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Data center infrastructure market poised for continued growth, Dell’Oro report confirms

Data center infrastructure market poised for continued growth, Dell’Oro report confirms

The Data Center Physical Infrastructure (DCPI) market has experienced five consecutive quarters of double-digit year-over-year growth, according to a report from Dell’Oro Group.

While pandemic-induced orders are declining, the market is seeing a new driver of revenue growth with early AI deployments. Some vendors are securing orders for equipment optimized for large-scale AI workloads, Dell’Oro says.

The 3Q 2023 Data Center Physical Infrastructure quarterly report also highlights Vertiv‘s performance in the market, with growth and market share gains. North America, Asia Pacific (excluding China), Europe, the Middle East and Africa (EMEA) were the fastest-growing regions and the Caribbean and Latin American (CALA) regions experienced solid revenue growth.

Thermal management and power distribution emerged as the primary drivers of product growth. The report also notes that market growth rates are anticipated to remain higher than historic levels, driven by AI deployments.

The story of generative AI infrastructure began in Q1 2023 with the Nvidia H100, setting the industry standard for AI adoption, according to Lucas Beran, research director at Dell’Oro Group.

“End-users have utilized significant resources to obtain initial shipments of the costly and supply-constrained GPU,” he states.

Beran also notes that the investments in power and cooling related to AI began to impact market growth in the third quarter of 2023. This was especially noticeable in rack power distribution units, with a significant presence of customized products with higher power ratings.

“The next few quarters will increasingly emphasize the transition in DCPI market drivers, from broad based pandemic induced digitalization and supply chain constraints to large scale, purpose-built AI facilities,” Beran comments.

Dell’Oro Group is a market research firm specializing in strategic competitive analysis for the telecommunications, security, enterprise networks, and data center infrastructure markets.

Dell’Oro Group’s quarterly report includes market sizes and forecasts for components such as uninterruptible power supplies, thermal management and rack power distribution. The report also provides insights into market trends, prospects and the competitive landscape.

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