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Healthy datacenter market bucks tough economic outlook

Datacenter operators appear to be investing for growth. The global datacenter infrastructure market saw healthy growth in Q2 of this year, despite widespread economic uncertainty. This is one of the key findings of a recently published report from Dell’Oro Group.

 

Revenues in the sector grew 9 percent year-over-year in 2Q 2022, driven by average selling price increases and marginal improvement in unit shipments. Supply chain constraints are expected to linger into 2023 but minor improvements are forecast to lead to increasing unit shipments, alongside continued price realization in the final half of 2022. These factors have led the 2022 full-year outlook for datacenter physical infrastructure to be raised by nearly 2 percent year-over-year.

 

“The infrastructure market remained resilient in the quarter, despite Russia’s invasion of Ukraine and COVID-related lockdowns in China resulting in global macroeconomic uncertainty,” said Lucas Beran, Principal Analyst at Dell’Oro Group. “Furthermore, the global trends of electrification and digitalization, inherently linked to sustainability, are solidifying themselves as major market drivers, both in the short and long term. Historically high vendor backlogs provide the market with a strong runway into 2023. However, growing macroeconomic uncertainty and waning price realization are expected to moderate growth in 2023, particularly in the enterprise market segment.”

 

Additional highlights from report:

  • Eaton, Cyberpower, Huawei, and Schneider Electric gained revenue share in 2Q 2022.
  • North America and Asia Pacific (excluding China) were the fastest growing regions, at double-digit growth rates, in 2Q 2022. China was the only region to decline Y/Y, due to COVID-related lockdowns.
  • Product growth was broad-based, with shorter sale cycle products such as single-phase UPS and rPDU growing at double-digit rates, while longer sale cycle products such as three-phase UPS and cabinet power distribution grew at slightly lower rates.
  • Worldwide revenue growth is forecast above 10 percent in 2022, driven by double-digit cloud and colocation service provider growth and mid-single-digit enterprise growth.

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