White Box Server Market

The white box server market was valued at USD 4.59 billion in 2015 and is expected to reach USD 14.43 billion by 2022, growing at a CAGR of 18.6% between 2016 and 2022. A white box server is a data center computer which is not manufactured by a well-known vendor. It can be found in large data centers run by giant Internet companies such as Google (U.S.) and Facebook Inc. (U.S.). White box servers are usually purchased in bulk quantities from original design manufacturers (ODMs). ODMs generally build their servers with commercial off-the-shelf (COTS) components that can be assembled in different ways or upgraded to provide the customer with a degree of system customization. The base year considered for study is 2015, and the forecast period is between 2016 and 2022.

Market Dynamics

Drivers

• Low cost and high degree of customization driving the white box server market
• Increasing adoption of white box servers among end users
• Growing number of data centers
• Rising adoption of Open Platforms such as Open Compute Project, Project Scorpio, and so on

Restraints

• ODMs' limited service and support capabilities and lack of channel partner skills affect the enterprise business

Opportunities

•  Increase in demand for microservers from data centers
•  Growing support for ARM processors in white box server market

Challenges

• OEMs entering into the custom server market

Low cost and high degree of customization drives the white box server market

White box servers cost less than the branded servers due to their usage of generally available components and absence of premium branding. The lower cost aids organizations use white box server systems to leverage equal or more computing power at a lower price than branded systems. Large-scale data centers, which are operated by large cloud service providers, benefit enormously from lower cost white box servers since they can purchase servers in bulks quantities. Servers from ODMs are being favored by hyperscale data center customers since they provide high degree of customization, along with the benefit of low cost. As white box servers are often assembled when ordered, each server can be put together from a large range of components from which a customer selects. A white box server offers a great amount of flexibility for configuration to meet the requirements of applications assembled to run the system. In contrast, big-name branded servers are available with only fixed or limited configurations

The following are the major objectives of the study.

• To define, describe, and forecast the global white box server market segmented on the basis of processor, business type, form factor, operating system, and geography
• To describe components of the white box server
• To forecast the market size, in terms of value, for various segments with regard to main regions, namely, the Americas, Europe, the Middle East and Africa (EMEA), and Asia-Pacific (APAC)
• To provide detailed information regarding the major factors influencing the growth of the white box server market (drivers, restraints, opportunities, and industry-specific challenges)
• To strategically analyze micromarkets1 with respect to the individual growth trends, future prospects, and contribution to the total market
• To provide an overview of the value chain in the white box server market and analyze market trends with the Porter’s five forces
• To strategically profile the key players and comprehensively analyze their market position in terms of ranking and core competencies2, along with detailing the competitive landscape for the market leaders
• To analyze the competitive developments such as joint ventures, collaborations, agreements, contracts, partnerships, mergers & acquisitions, new product launches & developments, and R&D in the white box server market

This report provides a detailed analysis of the white box server market based on form factor, business type, processor, operating system, and geography. Report forecasts the market size, in terms of value, and main regions: the Americas, Europe, the Middle East & Africa (EMEA), and Asia-Pacific (APAC). It strategically profiles the key players and comprehensively analyzes their market rankings and core competencies, along with the detailed competitive landscape for the market leaders.

The research methodology used to estimate and forecast the white box server market begins with capturing data on key vendor revenue through secondary research sources such as secondary literature, MTG Blog, factiva, and so on. The vendor offerings are also taken into consideration to determine the market segmentation. Top down and bottom-up procedures have been employed to arrive at the overall size of the global white box server market from the revenue of key players. After arriving at the overall market size, the total market has been split into several segments and subsegments which have been verified through the primary research by conducting extensive interviews of people holding key positions such as CEOs, VPs, directors, and executives. The market breakdown and data triangulation procedures have been employed to complete the overall market engineering process and arrive at the exact statistics for all segments and subsegments. The breakdown of the profiles of primaries is depicted in the below figure:

To know about the assumptions considered for the study, download the pdf brochure

The white box server ecosystem comprises material and component providers, ODMs, end users such as data centers and enterprise customers. The players involved in the white box server market include Quanta Computer Inc. (Taiwan), Wistron Corporation (Taiwan), Inventec Corporation (Taiwan), Hon Hai Precision Industry Company Ltd. (Taiwan), MiTAC Holdings Corp. (Taiwan), Celestica Inc. (Canada), Compal Electronics (Taiwan), Hyve Solutions (U.S.), Penguin Computing (U.S.), Servers Direct (U.S.), Stack Velocity Group (U.S.), Super Micro Computer Inc. (U.S.), Silicon Mechanics (U.S.), and ZT Systems (U.S.).

Major Market Developments

• In April 2016, Google Inc. (U.S.) and Rackspace Inc. (U.S.) designed a server based on IBM Corp.’s (U.S.) upcoming Power9 processor.
• In July 2016, Lenovo Group Ltd. (U.S.) established a joint venture agreement with LCFC (Hefei) Electronics Technology, Compal Electronics (Taiwan) is expected to start production for servers
• Microsoft Corporation (Azure) (U.S.) planned to build two data centers in the U.K. in 2016. Amazon Web Services, Inc. (U.S.) also planned to build data center in London
• In March 2016, Google Inc. (U.S.) contributed designs for its high-voltage server racks to the non-profit Open Compute Project Foundation, an effort to share designs for data-enter equipment that has changed the balance of power in the computer-hardware industry

Target Audience of the Report:

• Associations, organizations, forums, and alliances
• Raw material vendors
• Component providers
• Original design manufacturers
• Original equipment manufacturers
• Cloud service providers
• Operating system providers
• Processor manufacturers
• Research organizations

 “This study answers several questions for the stakeholders, primarily which market segments to focus on in the next two to five years for prioritizing efforts and investments.”

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Scope of the Report

:

This research report categorizes the global white box server market on the basis of form factor, business type, processor, operating system, and geography.

White Box Server Market, by Form Factor:

• Rack & tower servers
• Blade servers
• Density-optimized servers

White Box Server Market, by Business Type:

• Data centers
• Enterprise customers

White Box Server Market, by Processor:

• X86 servers
• Non-X86 servers

White Box Server Market, by Operating System:

• Linux
• Others (Windows, UNIX)

White Box Server Market, by Geography:

• Americas
• Europe, Middle East, and Africa (EMEA)
• Asia-Pacific (APAC)

Available Customizations:

With the given market data, MarketsandMarkets offers customizations according to the companies’ specific needs. The following customization options are available for the report:

Company Information:

• Detailed analysis and profiling of additional market players (up to five)

The white box server market is expected to reach USD 14.43 billion by 2022, at a CAGR of 18.6% between 2016 and 2022. The growth of this market is propelled by the factors such as low cost and high degree of customization, growing number of data centers, increasing adoption of white box servers among end users, growing number of data centers, rising adoption of open platforms such as Open Compute Project, Project Scorpio, and so on. Increase in the demand for micro servers from data centers, and growing support for ARM processors in the white box server market are some of the factors that would provide huge growth opportunities for the white box server market in the coming years.

White box servers are the servers which are directly sold by ODMs or EMS providers rather than OEMs. White box servers are usually purchased in bulk quantities from suppliers called as original design manufacturers (ODMs). ODMs usually build their servers with commercial off-the-shelf (COTS) components that can be assembled in slightly different ways or upgraded to deliver the customer with a degree of system customization.

White box server market has been segmented, on the basis of business type into data centers and enetrprise customers. Data center is expected to dominate the white box server market druing the forecast period. Hyperscale data center operators such as Google Inc. (U.S.), Microsoft Corp. (U.S.), Amazon Web Services, Inc. (U.S.), and Facebook Inc. (U.S.) prefer to build servers directly from ODMs rather than OEMs due to low-cost of manufacturing with the same quality provided by OEMs and a high degree of customization, which is fuelling the growth of the white box server market. Projects such as OCP, Project Scorpio, and OpenPOWER Foundation are motivating the giant players to build their own servers. Major clients for ODMs include Facebook Inc. (U.S.), Microsoft Corp. (U.S.), Rackspace Inc. (U.S.), Google Inc. (U.S.), Amazon Web Services, Inc. (U.S.), Alibaba Group Holding Ltd. (China), Baidu Inc. (China), Tecent Holdings Ltd. (China).

Different types of servers based on form factors include tower servers, rack servers, blade servers, and density-optimized servers.

Tower Servers:

Tower servers look most likely PCs. Each tower server is a standalone machine that is built into an upright case. In this type of tower servers, the data is stored in a single tower rather than being spread across various machines. It is relatively compact. One advantage of the tower server includes easier cooling because the overall component density is fairly low.  Tower servers are used mostly in smaller data centers. Its simplicity and robustness also mean that the tower server is considered to be an ideal for small companies. It does not require robust maintenance.

Rack Server:

Rack servers are servers that are mounted in a rack. The rack is of a uniform width and servers are mounted to the rack using screws. Each rack can accommodate multiple servers, and the servers are typically stacked on top of each other which makes cooling more difficult, while scaling is much easier. A rack server is designed to be positioned in a bay, which assists one to stack various devices on top of each other in a large tower. The bay would accommodate all of the hardware devices the company needs to function, including the server, storage devices, and security and network appliances.

Blade Servers:

A blade server is basically a stripped-down version of a standard rack-mounted server unit that contains just the bare essentials: a CPU, RAM, integrated I/O ports, and network adapters. Other components, such as power converters, cooling equipment, and storage are provided by the blade server chassis, which itself fits into a standard rack enclosure. This makes blade servers even thinner and also more expensive.

Density Optimized Servers

Modular and dense server form factors were originally introduced to address the data center floor space and power/cooling costs of hyperscale data centers. Density-optimized servers are addressing an increasing number of web and HPC workloads for customers that require a balance of OPEX (power, space) with overall system throughput.

Density-optimized servers are designed for large-scale data center environments with streamlined systems designs that focus on performance, energy efficiency, and density. These systems are typically deployed in fully assembled rack configurations. Its examples include e-commerce, cloud computing, online game hosting, social networking sites, dedicated hosting, Hadoop, and (high-performance computing (HPC). High-density are the servers favoured by cloud service providers and other hyperscale data center server buyers

Rack & tower servers are expected to grow at the fastest rate during the forecast period due to the increasing adoption of rack servers in both data centers and enterprise customers while tower servers in enterprise customers. The market for non-X86 servers expected to grow at the fastest rate during forecast period due to more power-efficient feature; ARM processors are being preferred by data center operators and an ARM server is getting much support in the server market. The market for Linux servers expected to grow at a significant rate in coming years. More stability, scalability, cost efficiency offer greater adoption of Linux servers among end users.

APAC is expected to be the fastest-growing market for the white box servers during the forecast period due to the increasing presence of cloud service providers in APAC. There are number of reasons behind the growth of Asia-Pacific data center industry such as increasing number of internet users, increasing need for an infrastructure refresh in older data centers, growing role of data sovereignty as data privacy laws mature in Southeast Asia. Hong Kong and Singapore, being strategic locations for the white box server market, presence of giant players such as Alibaba Group Holding Ltd. (China), Tecent Holdings Ltd. (China), Baidu Inc. (China) which play an important role in the white box server market. Also, players such as Facebook Inc. (U.S), Microsoft Corp. (U.S.), Amazon Web Services Inc. (U.S.), and Google Inc. (U.S.), among many others are increasing their presence in the APAC market. Moreover, many cloud service providers inclined toward the adoption of white box servers over branded servers. Large enterprises in APAC also expected to adopt white box servers in the coming years.

Critical questions the report answers:

• Where will all these developments take the industry in the mid to long term?
• What are the growth opportunities in white box server market?

ODMs' limited service and support capabilities and lack of channel partner engagement affect enterprise business restraining the growth of the market. Currently, ODMs have maximum contribution to the hyperscale data center segment which constitutes giant data center operators such as Google Inc. (U.S.), Facebook Inc. (U.S.), Microsoft Corp. (U.S.) Amazon Web Services, Inc. (U.S.), Baidu Inc., (China), Alibaba Group Holding Ltd. (China), and Tencent Holdings Ltd. (China) among others. ODMs still don’t have any hold on to enterprise customers; this is mainly due limited service and support capabilities of ODMs. OEMs offer better maintenance or after-sales services than ODMs. Top server vendors (OEMs), such as Hewlett-Packard Co. (U.S.) and IBM Corp. (U.S.), have built their businesses around making advanced support technicians available all time.

The major players in the white box server market include Quanta Computer Inc. (Taiwan), Wistron Corporation (Taiwan), Inventec Corporation (Taiwan), Hon Hai Precision Industry Company Ltd. (Taiwan), MiTAC Holdings Corp. (Taiwan), Celestica Inc. (Canada), Compal Electronics (Taiwan), Hyve Solutions (U.S.), Penguin Computing (U.S.), Servers Direct (U.S.), Stack Velocity Group (U.S.), Super Micro Computer Inc. (U.S.), Silicon Mechanics (U.S.), ZT Systems (U.S.), and so on.

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