Global server shipments are expected to increase 5 percent annually next year, Taipei-based Digitimes Research said in a report on Monday.
Shipments would increase by a compound annual growth rate of 6.5 percent from this year to 2024, it added.
Three main factors would drive the server market over the period: an increasing number of companies implementing digital transformation, the growing popularity of artificial intelligence (AI) applications and hybrid cloud systems being promoted by cloud data center firms, Digitimes said.
Demand for servers would continue to increase, as US technology giants, such as Microsoft Corp, Amazon Web Services Inc, Alphabet Inc’s Google and Facebook Inc, have begun establishing data centers around the globe, it said.
As the implementation of 5G technology accelerates, surging 5G data transmission volumes are also expected to boost server demand through 2023, the report said.
There are several growing trends in the server market, such as rising demand for AI-specific servers from clients who want to develop AI models due to concerns over costs and security, as 5G is around the corner, it said.
Meanwhile, multiple cloud management and hybrid cloud platforms are transforming into a battlefield for server suppliers, as such services become easily accessible, the report said.
Server companies are providing hyperconverged infrastructure (HCI) products, which combine traditional hardware with virtualization technologies, providing a more flexible structure that allows clients to reduce the cost and time needed to combine heterogeneous resources, it said.
In addition, some players in the server industry have started connecting their software-defined data centers, in which all infrastructure is virtualized and delivered as a service, with HCI to enable digital transformation for clients, the report said.
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