Virtualized and Nonvirtualized Physical Servers

Global Virtualized and Nonvirtualized Physical Servers Market to Reach US$99.5 Billion by 2030

The global market for Virtualized and Nonvirtualized Physical Servers estimated at US$74.3 Billion in the year 2024, is expected to reach US$99.5 Billion by 2030, growing at a CAGR of 5.0% over the analysis period 2024-2030. Virtualized Physical Server, one of the segments analyzed in the report, is expected to record a 5.9% CAGR and reach US$36.6 Billion by the end of the analysis period. Growth in the Non-Virtualized Physical Server segment is estimated at 4.5% CAGR over the analysis period.

The U.S. Market is Estimated at US$20.5 Billion While China is Forecast to Grow at 4.8% CAGR

The Virtualized and Nonvirtualized Physical Servers market in the U.S. is estimated at US$20.5 Billion in the year 2024. China, the world`s second largest economy, is forecast to reach a projected market size of US$15.7 Billion by the year 2030 trailing a CAGR of 4.8% over the analysis period 2024-2030. Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at a CAGR of 4.9% and 4.2% respectively over the analysis period. Within Europe, Germany is forecast to grow at approximately 4.7% CAGR.

Global Virtualized and Nonvirtualized Physical Servers Market - Key Trends & Drivers Summarized

How Is the Shift to Virtualized Servers Transforming IT Infrastructure?
The rapid evolution of enterprise computing is driving a major shift toward virtualized servers, allowing organizations to maximize resource utilization, reduce hardware dependencies, and enhance scalability. Virtualization enables multiple operating systems and applications to run on a single physical server, reducing energy consumption and lowering operational costs. Cloud computing and software-defined data centers (SDDCs) have further accelerated the adoption of virtualized server environments, as businesses seek more efficient and flexible computing solutions. However, despite these benefits, nonvirtualized physical servers remain crucial for workloads requiring high-performance computing, low latency, and security-sensitive applications, particularly in industries such as banking, defense, and healthcare.

Why Do Businesses Still Invest in Nonvirtualized Physical Servers?
While virtualization is gaining widespread adoption, many organizations continue to rely on nonvirtualized physical servers due to specific workload requirements. Applications involving high-frequency trading, real-time analytics, and mission-critical databases often demand dedicated hardware to ensure low-latency processing and security compliance. Additionally, regulatory constraints in industries like government and healthcare necessitate On-Premise Deployment, nonvirtualized environments to meet data sovereignty and security requirements. Legacy applications and enterprise resource planning (ERP) systems that are not optimized for virtualization also contribute to the continued demand for physical servers, particularly in traditional enterprise IT infrastructure.

What Are the Emerging Trends in the Server Market?
The growing emphasis on hybrid cloud architectures is influencing both virtualized and nonvirtualized server deployment strategies. Enterprises are increasingly adopting hyper-converged infrastructure (HCI) solutions that integrate compute, storage, and networking into a single platform, simplifying IT management. Edge computing is also driving demand for distributed server deployments, enabling real-time processing closer to data sources. Meanwhile, the increasing integration of AI and machine learning is pushing the need for specialized, high-performance physical servers to support intensive computational workloads. Additionally, server manufacturers are developing energy-efficient and modular hardware solutions to align with sustainability goals, reducing power consumption in large-scale data centers.

What Factors Drive the Growth of the Market?

The growth in the virtualized and nonvirtualized physical servers market is driven by several factors, including the increasing demand for hybrid cloud solutions, the need for high-performance computing in AI and data analytics, and stringent regulatory requirements for data security. The expansion of edge computing is pushing businesses to deploy a mix of virtualized and physical servers, ensuring optimal performance for real-time applications. The rise of software-defined infrastructure and hyper-converged systems is streamlining enterprise IT operations, increasing the adoption of virtualized environments. Meanwhile, industries with mission-critical workloads, such as finance, defense, and healthcare, continue to rely on nonvirtualized physical servers to maintain data integrity and processing efficiency.

SCOPE OF STUDY:

The report analyzes the Virtualized and Nonvirtualized Physical Servers market in terms of units by the following Segments, and Geographic Regions/Countries:

Segments:
Type (Virtualized Physical Server, Non-Virtualized Physical Server)

Geographic Regions/Countries:
World; United States; Canada; Japan; China; Europe (France; Germany; Italy; United Kingdom; and Rest of Europe); Asia-Pacific; Rest of World.

Select Competitors (Total 41 Featured) -

• Cisco Systems, Inc.
• Dell EMC
• Hewlett Packard Enterprise Development LP (HPE)
• IBM Corporation
• Lenovo Group Ltd.
• VMware, Inc.

TARIFF IMPACT FACTOR

Our new release incorporates impact of tariffs on geographical markets as we predict a shift in competitiveness of companies based on HQ country, manufacturing base, exports and imports (finished goods and OEM). This intricate and multifaceted market reality will impact competitors by artificially increasing the COGS, reducing profitability, reconfiguring supply chains, amongst other micro and macro market dynamics.

We are diligently following expert opinions of leading Chief Economists (14,949), Think Tanks (62), Trade & Industry bodies (171) worldwide, as they assess impact and address new market realities for their ecosystems. Experts and economists from every major country are tracked for their opinions on tariffs and how they will impact their countries.

We expect this chaos to play out over the next 2-3 months and a new world order is established with more clarity. We are tracking these developments on a real time basis.

As we release this report, U.S. Trade Representatives are pushing their counterparts in 183 countries for an early closure to bilateral tariff negotiations. Most of the major trading partners also have initiated trade agreements with other key trading nations, outside of those in the works with the United States. We are tracking such secondary fallouts as supply chains shift.

To our valued clients, we say, we have your back. We will present a simplified market reassessment by incorporating these changes!

APRIL 2025: NEGOTIATION PHASE

Our April release addresses the impact of tariffs on the overall global market and presents market adjustments by geography. Our trajectories are based on historic data and evolving market impacting factors.

JULY 2025 FINAL TARIFF RESET

Complimentary Update: Our clients will also receive a complimentary update in July after a final reset is announced between nations. The final updated version incorporates clearly defined Tariff Impact Analyses.

Reciprocal and Bilateral Trade & Tariff Impact Analyses:

USA
CHINA
MEXICO
CANADA
EU
JAPAN
INDIA
176 OTHER COUNTRIES.

Leading Economists - Our knowledge base tracks 14,949 economists including a select group of most influential Chief Economists of nations, think tanks, trade and industry bodies, big enterprises, and domain experts who are sharing views on the fallout of this unprecedented paradigm shift in the global econometric landscape. Most of our 16,491+ reports have incorporated this two-stage release schedule based on milestones.

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