According to a new report from Dell’Oro Group, Data Center Physical Infrastructure (DCPI) market revenue growth accelerated in 4Q 2022, pushing full-year sales to 10 percent.
Dell’Oro Group’s 4Q 2022 Data Center Physical Infrastructure Quarterly Report provides a complete overview of the data center physical infrastructure market. The report covers market sizes and forecasts for products including 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.
Report highlights
According to Dell'Oro, Vertiv, Schneider Electric, and Eaton were the three vendors who gained the most revenue share in the segment for 4Q 2022.
Geographically, the analyst states that North America and Asia Pacific (excluding China) were the fastest-growing regions in 2022, at double-digit growth rates. The Caribbean and Latin American (CALA), Europe, the Middle East and Africa (EMEA) and China all grew at single-digit rates.
The analyst posits that product growth in the segment was broad-based, but rack power distribution and thermal management grew at the fastest rates to support increasing rack power densities.
Overall, Dell'Oro expects worldwide DCPI revenue growth to maintain 10 percent growth in 2023, with higher backlog supported growth in the first half of the year, before growth marginally slows in the second half.
ASP increases tweaked 2022 growth
In the new report, the market information analyst for the telecommunications, security, networks, and data center industries found that DCPI segment growth was primarily caused by average selling price (ASP) increases as vendors passed on higher costs of raw materials, components, and logistics.
Dell'Oro maintains that ASP growth is forecast to continue in 2023, but notes that easing supply chain constraints are expected to shift the primary growth driver to unit shipments.
Lucas Beran, Research Director at Dell’Oro Group, explains:
“We’ve entered 2023 in unprecedented territory for the DCPI market. On one hand, DCPI vendors ended 2022 with historically high backlogs and easing supply chain constraints. On the other hand, normalizing order cycles and macroeconomic uncertainty are affecting the market’s trajectory. That means that vendors’ decision making and market positioning over the past 18 months will materially impact their performance in 2023, with market share shifts likely."
Beran concludes:
"DCPI vendors Schneider Electric, who currently holds the number one market share position, and Vertiv, who has the number two market share position, are prime examples of this. Based on their 4Q 2022 earnings releases, Schneider Electric is forecasting its revenue growth to slow, while Vertiv is forecasting its growth to accelerate."
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