The global server market’s revenue is expected to grow 17 percent (on year) to reach $111.7 billion in 2022, according to a new report.

From an enterprise perspective, transformation to hybrid cloud and upgrades of existing infrastructure to handle increased workloads will provide growth impetus after a pause during the COVID-19 pandemic, says Counterpoint Research’s ‘Global Server Sales Tracker’.

5G, automotive, cloud gaming, and high-performance computing will remain the key drivers for cloud service providers in data center expansion.

“In an inflationary but extremely dynamic environment, companies are looking to strengthen their infrastructure as they prepare for Web3.0 demands from the infrastructure end,” said research analyst Akshara Bassi.

“Companies are diversifying their IT infrastructure to meet the needs of data evolution and making customers cloud-ready,” Bassi.

The market is evolving with the introduction of “As-a-Service” and “pay per use” models by server companies, like Pointnext from HPE, APEX from Dell, and TruScale from Lenovo.

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The business model pivot has been enjoying great success due to more flexibility given to the customer at minimum capital expenses due to the emergence of workload-based infrastructure.

The server market revenues were flat in 2020 and early 2021 owing to the pandemic and less spending by enterprises on IT infrastructure upgrades and expansion.

In H2 2021, there was a backlog due to supply chain disruptions across the whole value chain from accelerator chips to power ICs, which has trickled into H1 2022, the report mentioned.

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“Dell and HPE are the server market icons but are seeing companies like Lenovo, Inspur and Supermicro giving strong competition as demand for flexible customized configurations in bare metal option continues to rise,” said Bassi.

Edge server configurations will be a key driver of growth in server shipments as companies start enabling chip-to-cloud features within the devices and 5G deployments make IoT use cases penetrate across all verticals.

The infrastructure spends to enable the Metaverse will give an impetus to servers as they are the building blocks of the Metaverse, the report noted.

Major internet corporations and hyperscalers have already detailed their plans for spending on Metaverse infrastructure.