Data-center physical infrastructure (DCPI) sales jumped 18% year over year in Q1 2023 to $6.1 billion, according to Dell’Oro Group data reported by Data Center Knowledge on June 27, 2023. The increase reflected three forces arriving together: recovering supply chains and backlog shipments, vendors passing higher input costs to customers, and continued expansion or modernization of cloud, colocation and enterprise facilities.
That 2023 figure is historical. Later Dell’Oro updates show the market accelerating again, but the Q1 2026 total includes an expanded heat-rejection category, so its 28% growth rate is not a perfectly like-for-like comparison with earlier releases.
What the 2023 sales surge actually measured
The headline covered Dell’Oro’s DCPI market, which includes physical systems used to power, cool, distribute and house IT equipment. The market definition and category list are maintained by Dell’Oro Group.
For Q1 2023, Dell’Oro reported $6.1 billion in manufacturer revenue, up 18% from the same quarter a year earlier. At the time, it forecast full-year 2023 revenue of $26.7 billion, representing 12% growth. That annual number was a forecast, not a subsequently verified result in the cited report.
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Lucas Beran, Dell’Oro Group research director, summarized the supply situation to 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.”
Why data-center infrastructure sales grew
Backlogs began converting into shipments
Component shortages, logistics disruption and manufacturing constraints had left data-center projects waiting for equipment. As those constraints eased, vendors could ship orders that had already been booked. This creates a burst of recognized revenue without requiring every dollar to represent a brand-new project.
Higher costs were reflected in selling prices
Manufacturers passed portions of higher materials, components and freight costs to customers. Consequently, revenue growth measured in dollars included both more equipment shipped and higher prices per unit; it should not be read as an equivalent increase in physical equipment volume.
More capacity was still being built
Cloud and colocation operators continued adding capacity, while enterprises modernized facilities, consolidated space and adjusted rack layouts. Those projects require electrical distribution, UPS systems, cooling, racks and containment before servers can be installed.
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Which equipment categories led in Q1 2023?
Growth varied sharply by product group. Dell’Oro’s reported rates were:
| DCPI category | Q1 2023 year-over-year growth | What the result indicates |
|---|---|---|
| Thermal management | More than 30% | Cooling and heat-management investment was among the fastest-growing areas. |
| Cabinet power distribution and busway | More than 30% | Rack-level and overhead electrical distribution outpaced the market total. |
| Rack power distribution | 20% | Demand for rack PDUs and related distribution increased faster than overall revenue. |
| UPS | Mid-teens | Uninterruptible-power systems grew solidly but below thermal management and busway. |
| Software and services | Mid-teens | Associated management and service revenue tracked a similar pace to UPS. |
| IT racks and containment | 4% | Physical rack and containment growth was comparatively modest. |
The pattern matters: “data-center infrastructure” was not one uniform boom. Power distribution and cooling were the immediate leaders, while racks and containment expanded more slowly.
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What later results show
Dell’Oro’s subsequent releases indicate that demand did not end with the 2023 supply recovery. The periods and market definitions must be kept separate:
| Period | Reported manufacturer revenue | Year-over-year change | Qualification |
|---|---|---|---|
| Q1 2023 | $6.1 billion | 18% | Original headline reported by Data Center Knowledge; category scope was the 2023 DCPI definition. |
| Q4 2025 | $10.9 billion | Approximately 20% | Dell’Oro reported widening backlogs across power, cooling and distribution in its March 19, 2026 release. |
| Q1 2026 | $12 billion | 28% | The July 7, 2026 update added roughly $1 billion of newly covered heat-rejection activity, limiting direct comparability with earlier totals. |
What changed inside Q1 2026
Thermal management grew nearly 50% year over year, with direct liquid cooling (DLC) contributing to changes in facility architecture. Busbars grew in the low-thirties percentage range, UPS in the high-teens, and rack PDUs plus IT racks and containment in the high-teens.
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How AI changes the power-and-cooling equation
AI infrastructure is increasing the importance of high-density power delivery and heat removal. Direct liquid cooling is one response because it can move heat from dense accelerator systems more efficiently than relying only on room air. The resulting projects can require changes to rack design, manifolds, distribution, controls and facility cooling plants—not simply more conventional servers.
Alex Cordovil, Dell’Oro Group research director, described the market’s shift in the group’s August 2026 forecast announcement: “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.”
What Dell’Oro expects through 2030
Dell’Oro’s August 19, 2026 forecast projects DCPI manufacturer revenue to grow at a 22% compound annual growth rate from 2025 through 2030 and reach $120 billion in 2030. The projection is a forecast, not a guaranteed outcome. Dell’Oro identifies installed-capacity additions as the principal demand driver.
The forecast also identifies practical constraints that could slow delivery:
- Long lead times for electrical and cooling equipment
- Shortages of construction labor
- Grid-interconnection delays
- Community-consent and permitting challenges
These constraints mean that strong equipment orders do not automatically translate into energized capacity on the same schedule. A project can have financing and demand while still waiting for a transformer, a utility connection, skilled labor or local approval.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How to interpret DCPI growth figures correctly
- Check the period. Q1 2023, Q4 2025 and Q1 2026 are different quarterly observations, not substitutes for one annual trend.
- Check market scope. The Q1 2026 heat-rejection expansion added about $1 billion to the measured market, so its total should not be treated as entirely organic like-for-like growth.
- Separate revenue from physical volume. Price increases can lift revenue even when unit shipments grow more slowly.
- Keep product groups separate. Cooling, busway, UPS, rack PDUs, racks and services have different growth rates and bottlenecks.
- Distinguish results from forecasts. The $26.7 billion 2023 figure and $120 billion 2030 figure are forecasts made at different dates, not reported historical totals.
Frequently Asked Questions
Does the Q1 2026 28% increase prove that DCPI sales grew 28% on an unchanged basis?
No. Dell’Oro said the Q1 2026 measurement expanded Heat Rejection coverage by roughly $1 billion, so the reported total includes a market-definition change as well as underlying growth.
Which DCPI products grew fastest in Q1 2023?
Thermal management and cabinet power distribution/busway each grew more than 30% year over year. Rack power distribution grew 20%, while IT racks and containment grew 4%.
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Dell’Oro highlights equipment lead times, construction-labor availability, grid interconnection and community-consent or permitting delays as constraints on adding installed capacity.
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