Server Market to grow by USD 41.95 Billion (2025-2029), fueled by rising edge computing needs, report on how AI is driving market transformation - Technavio

NEW YORK, Jan. 28, 2025 /PRNewswire/ -- Report with the AI impact on market trends - The global server market size is estimated to grow by USD 41.95 billion from 2025-2029, according to Technavio. The market is estimated to grow at a CAGR of  7.6%  during the forecast period. Growing need for edge computing is driving market growth, with a trend towards using ai for server workload optimization. However, cyber security challenges  poses a challenge. Key market players include Amazon.com Inc., ASUSTeK Computer Inc., Bloom Energy Corp., Cisco Systems Inc., Dell Technologies Inc., Fujitsu Ltd., Hewlett Packard Enterprise Co., Huawei Technologies Co. Ltd., Inspur Group., Intel Corp., International Business Machines Corp., Lenovo Group Ltd., NEC Corp., NVIDIA Corp., Oracle Corp, Quanta Computer Inc., SAP SE, SMART Global Holdings Inc., and Super Micro Computer Inc..

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Market Driver

The Server Market is experiencing significant growth, driven by trends in Data Centers, Cloud Service Providers, IT and Telecom, Healthcare, E-commerce, and the Work-from-Home model. Server sales are surging for Web, File, Network, Database, Dedicated, and Cloud servers. Hyperscalers lead the market, with GPU server shipments increasing. Digital transformation is a key driver, with macro-economic factors like inflation, economic activity, and supply chain disruptions impacting spending growth. Emerging technologies like AI, IoT, 5G, Edge Computing, and Big Data are fueling demand for server infrastructure initiatives from IT hardware manufacturers. Virtualization and Cloud Computing are also major trends. The market sizes are forecasted using techniques like Exponential Trend Smoothing and the S-curve function. Server designs focus on energy efficiency and sustainability. IT industry investment in CPU platforms, Storage Solutions, and Processors continues, with Unit Demand and Spending Growth expected to remain strong. Country-specific associations and National Statistical Offices provide key market indicators. Modernization, Cloud Deployments, and Edge Deployments are mission-critical investments. Macroenvironment factors, workload choices, and CPU platforms are also influencing the market. Excess inventory, Energy Prices, and Transportation Costs are challenges to consider. 

Server workload optimization is a critical aspect of data center management, and Artificial Intelligence (AI) plays a significant role in enhancing efficiency and performance. Vendors are developing advanced servers to handle AI workloads, while AI technology is being used to address complex infrastructure challenges, such as energy consumption and security. Traditional methods of improving server efficiency through human intervention may not be sufficient due to the dynamic nature of data center resource demands. Data centers are therefore focusing on automation in computing resource allocation and power usage efficiency to meet the evolving needs of their clients. AI algorithms and machine learning techniques enable optimal resource utilization, ensuring maximum performance and cost savings. 

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• The Server Market is experiencing significant growth, driven by various sectors including data centers, cloud service providers, IT and telecom, healthcare, and e-commerce. Challenges such as the work-from-home model, digital payments, and emerging technologies like cloud servers, virtualization, big data, cloud computing, 5G, edge data centers, AI, and IoT, are driving the demand for server sales. IT infrastructure initiatives from IT hardware manufacturers are also contributing to the market size. Key market indicators show unit demand and spending growth in server shipments. Hyperscalers, GPU server shipments, and CPU platforms are also major factors. However, macro-economic factors like inflation, economic activity, supply chain disruption, geopolitical conflict, and energy prices pose challenges. Digital transformation in industries like e-commerce, online services, and IT industry is leading to increased investment in IT infrastructure. Market sizes for server designs, processors, storage solutions, and server types like web servers, file servers, network servers, database servers, and dedicated servers are forecasted to grow. Country-specific associations and national statistical offices provide insights into the level of digitization and forecasting techniques like exponential trend smoothing and S-curve function. Modernization of IT infrastructure, cloud deployments, and edge deployments are essential for mission-critical investments. Energy-efficient and sustainable systems are becoming increasingly important in the macroenvironment.
• Enterprises in sectors like Banking, Financial Services and Insurance (BFSI) and healthcare face growing challenges in safeguarding their confidential data. Cyberattacks have become more frequent, putting sensitive information, including financial transaction details and customer personal data, at risk. Regulatory bodies, such as the General Data Protection Regulation (GDPR) in the EU, demand data protection measures. Neglecting security could lead to data breaches. Enterprises must implement security solutions like data encryption, firewalls, web application firewalls, intrusion detection systems (IDS), and deep packet inspection (DPI) to mitigate risks.

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This server market report extensively covers market segmentation by  

1. Product 
• 1.1 Rack
• 1.2 Blade
• 1.3 Micro
• 1.4 Open compute project
• 1.5 Tower
2. End-user 
• 2.1 IT and telecom
• 2.2 BFSI
• 2.3 Government and defense
• 2.4 Healthcare
• 2.5 Others
3. Geography 
• 3.1 North America
• 3.2 Europe
• 3.3 APAC
• 3.4 South America
• 3.5 Middle East and Africa

1.1 Rack-  Rack servers are essential components of data centers, providing the computational power required for running applications, processing data, managing databases, hosting websites, handling virtualization, and executing various workloads. These servers, housed in server racks, offer convenience for system administrators and technicians through easy installation, diagnosis, and part replacement, reducing downtime. Rack servers are popular in enterprises with fixed business requirements and among SMEs due to their space efficiency. The global server market has seen substantial growth in the past five years, driven by digital transformation initiatives and the need for powerful computing resources for modern applications, big data analytics, AI machine learning, and IoT deployments. As a result, the demand for rack servers is anticipated to continue growing steadily during the forecast period.

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The Server Market is experiencing significant growth worldwide as businesses continue to prioritize digital transformation. Data centers and cloud service providers are major consumers of servers, with IT and telecom industries also contributing. The work-from-home model and e-commerce websites have accelerated server demand, leading to increased spending growth. Cloud servers, including GPUs, are in high demand due to the rise of online services and digital payments. Edge computing is also gaining traction, requiring smaller, more distributed servers. Market sizes for server sales are projected to reach new heights, driven by macro-economic factors such as e-commerce and online services. Processors and storage solutions are key components of servers, with hyperscalers leading the way in unit demand. However, the pandemic, inflation, and economic activity fluctuations, as well as supply chain disruptions, pose challenges to the market's growth trajectory.

The Server Market is a dynamic and evolving sector driven by the increasing demand for IT infrastructure to support data centers, cloud service providers, IT and telecom, healthcare, e-commerce websites, digital payments, and other online services. The market is witnessing exponential growth due to the work-from-home model and the digital transformation of various industries. Cloud servers, virtualization, emerging technologies like AI, IoT, and 5G, and edge computing are key drivers. IT infrastructure initiatives, server designs, and IT hardware manufacturers are investing in new technologies and innovations to meet the growing demand for server shipments. Market sizes are forecasted using techniques such as Exponential trend smoothing and the S-curve function. Macro-economic factors like inflation, economic activity, supply chain disruption, geopolitical conflict, and energy prices also impact the Server Market. Key market indicators include unit demand, spending growth, GPU server shipments, and CPU platforms. National statistical offices and country-specific associations provide valuable data on the level of digitization and IT industry investment. Workload choices, excess inventory, energy prices, and transportation costs are also important considerations for hyperscalers and other server buyers. Modernization, cloud deployments, and edge deployments are essential for mission-critical investments.

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Product
• Rack
• Blade
• Micro
• Open Compute Project
• Tower
• End-user
• IT And Telecom
• BFSI
• Government And Defense
• Healthcare
• Others
• Geography
• North America
• Europe
• APAC
• South America
• Middle East And Africa

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

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SOURCE Technavio