Global Statistics Representing Data Center Cooling Market Scenario
This can mainly be attributed to the increasing adoption of mobile devices, cloud computing, and internet of things, among others, which have significantly transformed application building, deployment, and utilization processes. Most current IT models are failing to maintain such big packaged applications, which is propelling the need for infrastructural transformation and subsequently, driving the adoption of data centers.
The global data center cooling market was valued at USD 9.59 billion in 2017 and is expected to grow at a CAGR of 10.70% during the forecast period, 2019–2026.
The increasing number of data centers on account of the rising demand for cloud-based services is expected to drive the global data center cooling market growth during the forecast period, 2019–2026. For instance, spending on cloud computing has grown at a rate of 4.5 times the rate of IT spending since 2009 and is estimated to grow at better than 6 times the rate of IT spending from 2015 through 2020 (Source: Forbes). The below figure represents the growth of the public cloud computing market from 2008 to 2020.
This linear growth in cloud technology accelerates the demand for data centers, ultimately fueling the need for effective cooling solutions.
Certain strategies adopted by companies in order to stay ahead in cloud computing technology are further expected to fuel market growth. For instance, in October 2018, OVH, a French cloud computing-based company announced plans increase investments in cloud computing technology with an aim to take on U.S. internet giants such as Amazon, Google, and others. The company is expected to invest between USD 4.6 and USD 8.1 billion over the next five years.
The rapid increase in the number of mobile phone and social media users has resulted in the generation of a massive amount of data, which in turn has compelled organizations to invest more efficient infrastructure such as data centers and cloud technology. In September 2018, Facebook announced its decision of investing about USD 1 billion to open a first data center in Singapore.
The global data center cooling market has been segmented by component, technique, and application. By component, the market can be segmented into solution and service. The solution segment is further segmented into chilling unit, air conditioner, cooling tower, control system, economizer, liquid cooling system, and others. The service segment is further segmented into installation and deployment, maintenance and support, and consulting. The liquid-based cooling sub-segment is expected to register rapid growth at a CAGR of 10.96% during the forecast period, 2019–2026. Current financial service workloads are necessitating high-performance CPUs and GPUs, which in turn have increased power consumption and, at the same time, lead to excessive heat generation; thus, data center managers are seeking effective alternatives such as air-based cooling.
Based on cooling technique, the market can be segmented into rack/row cooling and room-based cooling. The row/rack cooling segment is projected to register the highest growth as this cooling technique provides cooling for targeted devices, thereby offering both efficiency and economic gains.
On the basis of application, the market can be segmented into IT and Telecom, BFSI, retail, energy and utility, colocation, healthcare, and others. The IT and telecom segment is expected to hold a prominent market share by 2026, owing to the increasing penetration of big data and cloud-based technologies. In terms of data center cooling, the IT and telecom sector is projected to grow at a CAGR of 11.08% during the forecast period.
With a 40% share, North America dominated the global data center cooling market in 2016 and the region is projected to remain dominant with a CAGR of 10.94% during the forecast period, 2019–2026. The region’s growth can primarily be attributed to the noteworthy presence of colocation service providers such as Equinix, AT&T, and others in countries such as the U.S. and Canada. Moreover, increasing data center leasing activities in Northern Virginia and growing demand from a large number of cloud users are expected to propel market growth. Apart from this, the gradually shifting workload towards hosting companies that offer colocation, cloud, and other services is expected to shape the Canada data center cooling market.
The adoption of cloud-based services has been rapidly increasing as these services offer cost reduction in non-critical mission areas, which fuels the demand for data centers. According to the U.S. Department of Commerce, the data center market in Mexico accounted for ~USD 2 billion in 2017 and is expected to grow by 30% until 2020.
Asia Pacific is expected to emerge as the fastest growing region in the global market, owing to increasing demand for data centers from South East Asian countries such as Singapore, Vietnam, and others. Various expansion strategies adopted by major IT players have also formulated the growth of data centers in this region, owing to the presence of stable infrastructure and significant leadership position in cloud computing technology. In August 2018, Google announced its third data center in Singapore with an investment of USD 500 million.
The rapidly increasing number of mobile users, efficient smartphone technology, and favorable mobile plans are expected to alleviate the demand for data center cooling. Favorable government policies in various countries are also supporting the demand for data centers, which, in turn, is expected to propel market growth. For instance, in Indonesia, government regulation number 82 makes it mandatory for business firms conducting electronic transactions to store their personal data in data centers in the country.
Growing adoption of cloud technology in the Middle East and Africa is expected to drive the growth of the data center cooling market during the forecast period, 2019–2026. According to Cisco’s Cloud Index, by 2019, MEA cloud traffic is expected to witness the highest growth rate of 41%. Expansion strategies such as IT/Telco partnership are also expected to play a significant role in driving market growth. Equinix has partnered with the Emirates Integrated Telecommunication, which includes a data center in the UAE Emirate of Dubai. This data center is utilized to run as a colocation site for carriers, content providers, financial enterprise and others.
In May 2018, Google announced the Shift To liquid Cooling System integrated with advanced hardware for artificial intelligence as the heat generated by its new Tensor Processing Units (TPUs) exceeded the limits of its previous data center cooling solutions. The adoption of liquid cooling at an increased scale is indicating the rise of hyperscale data centers.
Some of the major companies operating in the global data center cooling market include Schneider Electric Se., Black Box Corporation, Nortek Air Solutions, LLC, Airedale International Air Conditioning Ltd, Rittal GmbH & Co. Kg, Stulz GmbH, Vertiv Co., Asetek, Adaptivcool, and Coolcentric.
Data Center Cooling Market Segmentation
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