Data center physical infrastructure (DCPI) revenue grew 18% year over year to $6.1 billion in Q1 2023, according to Dell’Oro Group figures reported by Data Center Knowledge. That historical surge reflected three forces working together: supply chains recovering enough to clear backlogs, vendors passing higher costs to customers, and continued investment in data center capacity.
What the Q1 2023 figures showed
The 18% increase was a year-over-year comparison for the first quarter of 2023, not a current growth rate. At the time, Dell’Oro also forecast that full-year 2023 DCPI revenue would rise 12% to $26.7 billion. That was a forecast published in 2023, not a verified result. The original report is available from Data Center Knowledge.
Cooling and power distribution led the quarter
Growth varied substantially by equipment category. Thermal management and cabinet power distribution, including busway, each grew by more than 30% year over year in Q1 2023. Rack power distribution grew 20%; UPS and software and services were in the mid-teens. IT racks and containment grew 4%.
In that report’s market-share ranking, Schneider Electric was the leader, with Vertiv gaining ground and Eaton, Huawei, and Legrand completing the top five. This describes the ranking reported for that period, not the current vendor order.
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Why sales rose
Supply recovery released pent-up shipments
Supply-chain constraints had limited vendors’ ability to manufacture and ship equipment. As conditions eased, vendors could work through backlogs and deliver more orders. Dell’Oro research director Lucas Beran told Data Center Knowledge: “Easing supply chain constraints are enabling DCPI vendors to manufacture and ship more products, and lead times are starting to come down,”
Higher costs showed up in customer spending
The 2023 report also attributed part of the revenue increase to vendors passing along higher materials, component, and logistics costs. Revenue growth therefore did not necessarily mean equipment volumes rose by the same percentage: higher prices can lift sales totals even when unit shipments grow more slowly.
Data center expansion sustained demand
Cloud and colocation providers were adding capacity, while enterprises continued modernization and right-sizing projects. Those investments require more than servers: facilities need electrical distribution, backup power, cooling, racks, and related systems to support growing workloads.
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How the market has developed since 2023
Later Dell’Oro updates show continued DCPI growth, though the reported figures cover different periods and Q1 2026 includes a material market-definition change.
| Period | Reported manufacturer revenue | Year-over-year change | Important context |
|---|---|---|---|
| Q4 2025 | $10.9 billion | Approximately 20% | Dell’Oro described widening backlogs across power, cooling, and distribution. Dell’Oro Group, March 19, 2026 |
| Q1 2026 | $12 billion | 28% | The total includes expanded Heat Rejection coverage, adding roughly $1 billion to the measured market. Dell’Oro Group, July 7, 2026 |
The Q1 2026 total should not be read as a directly comparable like-for-like jump from earlier releases: the broader Heat Rejection coverage changed what was counted. Dell’Oro’s DCPI market definition is relevant when comparing category totals across reports.
Cooling remained a standout category
In Q1 2026, Dell’Oro reported nearly 50% year-over-year growth in thermal management, with direct liquid cooling contributing to a shift in data center design. Busbars grew in the low-thirties percent range, UPS at a high-teens pace, and rack PDUs and IT racks/containment at high-teens rates.
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Service providers drove demand
Service providers accounted for a record share of manufacturer revenue in Q1 2026. The group included hyperscalers, neoclouds, colocation firms, and other developers; North America represented more than half of revenue. Those observations describe Dell’Oro’s Q1 2026 findings, not a universal breakdown for every region or customer segment.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What the 2030 forecast means—and what could limit it
Dell’Oro’s August 2026 forecast projects DCPI manufacturer revenue to grow at a 22% compound annual growth rate from 2025 to 2030 and reach $120 billion in 2030. This is a forecast, not a reported outcome. Dell’Oro identifies installed-capacity additions as the main growth driver. Research director Alex Cordovil said: “The AI buildout has moved past the point where it can be treated as a surge. It is now the baseline against which the rest of the market is measured.”
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Quick Recap
Source: Dell’Oro Group, August 19, 2026.
How to interpret the headline numbers
- Check the period: Q1 2023’s 18% growth is a historical quarterly comparison, while the 2030 figure is a forecast.
- Check what is counted: category scope changed by Q1 2026 with expanded Heat Rejection coverage.
- Separate revenue from volume: higher prices and changes in measured coverage can raise reported revenue without an equivalent increase in physical shipments.
- Look at the product mix: cooling and power distribution have grown faster than some rack and containment categories in the cited periods.
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