Data centers are virtual or physical infrastructure used by different business enterprises to accommodate their server, computing and networking components and systems. It is a centralized repository used to store and manage mission critical data of several business operations.
Albany, NY -- (SBWIRE) -- 09/20/2016 -- According to the report, the global data center equipment market is expected to rise from US$38.2 bn in 2015 to US$72.1 bn by 2020. On the basis of product, the servers segment will continue to lead the market and is expected to represent 28.1% of the market by 2020. By end use, the telecommunications segment, followed by the BFSI segment, is anticipated to lead the global market in the coming years. The telecommunications segment is likely to account for 27% of the market by 2020. Regionally, North America is likely to continue to be the dominant segment, and is expected to account for 53.1% of the data center equipment market by the end of 2020.
Increasing Virtualization in Network Environments to Boost Demand for Data Center Equipment
The growing use of virtual servers by organizations and individuals is one of the biggest drivers for the global data center equipment. A large number of enterprises are dependent on data centers' efficiency owing to benefits such as increased productivity and reduced operational cost. Issues with the data center industry such as the inefficiency of power utilization are resolved by virtualization. Thus, virtualization is playing an important role in driving the data center equipment market. The rising adoption of cloud services and big data is another factor helping the market. Frameworks such as Hadoop can store huge data sets in distributed computing environments and offer improved performance of business intelligence systems and data warehousing. This will also have a positive impact on the global data center equipment market.
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Shortage of Technically Skilled Workforce to Hinder Growth of Market
The lack of a workforce with adequate technical skills to run the data center equipment is posing a challenge for the market. Virtualization of data centers is still a new technology and professionals need to undergo sufficient training to enable quality delivery of the desired goals of an organization. "Further, administrators need diverse knowledge to maintain and monitor different servers, networks, storage, and security devices, in the virtualization process," states a TMR analyst. Thus, it is crucial to have trained professionals with the expertise to manage a virtualized network in data centers.
The increasing consumption of energy in data centers as a result of a large number of users connecting to the internet is one of the challenges faced by the data center equipment market. Many organizations face the problem of meeting adaptability needs, which are restraining the growth of the data center cooling systems market.
Green Data Centers Emerging as Growing Trend in Market
Energy expenses can become a significant burden for organizations running data centers. Additionally, stringent government regulations and growing awareness of corporate social responsibility are creating a need for energy efficient data center infrastructure. As such, green data centers offer efficient solutions as they are powered by renewable sources of energy such as geothermal, biomass, wind, and solar energy. Moreover, the emergence of innovative photovoltaic technologies and advancements in existing photovoltaic solar panels are projected to improve the efficiency offered by data center equipment in future. This will create new opportunities for growth in the market.
The global data center equipment market is led by a large number of multinational players across the value chain. The top three players in the market, which are Hewlett-Packard Company, Cisco Systems, Inc, and Brocade Communications Systems Inc., accounted for 30.9% of the market in 2013. Continuous innovation by numerous players in the industry and merger and acquisition activities are the key features of the data center equipment market, states a new report by Transparency Market Research (TMR). Moreover, since no external substitutes exist for data center equipment, the market only faces a threat from internal substitutes such as cloud storage. High R&D costs and initial capital investment requirements are expected to lower the chances of new entrants establishing a firm foothold in the industry.