Tommy Lee Walker - stock.adobe.cNewsGenAI demand fuels record sales of datacentre hardware and software in 2024Figures from Synergy Research Group highlight how demand for generative AI and GPU technology has generated record amounts of spending in the datacentre hardware and software space during 2024ByCaroline Donnelly,Senior Editor, UKPublished: 08 Jan 2025 12:00 Demand for generative artificial intelligence (AI) services is being cited as the reason why spending on datacentre hardware and software hit a record high in 2024.According to figures from IT analyst Synergy Research Group, total spending in the datacentre hardware and software market was up 34% year-on-year during 2024, as a result of hyperscale providers and private enterprises looking to kit out AI-ready server farms.John Dinsdale, chief analyst at Synergy Research Group, said this trend had led to more investment in graphics processing units (GPU), which had in turn lit a fire under a market that was already chugging along nicely.As a result, the datacentre hardware and software market enjoyed record growth rates in 2024, with total sales in excess of $280bn, which he described as unprecedented results.While the ongoing success of public cloud has been the main driving force behind datacentre investments for well over a decade now, no one imagined a 2024 market for datacentre gear reaching over $280bn, said Dinsdale.These figures are based on actual sales data from the first three quarters of 2024, combined with Synergys own fourth quarter forecast data for the datacentre hardware and software market.The Synergy data shows that sales of datacentre kit to public cloud providers were up 50% in 2024, while the amount of spend attributed to enterprises was also up 21% year-on-year. In recent years, growth in the enterprise sector has been rather anaemic, [and] for over 10 years now, cloud providers have increasingly driven the market for datacentre gear and Synergys five-year forecast shows there will be no letup in this trend, said Dinsdale.Read more about datacentres and generative AIAt AWS Re:Invent 2024, CEO Matt Garman shared details of how its GenAI technologies are helping enterprises accelerate the pace of Microsoft and VMware datacentre migrations.Jensen Huang used the companys fourth-quarter earnings to discuss the massive growth in accelerated datacentre computing experienced by Nvidia.Public cloud providers now account for more than half of the spend (55%) in the datacentre hardware and software market, Dinsdale continued, up from 20% 10 years ago. Our forecast shows it reaching almost 65% five years from now, he added.Around 85% of the spend in this market is generated by the sale of servers, storage and networking kit, confirmed Synergy, while the remaining 15% comes from sales of cloud management, security and virtualisation software.One notable trend, called out by Synergy, is how prominently Nvidia now features among the roll-call of datacentre hardware providers, thanks in no small part to the fact its GPU technology is being sold directly to both hyperscalers and enterprises.Excluding original design manufacturers, Dell is the overall leader in the server and storage segment, with Inspur being a clear leader in server sales to public cloud providers, said Synergy, in its research note.Cisco is the leader in the networking segment, while Microsoft features prominently in the rankings due to its position in server operating systems and virtualisation applications. Nvidia now features heavily as a supplier both to other system vendors and directly to service providers.In The Current Issue:What do the home secretarys policing reforms mean for the future of the Police Digital Service?What are the security risks of bring your own AI?Download Current IssueData engineering - Camunda: Defining data orchestration's role in data engineering CW Developer NetworkSAP customer unrest: How did we get here? Write side up - by Freeform DynamicsView All Blogs