RENO, NV, January 7, 2025 – The global data center market experienced a landmark year in 2024, fueled by the rapid expansion of generative AI and the continued dominance of cloud computing, according to new data from Synergy Research Group. Worldwide spending on data center hardware and software surged by an impressive 34% compared to 2023, reaching an all-time high and underscoring the transformative impact of artificial intelligence on the industry.
The surge was largely propelled by a remarkable 48% increase in investment in public cloud infrastructure, now constituting 55% of the total market share. While enterprise spending had shown sluggish growth in recent years, 2024 witnessed a significant resurgence, with a 21% increase in enterprise data center investments. For over a decade, the rise of public cloud services has been the primary catalyst for infrastructure investment, often at the expense of on-premises enterprise data centers. However, 2024 introduced a game-changing dynamic: generative AI. Both cloud providers and enterprises aggressively invested in GPUs to power burgeoning generative AI workloads, significantly boosting ai server sales and overall data center expenditure.
This AI-driven demand led to explosive growth for Nvidia. While much of Nvidia’s impact was reflected in increased revenues for its server and system vendor partners, the company’s direct sales to hyperscale cloud providers and enterprises catapulted Nvidia into the top tier of data center vendors. Other vendors experiencing notable growth included Inspur and Super Micro, alongside the sustained strength of Original Design Manufacturers (ODMs) catering to hyperscale clients.
Total data center infrastructure equipment revenues, encompassing both cloud and non-cloud sectors, are projected to reach $282 billion in 2024. Public cloud infrastructure alone accounts for a substantial $156 billion of this total. These figures are based on actual data from the first three quarters of 2024 and Synergy’s forecast for the final quarter. Hardware-centric segments, including servers, storage, and networking, collectively represent 85% of the data center infrastructure market. The remaining portion comprises operating systems, virtualization software, cloud management tools, and network security solutions.
Excluding ODMs, Dell Technologies leads in server and storage revenues, while Inspur stands out as a prominent leader in server sales to public cloud providers. Cisco dominates the networking segment, and Microsoft maintains a strong position due to its market share in server operating systems and virtualization applications. Nvidia’s growing influence is evident as a key supplier to both system vendors and service providers. Beyond these top players, other significant vendors in the market include HPE, Super Micro, Lenovo, VMware, Huawei, IBM, and Arista Networks.
“The introduction of GPUs and generative AI systems acted as a major catalyst in 2024, propelling the data center market to unprecedented growth levels. While the ongoing success of public cloud has been a significant driver for data center investments for many years, the scale of market growth in 2024, exceeding $280 billion, was unexpected,” stated John Dinsdale, Chief Analyst at Synergy Research Group. “The resurgence of growth in the enterprise segment is encouraging, although the long-term trend persists. A decade ago, public cloud providers accounted for only 20% of the market. This figure rose to 55% in 2024, and our forecasts indicate it will approach 65% within the next five years.”
About Synergy Research Group
Synergy Research Group provides quarterly market tracking and segmentation data for the IT and Cloud sectors, including vendor revenues segmented by market and region. Market share analysis and forecasts are delivered through Synergy’s online database, SIA ™, offering easy access to complex datasets. Synergy’s Competitive Matrix ™ and CustomView ™ services further enhance research capabilities, enabling clients to receive ongoing quantitative market research tailored to their specific market segment views.
Synergy Research Group supports marketing and strategic decision-makers worldwide with syndicated market research programs and bespoke consulting projects. For nearly two decades, Synergy has been a trusted provider of quantitative research and market intelligence.
For analyst inquiries or to obtain a Synergy report, please contact [email protected] or call 775-852-3330 extension 101.
