According to a recent study from market research firm Graphical Research, the North American data center server market size is set to register a significant growth through 2027 due to the rising need for strong data security and storage systems. Large-scale organizations are making use of advanced technologies, such as IoT and AI, resulting in intense data traffic across various networks.
As per the Cisco Annual Internet Report, nearly 5 billion networked devices/connections will be established in North America by 2023, which would be an increase from the 3 billion connections achieved in 2018. Since MNCs in North America require a large-scale infrastructure to support the heavy flow of data traffic, the demand to have a stable and high-performing data center server will multiply.
Large-scale organizations, such as Cisco Systems Inc., Dell Technologies Inc., IBM Corp., ATOS SE, and NEC Corp., among others, are involved in the creation of advanced technologies for data center servers to turn them into smart machines. They are collaborating with other firms to acquire their know-how and build data center infrastructure that is efficient, robust, and high-performing when it comes to handling large quantities of data.
The North American data center server market share will be valued at over $35 billion by 2027.
The trends that will help achieve this industry forecast during 2021-2027 are mentioned below.
Increased installation of hyperscale data centers.
North America is witnessing a substantial increase in the installation of hyperscale data centers. These data centers can be quite huge and are specifically designed to offer support to large-scale data operations. Technology giants, such as Amazon, Google, IBM, Facebook, and Microsoft, use hyperscale data centers to extract and supply massive volumes of data.
Many cloud service providers in North America are setting up large data centers, as top-performing firms in the region are extensively using their services. For example, Google LLC, in May 2021, announced that it was planning to purchase a property in Quebec, Canada, for around $600 million to expand its data center setup in the country. The demand for data center servers will grow to help hyperscale data centers handle enormous workloads.
OTT services fuel the demand for micro data center servers.
Based on the types of a data center, micro data center servers will be highly adopted by end-users in North America. Demand for over-the-top (OTT) streaming services has increased among consumers in the region. For instance, Netflix Inc. has around 73.9 million paid subscribers in the U.S. and Canada as of February 2021.
The COVID-19 pandemic has caused a major shift in the way entertainment is consumed and has compelled customers to opt for online mediums, such as Netflix, Amazon Prime, and Hulu. It has caused many companies in North America to set up micro data center servers to offer virtual streaming services at high speeds.
Large-scale commercialization of 5G networks.
The introduction of 5G technology and the growing commercialization of these networks have created a positive impact on the growth of data center server market size in North America. The U.S. is predicted to hold a dominant position in offering 5G technologies to its customers. Four telecom pioneers in the country — T-Mobile, Verizon Wireless, DISH Wireless, and AT&T Mobility — are implementing these networks on a large scale. The deployment of 5G technology has prompted organizations to create advanced and high-capacity data center servers to manage a huge amount of data traffic every day.
Role of data center servers in the BFSI sector.
The BFSI sector in North America will set up data center servers to cater to the rising era of digital transformation. Online and contactless payments are gaining traction among customers in the region. For instance, many banks in the U.S. support Fitbit Pay, allowing clients to pay through their Fitbit device. The participants of the BFSI sector are implementing advanced technologies to enhance customer banking experience, resulting in the generation of heavy data traffic.
Banks and other financial institutions are increasing their investments in large-scale data center infrastructure to help them efficiently handle the massive flow of information. These data centers will help the users in processing and supplying data in a safe and secure manner. They will offer the users high flexibility in data operations. The North American data center server market forecast is showing good progress as the installation of the small-, medium-, and large-scale data centers is growing at a notable pace in the region. Rack, blade, tower, and micro data centers servers are being used by a wide variety of sectors, such as IT and telecom, BFSI, health care, government, energy, and manufacturing, among others.