Higher ASPs push data centre physical infrastructure market

Data Center Physical Infrastructure (DCPI) market revenue growth accelerated in 4Q 2022, pushing full-year sales to 10%, according to a new report. 

According to the Data Center Physical Infrastructure quarterly report by DellOro Group, a market research firm specialising in information about the telecommunications, security, networks, and data centre industries, growth was primarily caused by average selling price (ASP) increases as vendors passed on higher costs of raw materials, components, and logistics. 

ASP growth is forecast to continue in 2023, but easing supply chain constraints are expected to shift the primary growth driver to unit shipments.

DellOro Group's Data Center Physical Infrastructure quarterly report provides a complete overview of the data centre physical infrastructure market. It 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. 

Lucas Beran, Research Director at DellOro Group, says we have 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," he says. 

"On the other hand, normalising order cycles and macroeconomic uncertainty are affecting the markets trajectory."

Beran says 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. 

"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," he says. 

"Based on their 4Q 2022 earnings releases, Schneider Electric is forecasting its revenue growth to slow, while Vertiv is forecasting its growth to accelerate."

The 4Q 2022 Data Center Physical Infrastructure Quarterly Report found that Vertiv, Schneider Electric, and Eaton were the three vendors who gained the most revenue share in 4Q 2022. 

Meanwhile, 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. 

Product growth was broad-based, according to the report, but rack power distribution and thermal management grew at the fastest rates to support increasing rack power densities. 

Worldwide DCPI revenue growth is forecast to maintain 10% in 2023, with higher backlog supported growth in the first half of the year, before growth marginally slows in the second half.