Global Data Center Hardware Market Grows at a Steady CAGR of 8.7%

Introduction

The global data center hardware market size was valued at USD 74.6 billion in 2024 and is projected to grow from USD 80.8 billion in 2025 to USD 157.5 billion by 2033, exhibiting a CAGR of 8.7% during the forecast period (2025-2033). The growing number of hyperscale data centers and the requirement for high-speed, low-latency processing are fuelling the growth. Large Companies require economical and high-performance systems to process their complex computational tasks.

The data center hardware market is growing rapidly as organizations need dependable IT infrastructure to work with large volumes of data. Server infrastructure, storage, and networking equipment represent the primary hardware in data centers.

The demand for better, faster, and more powerful data center hardware is rising as cloud computing, AI, and edge computing take center stage. Companies are pouring money into high-performance servers, faster storage, and stronger networking solutions to handle real-time data processing and the growing AI workload. In March 2025, The Nvidia Accelerated Quantum Research Center (NVAQC) which will integrate quantum hardware with Nvidia's GB200 NVL72 rack-scale systems in what it calls 'accelerated quantum supercomputing.

Major companies like AWS, Microsoft Azure, and Google Cloud keep upgrading their setups, using high-density servers and NVMe SSDs to boost speed and cut delays. At the same time, NVIDIA and Intel push new AI chips that help with machine learning and deep learning tasks.

Market Dynamics

Growing shift towards edge computing accelerating investments in decentralized data center infrastructure

Edge computing is gaining popularity as it facilitates processing data near the point of need instead of shipping all of it to a cloud hub. This pattern is encouraging data centers to make significant investments in decentralized infrastructure involving servers and storage near users. With real-time processing of data necessary in sectors such as IoT, self-driving cars, and smart manufacturing, edge computing is escalating the market growth.

• For instance, Elisa Oyj, a leading telecommunications company, has deployed its first fully automated edge data center for commercial service, integrating Wind River Studio Cloud Platform. This deployment has reduced staff-hours for commissioning by up to 90%, cut deployment time by 50%, and improved process quality by enabling parallel execution with fewer human errors.

Increasing data traffic and cloud adoption fuelling demand for advanced server and storage solutions

With more and more data being used worldwide, the need for better servers and storage solutions is growing. The demand for cloud services, video streaming, and big data analytics is pushing businesses to buy advanced hardware to handle all that data. From storage to processing, data centers need to keep up with the increasing cloud adoption and large amounts of traffic.

• For instance, for instance, in 2024, the total global data volume created, copied, and consumed reached 149 zettabytes. By 2025, this is expected to increase to 181 zettabytes, driven by the rising use of IoT, real-time data processing, and cloud storage.

Regional Analysis

North America is witnessing rapid expansion of the data center facilities which is propelled by the surging demand for AI adoption, growing digitization across diverse end use sectors, ongoing technological advancements, increased data processing demands etc. The U.S. stands as a premier hub for data center hardware demand where the growth is attributed majorly to the presence of global technological giants comprising primarily of Google (Alphabet Inc.), Apple, Microsoft, Meta, IBM, Oracle, Salesforce, X Corp etc. which undertake loads of data storage and processing round the clock, thus require a robust and resilient data center hardware components to handle terabytes of data, reduce the downtime and ensure continuous and reliable operation in peak hours.

Data center hardware development in the Asia Pacific is growing at a significant rate as major companies are taking the strategic initiative to increase their market share through investing in technological innovations, strategic partnerships, and mergers and acquisitions. With rising hyperscale and colocation, data centers infrastructure hardware such as servers, networking gear, and storage are in higher demand because there is a big focus on extremely density-configured technology and energy efficiency. South Korea, China, India, and Japan are emerging in their roles due to their favorable policies, lower operating expenses, and increased organizational uptake of cloud-based services.

Key Highlights

• Based on servers, the global Data Center Hardware Market is segmented into rack-mount servers, blade servers, and others. The rack-mount servers segment is the largest revenue contributor to the market and is projected to exhibit a market share of 54.6% in 2024.
• Based on storage, the global Data Center Hardware Market is segmented into hard disk drives (HDDs), solid-state drives (SSDs), and others. The solid-state drives (SSDs) segment is the largest revenue contributor to the market and is projected to exhibit a market share of 68.8% in 2024.
• Based on networking equipment, the global Data Center Hardware Market is segmented into Ethernet switches, routers, firewalls, and others. The routers segment is the largest revenue contributor to the market and is projected to exhibit a market share of 43.8% in 2024.

Competitive Players

1. Dell Inc.
2. Hewlett Packard Enterprise Development LP
3. IBM
4. Cisco Systems Inc
5. Advanced Micro Devices, Inc.
6. Amazon Web Services
7. Arista Networks, Inc
8. Black Box Corporation
9. Amco Enclosure
10. WesternDigital Corporation
11. Vertiv Group Corp
12. NVIDIA
13. Fujitsu
14. Oracle
15. Schneider Electric

Recent Developments

• In December 2024, Equinix collaborates with Dell Technologies to enhance private AI solutions using the Dell AI Factory with Nvidia. This expands AI-ready infrastructure across Equinix’s 260+ data centers, boosting enterprise AI adoption.
• In August 2024, Alameda Healthcare Group partners with Dell to establish a data center in Cairo, Egypt. Dell will supply IT equipment, advisory services, and infrastructure solutions to enhance Alameda’s digital healthcare operations.

Segmentation

1. By Servers
   1. Rack-Mount Servers
   2. Blade Servers
   3. Others
2. By Storage
   1. Hard Disk Drives (HDDs)
   2. Solid-State Drives (SSDs)
   3. Others
3. By Networking Equipment
   1. Ethernet Switches
   2. Routers
   3. Firewalls
   4. Others
4. By Regions
   1. North America
   2. Europe
   3. Asia Pacific
   4. Middle East and Africa
   5. Latin America