Global Data Center Rack Market to witness an Intense Price Competition between Local and Global Vendors

The data center rack market is likely to witness a change in the coming years. The market, which is a major place of interest for many major IT companies, offers lucrative opportunities to global as well as local vendors.

According to a research report by Beige Market Intelligence, the data center rack market will witness an intense price competition between local and global vendors during the period 2016–2022. This intensified price competition among vendors is considered as a major trend, which is expected to drive the data center rack market over the next five years.

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The report “Global Data Center Rack Market – Strategic Assessment and Forecast 2017 – 2022” states that the price war among data center rack market vendors is similar in every geography, except the US. According to the market research report, in the US the leading ten vendors are mostly the global players who have presence in other geographies. For instance, Eaton, BlackBox, Emerson Network Power, HP, IBM, Rittal, Schneider Electric, and Trip Lite dominate the market in the US due to their presence across geographies.

In the US, these players account for almost 80% of the market share, whereas local players account for 20% market share. One of the common trends for last ten years in the US market has been that buyers mostly prefer providers that offer both data center rack and servers. The presence of local vendors who are pureplay as rack providers has moderate presence.

However, the scenario is different in EMEA. In EMEA, the market is shared equally among global vendors and local vendors. Many cloud service providers and large telecom operators such as Telefonica, BT, EE, and Telenor are following the trend of selecting server vendors along with the rack vendors. Hence, they prefer single vendors. Several other data center owners prefer low-cost data center racks to minimize their initial investment. For instance, Eaton is a major provider for racks and servers for major data center owners in the Nordic region for operation of their social network sites in the European region.

The competition in APAC varies significantly. In APAC countries such as China, India, and Singapore, the local vendors account for almost 55–65% of the market share. Moreover, the price competition between local players and global players is intense.

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Many vendors are preferring to have standardized 41U and 48U racks and moderate price to compete with other global vendors as well as local vendors. Since 2015, the global vendors of 51U racks have been offering customized racks and have gained a significant momentum. For instance, Rittal has more than 20 customized 51U rack customers that are revamping their data centers by enhancing the height of data centers.

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