Server Market Trends

Growth Drivers

• Prominent advancements in Rack PDU Power: Many data centers often have their bottom lines due to the lack of intelligent and cutting-edge rack power distribution unit (PDU)-based metering for addressing power quality issues. data centers typically face challenges in obtaining power-quality data at the rack level due to the lack of sufficient information from PDUs, inevitably leading to compromised performance and safety. This underscores the need for a robust solution that delivers comprehensive and precise power-quality data.
  
  Usually, in most data centers the IT load uses 40% of the power load and uses several power chain designs to regulate power efficiency to reduce the risk of outages. The next-generation rack PDUs are being designed with advanced built-in power quality diagnostic tools to ensure the optimal fault tolerance level at both the inlet and outlets. With the development of these switch-mode data center power supplies, there have been regulations defined to standardize their operation and one such policy includes Curve by the Computer and Business Equipment Manufacturers Association (CBEMA) as a part of the Information Technology Industry Council (ITIC).
  
  Furthermore, the U.S. Energy Star program has outlined detailed specifications for data center equipment. However, while Energy Star applies to the latest power supply requirements, the older devices are transitioning to ensure compliance to avoid lower power factors and total harmonic distortion. This is particularly true for non-major server vendors and older servers. The server market is marked by numerous investments and development of modern servers. Legrand’s Raritan and Server Technology product portfolio has a range of intelligent rack PDU models that comprise the Server Technology PRO4X and the Raritan PX4 with built-in advanced power rack quality metrics. In February 2024, Exagate launched its 2nd Generation Intelligent PDU featuring an IPS LCD for improved lifespan and state-of-the-art features to cater to evolving needs of modern IT infrastructure.
• Shift away from cloud to on premise as a part of sustainability efforts: A highlight from the Earth March 2024 report says that only 22.3% of the overall e-waste generated in 2022 was formally documented and recycled in an environmentally sound manner. The year’s e-waste mass left U.S. USD 62 billion worth of unaccounted recoverable natural resources. The global annual e-waste generation is swelling at 2.6 million tonnes and is on track to surpass 82 million tonnes by 2030, states UNITAR. It further discusses an anticipated drop in the recycling rate from 22.3% in 2022 to 33% by the end of 2030. Unrecycled e-waste potentially mercury contamination and associated health risks.
  
  More end use industries including healthcare, communications, IT, and automotive have identified environmental compromises and challenges associated with on-premise servers and are adopting cloud-based. Cloud computing offers several offers software as a service, software storage, software backup, and cloud hosting solutions. Cloud servers enable greater scalability, unrestricted access to processing power, and ease of memory and space upgrades to accommodate increased user counts. These features make cloud servers perfect for expanding enterprises.
• Proliferation of 5G technologies: The adoption of 5G technology is expected to result in a notable rise in server demand. Higher bandwidth, reduced latency, and quicker data transfer rates are offered by 5G networks, which will increase data traffic volumes and open the door to new services and applications including improved IoT solutions, augmented reality (AR), and virtual reality (VR). Servers need to be able to handle the increased data load and have the computing power to enable these improvements. The increasing requirement for dependable and robust servers is necessary to manage increased network capacities and guarantee the smooth delivery of state-of-the-art services and applications.

Challenges

• Security concerns: Cybercriminals are increasingly using security lapses and cyberattacks as means of stealing or interfering with online business operations, misusing consumer data, or intercepting online transactions. Deploying strong counterattack software is crucial for organizations to mitigate the risk of future security vulnerabilities. As a result, the server market's growth is being restrained by the growing number of cyberattacks and security vulnerabilities.
• Lack of supply chain: Production and shipment timelines for servers have been significantly hampered by supply chain interruptions and shortages of components. Critical server components are less readily available due to delays and higher costs brought on by shortages of semiconductors and logistical issues. While producers have progressively increased their production capacity and adjusted to these supply-side challenges, the continuous requirement for prompt and effective component sourcing affects production schedules and worldwide server shipment dynamics, impeding server market expansion.