Infrastructure plans and increased information and communication technology (ICT) spending spreads across all major business platforms and leads to increased growth in the world rack market. In addition, increased competition cuts prices to new lows and branded rack manufacturers gain market share with integrated products necessary for data centers.
The increased rack market benefits original manufacturers and forces them to refresh and integrate products within rack systems. This allows them to remain competitive and continue to participate with lower-level integration products.
New analysis from Frost & Sullivan (powersupplies.frost.com), World Rack and Rack Options Market, finds that the market earned revenues of over $2.42 billion with a growth rate of 12.3 percent in 2006.
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Key factors expect to aid in the growth of the rack and rack options market. These factors include the ongoing increase in capital expenditure for data centers across all business platforms, as well as the continued expansion and penetration of wireless services and data access in advanced and developing economies. Furthermore, as a number of regions across the globe fully recover from the economic downturn of 2001 and 2002, they encourage businesses and organizations across all platforms to implement network and infrastructure plans, while keeping in mind efficiency and effectiveness of all hardware and support systems.
“The implementation of network and infrastructure plans provide a strong foothold for all IT and telecom businesses and related industries, such as rack and rack options manufacturers, to grow,” notes Frost & Sullivan Research Analyst Eduardo LoboGuerrero. “Although rack mount equipment has become denser, faster and smaller in form factor, an increasing amount of racks are likely needed to accommodate new equipment.”
A key challenge for market participants is the improvement of consumer awareness and successful differentiation of their product offerings. This aside, the increased participation from branded rack suppliers confines and alters the market dynamic for original rack manufacturers. Therefore participants who are able to cope, deal and possibly do business with branded suppliers, enjoy more success in the market.
“As product integration becomes more important to end users, manufacturers that can understand and provide a varied and effective product offering are likely to capture more business and increase market participation,” says LoboGuerrero. “Consumer awareness plays a crucial role in capturing market share, as racks have been traditionally viewed as commodities and today’s racks integrate all major components of a modern data center.”
In order to gain market participation and presence, market participants should further differentiate their product offering, while still offering basic level racks. Equally, cost control is essential, as a number of competitors target the production of low-priced racks, despite increase in raw material prices over the past few years.
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