Enterprise Development LP, and Microsoft. Additionally, the rising adoption of cloud services will contribute to regional market growth. For instance,

According to a survey by BARC, a German analytics company specializing in enterprise software, 29% of North American respondents are fully committed to a cloud strategy.

The Asia Pacific servers market growth is attributed to the presence of key players in the region, including Tencent Cloud, Alibaba.com, Baidu, and Huawei Technologies Co., Ltd. Additionally, the region is witnessing strong progress in digitalization, especially in India. 

According to Southeast Asia Development Solutions, Southeast Asia's digital economy was worth USD 200 billion in 2022. The strong growth of the digital economy is driving the demand for servers and is expected to contribute to the growth of the Asia Pacific market during the forecast period.

Europe accounts for the second-largest share. The increasing construction of large data centers and the rising colocation trend are expected to drive the expansion of the European market. For instance,

NTT Limited opened the Hamstead 4 data center in the U.K. in 2021. Mega data centers process and store large amounts of data and require high-capacity servers to manage and monitor the operation of computer devices. The exponential growth in the amount of data consumed by many individuals, organizations, and businesses will drive the regional market growth.

South America, the Middle East, and Africa are becoming increasingly popular markets for servers. The adoption of advanced technologies, such as hyperscale data centers and cloud computing is becoming widespread in these regions.

KEY INDUSTRY PLAYERS

Key Players to Emphasize On Advanced Servers to Strengthen their Market Positions

The prominent players in the market, such as Dell, Inc., HPE, and Nvidia Corporation are expected to dominate the market. These players are focused on offering server options to cater to advanced customer requirements. Similarly, they are adopting various strategies, such as investments and partnerships to continue their dominance in the coming years.

List of Top Servers Companies:

• Dell, Inc. (U.S.)


• Hewlett Packard Enterprise Development LP (U.S.)


• Nvidia Corporation (U.S.)


• IBM Corporation (Canada)


• Hitachi Vantara, LLC (Japan)


• Inspur (China)


• Lenovo (China)


• Super Micro Computer, Inc. (U.S.)


• Cisco Systems, Inc. (U.S.)


• Fujitsu (Japan)

KEY INDUSTRY DEVELOPMENTS:

• May 2024: Ericsson and Dell Technologies partnered to combine their deep industry expertise with telecommunications solutions, software, and support to oversee Communications Service Providers (CSPs) throughout their cloud transformation journey and Radio Access Network (RAN).


• May 2024: GIGABYTE launched the G593-SD0, NVIDIA’s 5U AI server, to support the HGX H100 8 x SXM5. The company continues to expand its AI super server lineup with AI servers by presenting the Grace Hopper super chip and AI servers supporting the AMD MI300X GPU and next-generation MI300A APU super chip.


• April 2024: Hewlett Packard Enterprise announced that its “Made in India” servers were being installed at a large scale to meet the rising demands of Indian customers and design various applications.


• February 2024: Scaleway, a cloud provider based in Europe, launched a range of RISC-V servers. RISC-V is an instruction set architecture for CPUs.


• June 2023: ASUS revealed its expertise in providing comprehensive solutions for high-performance computing, AI, and various business needs through its data center solutions. ASUS demonstrated its expertise in server, data center architecture, and storage through support for Intel, NVIDIA Technologies, and AMD.

REPORT COVERAGE

The study on the market includes prominent areas across the world to help the user get a better knowledge of the industry. Furthermore, the research provides insights into the most recent market trends and an analysis of technologies that are being adopted quickly across the world. It also emphasizes some of the growth-stimulating factors and restrictions, allowing the reader to obtain a thorough understanding of the market.

An Infographic Representation of Servers Market

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