DCPI Vendor Backlogs Jump to New Historic Highs
REDWOOD CITY, Calif., June 13, 2024 /PRNewswire/ — According to a recently published report from Dell’Oro Group, the trusted source for market information about the telecommunications, security, networks, and data center industries, Data Center Physical Infrastructure (DCPI) revenue growth slowed to a mid-single-digit rate in 1Q 2024, as design shifts to support accelerated computing infrastructure and AI workloads need more time to materialize.
“As I predicted, DCPI revenue growth slowed in 1Q 2024 as deployments related to AI workloads simply need more time to materialize, and to a lesser extent, a difficult comparison to an unseasonably strong 1Q 2023,” said Lucas Beran, Research Director at Dell’Oro Group. “On a positive note, the pipeline for AI-related DCPI deployments continues to grow, as evidenced by vendor backlogs that have eclipsed levels seen during the 2022 supply chain constraints. Fulfillment of this demand is simply a matter of time.”
“Many factors are impacting the timing of this DCPI growth related to AI – Vendor manufacturing expansion, data center construction, and power availability all need to align. Furthermore, new data center designs to accommodate rack power densities 3 to 5 times higher than average, to incorporate liquid cooling, and to manage AI training load variability are all new challenges currently being addressed. As they are overcome, I expect growth to materialize in a very meaningful way,” continued Beran.
Additional highlights from the 1Q 2024 Data Center Physical Infrastructure Quarterly Report:
- Eaton, Modine, and Schneider Electric led all vendors in market share gains, while Vertiv lost share.
- Revenue growth was broad based, but North America slightly outpaced all other regions. The China DCPI market was the only region to decline, but is expected to return to growth next quarter.
- Hardware sales growth broadly slowed, with the exception of Facility Power Distribution, which was the only market segment to grow at a double-digit rate, due to increasing power distribution requirements of AI workloads. Thermal Management growth notably slowed as some colocation end-users are still deploying recently shipped equipment.
- Looking ahead, we forecast double-digit revenue growth for the 2024 DCPI market after a small upward revision. We expect this to be weighted towards the second half of the year as physical infrastructure deployments related to AI workloads begin to materialize.
About the Report
Dell’Oro Group’s Data Center Physical Infrastructure quarterly report provides a complete overview of the Data Center Physical Infrastructure market. This covers market sizes and forecasts for uninterruptible power supplies (UPS), thermal management, cabinet power distribution and busway, rack power distribution, IT racks and containment, and software and services. Allocation of manufacturing revenues by cloud service providers, telco, colocation, and enterprise customer segments is also provided. The report also shares insights into market trends, future outlook, and competitive landscape. For more information about the report, please contact us at [email protected].
About Dell’Oro Group
Dell’Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, security, enterprise networks and data center infrastructure markets. Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions. For more information, contact Dell’Oro Group at +1.650.622.9400 or visit www.delloro.com.
SOURCE Dell’Oro Group