The data center blade server market was valued at USD 15.84 billion in 2020 and is expected to reach USD 25.54 billion by 2026 and grow at a CAGR of 8.29% over the forecast period (2021-2026) . A blade server is a modular server to a rack server, which enables multiple servers to be housed in a compact area than a rack server. These servers are designed to be thin and have only CPUs, memory, integrated network controllers, and sometimes built-in storage drives. Additionally, it consumes less power, hence incorporates with low operational cost. These are some of the factors driving the market for data center blade servers.
- Single or multiple server blades can be inserted or removed without distressing another running system. It mitigates the hardware cost, which is likely to attract the industry players to adapt to the technology, thereby fueling market growth. Additionally, each server blade does not consist of distinct infrastructure and chassis, owing to which the product is relatively cheaper, as compared to other solutions.
- Cloud computing is one of the sectors that has been significantly driving the data center colocation industry. The adoption of cloud computing has been proliferating over the past few years. According to HostingTribunal, the global public cloud computing market is set to reach USD 258 billion in 2019, providing data access from anywhere, is the primary reason for cloud adoption. Moreover, RightScale has stated that the public cloud adoption has reached 92% in 2018 which was 89% the year before.
- Regarding the data center infrastructure, global corporations offering cloud services, and third-party vendors have been identified to support their services with hyper-scale data centers and blade servers to reduce operational costs. Combining blade servers with the cloud can help reduce operational costs and increase efficiency. Cloud provider companies require private networks with high levels of bandwidth and resiliency and support from a robust data center provider.
- However, compared to the rack servers the adoption of blade servers incurred with the higher initial cost, which is restricting its market growth to an extent.
Key Market Trends
Healthcare Segment is Expected to Witness a Significant Growth
- Digitization of consumer health records in the form of electronic medical records (EMR) contributes to data increment. Latest innovations in the medical equipment and modernization of legacy operating systems, such as management of personnel, improvement in the patient response systems, etc., generate a multitude of data, further necessitating the need for data centers. This need for data centers, in turn, drives the demand for data center cooling.
- Telemedicine is increasing in usage, owing to various advantages, such as consumers from any region being able to gain access to the required doctor. It is an efficient method, as both money and time are being saved, owing to the change in the typically scheduled visits, thereby, generating a lot of data, and emphasizing the need for data centers.
- According to the study published by equinix, the global interconnection growth in the healthcare and life science sector is estimated to increase to 169 terabits per second or by 70% of installed interconnection bandwidth in the next five years. This will increase the data traffic with the set of provider and counterparties inside carrier-neutral colocation data centers.
- Healthcare companies are partnering with data center service providers to maintain highly sensitive patient data. For instance, a medical service provider from Dutch, Fysiologic partnered with Equinix, which offers hyperscale data centers in collaboration with GIC to manage the electrocardiogram data for approximately 1 million heart patients of Fysiologic in eight countries worldwide.
North America to Hold a Largest Share
- The region is experiencing a move from individual device and system storage to the core cloud and edge of networks. According to a survey by Intel Security, the number of companies adopting hybrid cloud services alone has risen by three times the previous size. Cloud providers have been increasing security and enabling better and robust systems in organizations, which can be highly beneficial.
- Besides, the companies in the region are extensively investing in AI infrastructure, which demands the need for immediate processing of the vast amount of data being acquired on a real-time basis. In February 2019, the US government announced the Artificial Intelligence Initiative to prioritize AI investments in research and development, increase access to federal data and models for that research and prepare workers to adapt to the era of AI.
- Additionally, the US government has started the Data Center Optimization Initiative (DCOI) to deliver better services to the public while increasing return-on-investment to taxpayers by consolidating many data centers in the country. The consolidation process includes the process for building hyperscale data centers and to shut-off the underperforming ones. Till date, the government has closed over 3,215 data centers in the country.
- In March 2019, Cyxtera Technologies expanded its data center facilities in Silicon Valley, Phoenix, Atlanta, New York Metro, and Toronto, with the expansions increasing the total capacity in these markets to more than 1.5 million sq. Ft., having overall company footprint of more than 2.9 million sq. Ft.
- Such initiative and huge investments by the companies and governments in the region is expected to continue in the forecast period which is estimated to increase the demand for data center blade servers in the region.
The market for data center blade servers is moderately consolidated with the presence of some significant players in the market. Additionally, these companies are continuously investing in making strategic acquisitions and partnerships to gain more market. Moreover, as the companies need more initial capital cost to enter the market, the barrier for entry for new players is high. Some of the recent developments by these companies are mentioned below.
- April 2019 - Fujitsu released its latest blade server PRIMERGY CX400 M4, which is a multi-node blade server enables the flexibility to adapt to various high-performance and technical computing workloads. It is designed with dual-socket and is equipped with the latest generation of the Intel Xeon Processor Scalable Family.
- October 2018 - Microsoft announced the xCloud project, which is a new custom blade server that hosts the internal components of four Xbox One consoles, and associated infrastructure. With this partnership companies are aiming towards offering the live streaming gaming experience to users. The project is expected to complete by the end of 2019.
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1.1 Study Deliverables
1.2 Study Assumptions
1.3 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET DYNAMICS
4.1 Market Overview
4.2 Introduction to Market Drivers and Restraints
4.3 Market Drivers
4.3.1 High Density Servers Per Rack
4.3.2 Low Operational Cost and Power Consumption
4.3.3 Increasing Adoption of Cloud and IoT Services
4.4 Market Restraints
4.4.1 High Initial Investments
4.5 Industry Value Chain Analysis
4.6 Industry Attractiveness - Porter's Five Force Analysis
4.6.1 Threat of New Entrants
4.6.2 Bargaining Power of Buyers/Consumers
4.6.3 Bargaining Power of Suppliers
4.6.4 Threat of Substitute Products
4.6.5 Intensity of Competitive Rivalry
5 MARKET SEGMENTATION
5.1 By Type
5.1.1 Tier 1
5.1.2 Tier 2
5.1.3 Tier 3
5.1.4 Tier 4
5.2 By End-user Verticals
5.2.3 Energy & Utility
5.2.5 Other End-user Verticals
5.3.1 North America
184.108.40.206 United States
220.127.116.11 United Kingdom
18.104.22.168 Rest of Europe
22.214.171.124 Rest of Asia-Pacific
5.3.4 Latin America
126.96.36.199 Rest of Latin America
5.3.5 Middle-East & Africa
188.8.131.52 United Arab Emirates
184.108.40.206 Saudi Arabia
220.127.116.11 Rest of Middle-East & Africa
6 COMPETITIVE LANDSCAPE
6.1 Company Profiles
6.1.1 Cisco Systems, Inc.
6.1.2 Dell, Inc.
6.1.3 Fujitsu Limited
6.1.4 Hewlett-Packard Company
6.1.5 Hitachi, Limited
6.1.6 Huawei Technologies Co., Ltd.
6.1.7 Lenovo Group Limited
6.1.8 NEC Corporation
6.1.9 Oracle Corporation
7 INVESTMENT ANALYSIS
8 MARKET OPPORTUNITIES AND FUTURE TRENDS
Secondary Research Information is collected from a number of publicly available as well as paid databases. Public sources involve publications by different associations and governments, annual reports and statements of companies, white papers and research publications by recognized industry experts and renowned academia etc. Paid data sources include third party authentic industry databases.
Once data collection is done through secondary research, primary interviews are conducted with different stakeholders across the value chain like manufacturers, distributors, ingredient/input suppliers, end customers and other key opinion leaders of the industry. Primary research is used both to validate the data points obtained from secondary research and to fill in the data gaps after secondary research.
The market engineering phase involves analyzing the data collected, market breakdown and forecasting. Macroeconomic indicators and bottom-up and top-down approaches are used to arrive at a complete set of data points that give way to valuable qualitative and quantitative insights. Each data point is verified by the process of data triangulation to validate the numbers and arrive at close estimates.
The market engineered data is verified and validated by a number of experts, both in-house and external.
REPORT WRITING/ PRESENTATION
After the data is curated by the mentioned highly sophisticated process, the analysts begin to write the report. Garnering insights from data and forecasts, insights are drawn to visualize the entire ecosystem in a single report.