The Global Data Center Accelerator Market was valued at USD 6.59 billion in 2020, and it is expected to reach a value of USD 14.75 billion by 2026, registering a CAGR of 14.98% over the forecast period 2021-2026.
The COVID-19 pandemic has posed additional stress on the overall economy across sectors. It has also shifted focus towards a digital economy. Alibaba Cloud, China’s top cloud computing provider, is investing billions in building next-generation data centers to support digital transformation needs in a “post-pandemic world. In April 2020, Alibaba Cloud announced that over the next three years, it would invest RMB 200 billion in core technologies and future-oriented data centers.
- From scientific discoveries to artificial intelligence (AI), modern data centers are crucial to solving some of the world’s most critical challenges. These advanced data centers are transforming to increase networking bandwidth and optimize workloads like artificial intelligence. Datacenter administrators also expect the lower total cost of ownership, lower power, and new services. - Accelerators enable customers to meet these demands. They are designed to solve customer problems, high-performance, and hardware-based acceleration with excellent cost and power efficiency. For instance, the NVIDIA Volta recently accelerated its computing platform, giving these modern data centers the power to accelerate machine learning, deep learning, and high-performance computing workloads. - As businesses are increasingly applying artificial intelligence (AI) technologies to differentiate and advance their processes and offerings, enterprises are implementing machine learning applications, such as image and voice recognition, CPUs, and GPUs. They are being relied on more for faster training real-time inference. This is because these advanced processors can work for the increased network bandwidths created by the AI and ML workloads. - From machine learning inference, video transcoding, and data analytics to computational storage, electronic trading, and financial risk modeling, enterprises are actively looking for programmability, flexibility, and high throughput and low latency performance advantages to any server deployment. - The ever-increasing demands on the data center are pushing existing infrastructure to its limit, driving the need for adaptable solutions that can optimize performance across a broad range of workloads and extend the lifecycle of existing infrastructure, ultimately reducing TCO. To capture this demand and gain market recognition, players have been actively focusing on expanding their product portfolio. - The growing need for data centers and cloud resources from both the consumer service and business perspective has led to the development of large-scale public cloud data centers called hyperscale data centers. According to Cisco, hyperscale data centers are expected to increase by more than 60% by 2021, compared to 2016.
Key Market Trends FPGA to Drive the Market Growth
- FPGAs (Field programmable gate arrays) are pre-fabricated silicon devices that can be programmed electrically (post-manufacturing) to become almost any kind of digital system. They are an array of configurable logic blocks (CLBs) connected with programmable interconnects and can be reprogrammed to the desired application requirements after manufacturing. - The adoption of FPGA chips across all industries is driven by the fact that they combine the best parts of processor-based systems and application-specific integrated circuits (ASICs). In addition to this, for low-to-medium volume productions, FPGAs provide cheaper solutions and faster time to market than ASIC, which normally requires a lot of resources, in terms of time and capital, to obtain the first device. - FPGA in accelerators increase real-time inference throughput versus high-end CPUs, and reduce latency versus GPUs, providing significant merit when running real-time inference applications. Owing to this, FPGA is anticipated to become a significant area of investment by several players. - In March 2020, Xilinx, Inc. launched the SmartNIC platform delivering true convergence of network, storage and compute acceleration functions on a single device. The Alveo U25 SmartNIC is designed to bring the greater efficiency and lower TCO benefits of SmartNICs to cloud service providers, telcos, and private cloud data center operators struggling with increasing networking demands and rising costs. The U25 combines a highly optimized SmartNIC platform with a powerful and flexible FPGA-based engine that supports full programmability and turnkey accelerated applications.
North America to Hold Maximum Market Share
- The United States currently has the highest number of data centers globally and is witnessing robust growth in terms of volume of big data and traffic due to the increase in the number of hyperscale data centers. According to Cisco Systems, the volume of big data in data center storage worldwide is expected to reach 403 exabytes by 2021, of which a considerable share will be accounted for by the US. - The overall GDP of the United States is over USD 18 trillion, in which the digital economy contributes over 7.1% to it. By the end of 2018, this digital economy included over 345.66 million internet users in the country. Also, the data center industry in the country is significantly growing due to the rapidly increasing IT and Telecommunication industry. According to the Cloudscene, the country consists of more than 2,400 data centers, as of September 2019. - In the United States, the US Army Engineering and Support Center, Huntsville Information Technology Services High-Performance Computing (HPC) program supports the HPC Modernization Program (HPCMP) of the US Department of Defense (DOD) through procurement of various HPC systems (supercomputers), with over 5 PetaFLOPS of computing capability and over 50 PetaBytes of mass storage archives. - The HPCMP program accelerates the development and transition of advanced defense technologies into superior war-fighting capabilities, by exploiting and strengthening the United States leadership in supercomputing, communications, and computational modeling. - Besides, the region also accounts for the majority of the world’s hyperscale data centers, mainly owing to the propelling HPC industry in the United States. Due to this, the majority of the supplies from Cisco, IBM, NVIDIA, Intel cater to the US demand. - Moreover, Canada is continuously growing and providing more data center infrastructure solutions. This is due to an increase in the demand for efficient data centers, initiatives for ecological data center solutions, and substantial growth of power density across the region.
Competitive Landscape The data center accelerator market is fragmented, due to the presence of several global market players across the globe. Players adopt various strategies such as new product launches, expansions, acquisitions to increase their market share. Moreover, the companies operating in this market invest huge amounts in research and development, which is helping them bring about more innovations in the products offered.
- October 2020 - Intel Corporation introduced Intel Xeon Scalable Platform to help secure sensitive workloads. It comes along with new features that include Intel Total Memory Encryption (Intel TME), Intel Platform Firmware Resilience (Intel PFR), and new cryptographic accelerators to strengthen the platform and improve the overall confidentiality and integrity of data.
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