Market Trends of Israel Data Center Server Industry
Blade Servers To Grow At A Faster Pace In Coming Years
- Blade servers are often used for huge processing data, but they also produce a lot of heat. These tend to be more expensive than rack or tower servers and require proper humidity and cooling infrastructure to run efficiently without damaging the hardware.
- Blade servers are installed in server bays, not in racks. This structure allows more servers to be installed in a smaller area. For example, a rack may only hold 10 rack servers, but a blade bay can hold 20 blade servers. The blade chassis can still be rack mounted, but more blade servers can fit in the same space compared to rack servers.
- To cater to end-user needs, the top companies are focusing on blade servers in data centers. The growing adoption of technologies such as cloud computing, artificial intelligence (AI), and IT services by businesses is propelling the use of servers in data centers.
- By 2025, it is expected to be 5.2 million Israelis using e-commerce, up from around 4 million in 2023. Total e-commerce sales are anticipated to increase by 48.3% to USD 12 billion in 2025 from USD 7.1 billion in 2022 and USD 8.1 billion in 2023. Israel has become a key location for e-commerce businesses due to its comparatively high wages, low unemployment rate, and the preference of 73% of online consumers to purchase apparel, footwear, electronics, home appliances, and cosmetics with their disposable income.
- The segment's growing need for data center services is anticipated to be fueled by the soaring demand for online transactions over wireless devices such as smartphones, tablets, and laptops, thus increasing data traffic over these channels.
Understand The Key Trends Shaping This Market
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IT & Telecommunication Is The Largest Market In The Country
- Increasing focus on digital technology, cybersecurity, artificial intelligence, robotics, and healthcare IT in Israel is driving the market growth significantly. In addition, increasing demand for research and deployment of digital technologies and initiatives, increasing overall demand for digitization and scalable IT infrastructure, widespread adoption of 5G networks, and increasing penetration of high-tech giants will significantly drive the growth of the Information and Communications Technology (ICT) market.
- Government agencies are working with private IT and telecommunications service providers to expand the telecommunications sector. For example, the Israeli Ministry of Communications has developed preliminary plans to shut down 2G and 3G networks by the end of 2025.
- Moreover, increasing government investment to promote the development of multiple technologies such as 5G, AI, Internet of Things (IoT), machine learning, and big data is expected to drive the growth of the ICT market. For example, IBM acquired Databand.ai, an Israeli provider of data observation software. The acquisition will help the company extend its leadership position in observability across the full spectrum of IT capabilities across infrastructure, applications, data, and machine learning, expanding its hybrid cloud and AI capabilities and enhancing its capabilities.
- By the end of March 2022, Israel was among eight countries in the MENA region deploying commercial 5G. Industry-standard requirements for minimum delay rates drive the growth of the country's telecommunications industry. As 5G gains momentum for the general public, the demand for data center servers will increase.
