Global Data Center Rack Market Size: USD 4.46 Billion in 2023 Growing to USD 9.17 Billion | SNS Insider

The Data Center Rack Market was valued at USD 4.46 Billion in 2023 and is projected to reach USD 9.17 Billion by 2032, growing at a CAGR of 8.34% during 2024–2032. The rapid expansion of digital technologies, including cloud computing, big data analytics, and IoT, is driving demand for efficient IT infrastructure and scalable, high-performance data centers. Organizations across industries now require reliable racks to house servers, networking equipment, and IT components. Edge computing is further accelerating the adoption of compact, modular racks that reduce latency and enhance real-time processing. In North America, data center supply increased by 70% quarterly, with vacancy rates dropping to 2.8% and rents rising by 15–20%. Approximately 40–50% of new racks are designed for higher-density servers, reflecting the growing need for space and power efficiency in modern data centers.

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Market Drivers

The rise in data localization regulations and growing cybersecurity threats are major factors propelling the data center rack market. Governments worldwide are implementing stricter data privacy laws, forcing organizations to establish or scale local data centers. Industries such as BFSI, healthcare, and government are particularly impacted, driving investment in advanced, scalable racks integrated with monitoring systems and access controls. Additionally, the increasing adoption of modular and prefabricated data centers supports rapid deployment and scalability. Modular racks, optimized for space and cooling, are popular among SMEs and industries requiring quick set-up, flexible configurations, and cost-efficient operations. The rise of edge computing further reinforces demand for smaller, adaptable racks capable of supporting local data processing.

Market Restraints

Thermal efficiency, scalability, and customization remain key challenges in the data center rack market. High-density racks generate significant heat, making effective cooling critical to prevent equipment failure and downtime. Organizations must invest in advanced cooling technologies, which may not seamlessly integrate with existing racks, leading to operational complexities. Moreover, evolving IT infrastructure and technology demand racks that support high-density equipment such as GPUs for AI applications, while maintaining compatibility with legacy systems. The customization and deployment of racks can be time-consuming, creating bottlenecks and slowing expansion.

Market Segmentation

• By Rack Type: Cabinets dominated the market in 2023 with 57.5% share, due to their versatility, security, and integrated cooling and cable management features. They are preferred in compliance-driven sectors like BFSI, healthcare, and government. Open-frame racks are projected to record the highest CAGR from 2024 to 2032 due to lower cost, easier access for maintenance, and suitability for edge computing and modular data centers. Their lightweight and energy-efficient design aligns with sustainability trends in data center operations.
• By Rack Height: The 42U and below segment held the largest market share (58.7%) in 2023, widely used in small and medium-sized data centers, colocation facilities, and enterprises. The 43U–52U segment is expected to grow fastest, supporting high-density computing in hyperscale data centers, AI workloads, and industrial processes requiring efficient utilization of space and power.
• By Rack Width: The 19-inch racks dominated the market in 2023 (67.5% share), as this standard fits most IT equipment and is compatible with cable management and cooling solutions. 23-inch racks are expected to witness the highest CAGR due to their suitability for high-performance computing, AI accelerators, and evolving edge computing requirements. Their wider design allows improved airflow and easier cable management in high-density environments.
• By Data Center Size: Large data centers captured 57.3% of market share in 2023, driven by the need for centralized IT resources supporting AI, cloud, and big data. Small and mid-sized data centers are expected to grow fastest from 2024 to 2032, fueled by the rise of edge computing, low-latency processing, and adoption of modular, prefabricated infrastructure.
• By Industry: The retail sector led the market in 2023 (25.7% share) due to e-commerce growth, digital payments, and omnichannel strategies requiring reliable IT infrastructure. The IT & telecom sector is projected to grow at the fastest CAGR, driven by high-density servers for AI, ML, cloud services, and hyperscale data center adoption.

Regional Analysis

In 2023, North America led the data center rack market with 43.6% share, supported by hyperscale data centers from AWS, Microsoft, Google Cloud, and Meta, alongside stringent data security regulations. Asia-Pacific is expected to exhibit the highest CAGR from 2024 to 2032, driven by rapid digital transformation, 5G deployment, and investments from Alibaba Cloud, AdaniConneX, and Google.

Key Players

Major players in the Data Center Rack Market include Schneider Electric, Huawei Technologies, Rittal, Vertiv, Eaton, Delta Electronics, Hewlett Packard Enterprise, IBM, Intel, APC, Legrand, Cisco, Siemens, Tripp Lite, NetApp, Samsung Electronics, Zyxel, Panduit, and Conteg. These companies focus on innovative, modular, AI-ready, and energy-efficient rack solutions to meet the growing demand in hyperscale, edge, and AI-focused data centers.

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Recent Trends

• In March 2024, Rittal launched its TS IT Colo rack for rapid deployment in colocation centers.
• In September 2024, Vertiv unveiled an AI-ready modular data center featuring advanced liquid cooling to accelerate AI infrastructure deployment by up to 50%.
• In March 2024, Eaton introduced its SmartRack modular data center solution with integrated cooling and power management for scalable IT infrastructure.

Conclusion

The Data Center Rack Market is poised for strong growth, driven by digital transformation, cloud adoption, 5G, AI, and edge computing. The increasing demand for scalable, high-density, and energy-efficient racks will continue to shape market developments. Modular, prefabricated, and AI-ready rack solutions will play a critical role in supporting the next generation of data centers globally.

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