Data Center Rack Market to Reach US$7 Billion by 2028

Future of Data Center Rack market: Growth drivers, market restraints and recent developments
Data Center Rack Market to Reach US$7 Billion by 2028

Data Center Rack Market Prediction: The Data Center Rack market is expected to reach US$27.10 billion by 2028 from US$10.13 billion in 2023, with a CAGR of 21.75%. With the advent of high-performance computing, artificial intelligence, and cloud services, the demand for efficient and scalable data center infrastructure has surged. Recent developments, such as LightEdge's expansion into Minneapolis with a state-of-the-art data center and ZutaCore's innovative HyperCool liquid cooling system, highlight the industry's focus on enhancing rack density and thermal management.

Additionally, initiatives like the ARPA-E COOLERCHIPS program, involving leading institutions such as the National Renewable Energy Laboratory (NREL), are set to redefine cooling technologies, further propelling market growth. This article delves into the current trends, technological advancements, and future predictions shaping the data center rack market. 

Factors driving the Data Center Rack market growth

The market is experiencing growth driven by multiple factors. Investments in data centers and hyperscale facilities are surging, while the rapid adoption of cloud computing and the rollout of 5G technology amplify the need for expanded infrastructure. Additionally, the rise of modular and edge data centers, along with the trend toward larger racks, further fuels this expansion.

There is a surge in capital inflow from private equity firms, infrastructure funds, sovereign wealth, and other organizations into the data center ecosystem, fueling the expansion of data center infrastructure. Businesses and organizations are widely adopting cloud computing services, driving the need for more data center capacity and racks to house servers and networking equipment.

The rapid deployment of 5G networks enables faster data transmission speeds and lower latency, leading to the proliferation of data-intensive applications such as high-definition video streaming, augmented reality (AR), virtual reality (VR), and Internet of Things (IoT) devices. This surge in data traffic necessitates the expansion of data center infrastructure, increasing the demand for data racks.

The preference for modular data centers, which are cost-effective, flexible, and scalable, is driving the data center rack market as these racks are easy to install and maintain. Moreover, there is a growing trend of procuring racks that are taller, deeper, and wider to accommodate more servers and equipment, leading to higher demand for data center racks. The increased deployment of edge data centers, which are smaller and located closer to end-users, is also contributing to the growth of the data center rack market.

Market restraints that may hinder the growth

Despite the growth potential, the data center rack market faces several challenges. High costs associated with cooling and rising rack density, limited power supply in certain regions, and lack of common standards hinder expansion. Additionally, virtualization trends, high capital investments, and global supply chain disruptions pose significant obstacles.

As rack density increases, the need for more powerful and expensive cooling equipment also rises, adding to the overall costs. Moreover, data centers require a reliable and sufficient power supply to operate, but in some regions, the power infrastructure may be inadequate or unreliable, limiting the growth of the data center rack market.

The absence of universal standards for data center racks can lead to interoperability problems between different vendors' products, making it difficult for customers to mix and match components. The increasing adoption of virtualization, blade servers, and server consolidation can also reduce the need for individual physical servers and racks, potentially restraining the growth of the data center rack market.

Implementing a data center rack solution requires significant upfront capital investments, which may deter some organizations, especially small and medium-sized businesses, from adopting these solutions. Additionally, ongoing global supply chain issues and geopolitical tensions may lead to delays in the delivery of data center rack components and equipment, hampering market growth.

Recent Developments in the Data Center Rack Market

Recent developments in the data center rack market highlight an increasing demand for high-density deployments and robust infrastructure to support emerging technologies like AI. LightEdge's acquisition of a 76,000-square-foot data center in Minneapolis reflects this trend, offering 50+ KW racks and scalable solutions to meet enterprise needs. The facility's comprehensive certifications and strategic location, combined with Minnesota’s tax incentives, underscore a shift towards more secure, efficient, and cost-effective data center operations. This move by LightEdge also indicates a broader industry focus on expanding capacity and enhancing cloud service offerings to support digital transformation initiatives.

Recent advancements in the data center rack market are also marked by ZutaCore's launch of the HyperCool liquid cooling system, capable of efficiently cooling Nvidia's forthcoming GB200 Grace Blackwell superchip. This system eliminates the need for modifications to data centers or racks, addressing the high power draw of over 1kW that challenges traditional air cooling. HyperCool utilizes dielectric cold plates to manage 120kW of rack power, providing a waterless, direct-to-chip cooling solution that reduces the total cost of ownership and CO2 emissions.

Additionally, the National Renewable Energy Laboratory (NREL) is part of a $40 million ARPA-E COOLERCHIPS program aimed at enhancing data center cooling efficiency. NREL's involvement includes leading projects to develop cutting-edge cooling solutions, such as hybrid mechanical-capillary loops and innovative software for designing next-gen data centers. These efforts are set to improve thermal management at the component, rack, and full data center levels, reducing energy consumption and carbon footprint while supporting the growing demand for high-performance computing.

Notable Partnerships in the Data Center Rack Market

The data center rack market has seen notable partnerships, exemplified by Leviton's recent acquisition of PRISM Data Centre Solutions (DCS) Limited. This UK-based company specializes in the consultation, design, manufacture, and installation of 19’’ cabinets for communications networks and data centers. The acquisition enables Leviton to expand its offerings to include network racks and server cabinets, enhancing its comprehensive copper and fiber structured cabling systems. This strategic move aligns with Leviton's ambition to grow its Network Solutions business and strengthen its presence across the EMEA region and beyond.


As the data center rack market continues to evolve, driven by the demands of high-performance computing and the need for sustainable and efficient cooling solutions, stakeholders are poised to witness significant advancements. The integration of innovative cooling technologies, such as ZutaCore's HyperCool system and the ARPA-E COOLERCHIPS projects, underscores the industry's commitment to reducing energy consumption and operational costs while enhancing performance.

LightEdge's strategic investments and expansions further illustrate the market's dynamic growth and the importance of robust infrastructure. Looking ahead, the future of data center rack market is expected to see continued innovation and expansion, meeting the ever-growing demands of the digital age and contributing to a more sustainable and efficient technological landscape.


What is the market demand for data centers?

The market demand for data centers is robust, with significant growth projected, driven by factors like the surge in data generation, digitization of business, and the need for data storage and analysis, leading to increased demand for data center, cloud, and colocation services.

What is a rack in a data center?

A rack in a data center is a standardized metal frame designed to house and organize various IT equipment, such as servers, switches, and routers, optimizing space and ensuring efficient cable management and airflow.

What is the biggest problem for data center racks?

The biggest problem for data center racks is managing the increasing power density and heat generation as rack densities continue to rise, requiring specialized cooling solutions and infrastructure upgrades to maintain optimal operating temperatures.

Are data centres the future?

Yes, data centers are the future as they are essential for storing, processing, and managing the exponential growth of data generated by emerging technologies like AI, IoT, and 5G.

What is rack vs cage data center?

A data center rack is a standardized metal frame used to organize and house IT equipment like servers and switches, while a data center cage is a secure, enclosed area within a data center that contains one or more racks and offers an extra layer of security and isolation.

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