Broad-Based Vendor Backlog Surge Signals Sustained Momentum Heading Into 2026
REDWOOD CITY, Calif. – March 19, 2026 – According to a new report by Dell’Oro Group, the trusted source for market information about the telecommunications, security, networks, and data center industries, the worldwide Data Center Physical Infrastructure (DCPI) market reached $10.9 billion in manufacturer revenue in 4Q 2025, growing approximately 20 percent year-over-year. The result caps a year of accelerating expansion and reinforces the structural durability of AI-fueled data center investment, with demand continuing to outpace supply across most infrastructure categories.
“What stands out in 4Q 2025 is not just the headline growth number—it’s the breadth of vendor backlogs building across power, cooling, and distribution segments simultaneously,” said Alex Cordovil, Research Director at Dell’Oro Group. “This synchronized backlog surge is a strong leading indicator for 2026, and our forecast reflects a modest upward revision to our outlook. The infrastructure race to support AI at scale shows no sign of slowing, and the competitive landscape is evolving rapidly as vendors invest to expand capacity and differentiate their offerings.”
Additional highlights from the 4Q 2025 Data Center Physical Infrastructure Quarterly Report:
- Direct Liquid Cooling (DLC) maintained exceptional growth, continuing its multi-year expansion trajectory as hyperscalers and colocation providers scale AI cluster deployments requiring liquid-cooled architectures.
- UPS system revenue sustained steady growth, with demand growth concentrated in high-capacity three-phase systems as operators configure larger cluster sizes and higher-density data halls for AI workloads.
- North America continued to lead global growth, propelled by hyperscalers investment and favorable policy frameworks supporting domestic AI infrastructure expansion. EMEA and Asia Pacific are expected to accelerate through 2026 as vendor pipelines mature.
- Hyperscalers and colocation providers remained the dominant demand engine, collectively accounting for the substantial majority of DCPI revenue growth, while enterprise and telco segments maintained more measured investment levels.
Dell’Oro Group’s Data Center Physical Infrastructure quarterly report provides a complete overview of the Data Center Physical Infrastructure market. This covers market sizes and forecasts for uninterruptible power supplies (UPS), thermal management, cabinet power distribution and busway, rack power distribution, IT racks and containment, and software and services. Allocation of manufacturing revenues by cloud service providers, telco, colocation, and enterprise customer segments is also provided. The report also shares insights into market trends, future outlook, and competitive landscape. For more information about the report, please contact us at dgsales@delloro.com.
Dell’Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, security, enterprise networks, and data center infrastructure markets. Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions. For more information, contact Dell’Oro Group at +1.650.622.9400 or visit www.delloro.com.
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