“As I predicted, DCPI revenue growth slowed in 1Q 2024 as deployments related to AI workloads simply need more time to materialize, and to a lesser extent, a difficult comparison to an unseasonably strong 1Q 2023,” said Lucas Beran, Research Director at Dell’Oro Group. “On a positive note, the pipeline for AI-related DCPI deployments continues to grow, as evidenced by vendor backlogs that have eclipsed levels seen during the 2022 supply chain constraints. Fulfillment of this demand is simply a matter of time.
“Many factors are impacting the timing of this DCPI growth related to AI – Vendor manufacturing expansion, data center construction, and power availability all need to align. Furthermore, new data center designs to accommodate rack power densities 3 to 5 times higher than average, to incorporate liquid cooling, and to manage AI training load variability are all new challenges currently being addressed. As they are overcome, I expect growth to materialize in a very meaningful way,” continued Beran.
Additional highlights from the 1Q 2024 Data Center Physical Infrastructure Quarterly Report:
Eaton, Modine, and Schneider Electric led all vendors in market share gains, while Vertiv lost share.
Revenue growth was broad based, but North America slightly outpaced all other regions. The China DCPI market was the only region to decline, but is expected to return to growth next quarter.
Hardware sales growth broadly slowed, with the exception of Facility Power Distribution, which was the only market segment to grow at a double-digit rate, due to increasing power distribution requirements of AI workloads. Thermal Management growth notably slowed as some colocation end-users are still deploying recently shipped equipment.
Looking ahead, we forecast double-digit revenue growth for the 2024 DCPI market after a small upward revision. We expect this to be weighted towards the second half of the year as physical infrastructure deployments related to AI workloads begin to materialize.
