The global data center cooling market size was valued at USD 15.7 billion in 2022. It is projected to reach USD 39.49 billion by 2031, growing at a CAGR of 15.7% during the forecast period (2023-2031)
Data centers are strategic building blocks for many organizations, as they provide centralized storage, networking, and backups. Large amounts of data generated are primarily responsible for the escalating need for greater computing capacity in computer networks. This has led to an increase in the energy consumption of data centers. This increase in data center energy consumption has prompted financial and environmental concerns. These considerations necessitate the optimization of data center cooling strategies. Data center cooling refers to the monitoring, measuring, and controlling of data center resources and energy consumption in IT-related equipment such as servers, network switches, and storage, as well as infrastructure components such as computer room air conditioners and power distribution units.
To facilitate the rapid increase in data storage and facilities such as backup data, archiving, managing verification, and authorization, the data centers must utilize their IT hardware infrastructure and services, including servers, power distribution units (PDUs), and other components, appropriately. The efficient operation of a data center is contingent upon optimal planning, predictive analysis, and the regulation of load power, server, and process automation capacities.
|Market Size||39.49 billion|
|Fastest Growing Market||Asia Pacific|
|Largest Market||North America|
|Report Coverage||Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends|
The demand for high computing capacity modified the operational standard for data centers. It creates a more complicated environment, making Computer Room Air Conditioning (CRAC) units an insufficient solution on their own. Today, inadequate rack cooling is a prevalent issue in data centers. A recent study found that server racks in eight out of ten facilities are overheated. This issue causes the worst nightmare for data center administrators, which is downtime.
Adopting the rear door heat exchange (RDHX) system can assist data centers in maintaining rack density. A heat exchanger is installed on the server racks' rear doors to absorb heat. It will later be transferred to the matrix or coil of the heat exchanger. It's like solving two issues at once: inefficient cooling and excessive energy consumption. RDHX is applicable for both newly designed and existing data centers. The component is included in the construction of a new rack enclosure. Incorporating it into existing high-density racks can also improve the cooling system. Additionally, it can provide adequate cooling while eliminating the need for complex under-floor air distribution. Densely packed electrical components, such as processors and other components in data centers, generate more heat and have increased exposure to the outside air. This is generating an enormous demand for new cooling techniques and innovations, which is anticipated to boost the market of data center cooling.
There is a remarkable increase in the number of data center deployments as a result of the rising demand for additional storage to store vast amounts of regularly generated data. Increasing data centers contribute to an increase in global energy consumption and excessive heat production. This is anticipated to generate substantial demand for energy-efficient cooling methods in the near future. Due to technological advancements such as Industry 4.0 and IoT, infrastructure spending is undergoing dramatic changes. Thus, utilizing advanced data center cooling services is likely to aid in optimizing power consumption, thereby making the operation of data centers more energy-efficient and reducing their operational costs.
A typical data center contains numerous types of equipment, nearly all of which require electricity. The energy consumption of older servers and network communications equipment is greater than that of newer, more energy-efficient systems. In the coming years, data center power consumption will continue to rise. This trend is in part fueled by the continued popularity of cloud data centers, which are currently among the largest energy consumers. Data centers utilizing energy-efficient HVAC systems, equipment racks with cooling systems, and energy-efficient doors and windows will engage in a significant amount of ongoing energy consumption management. In developing nations, high energy consumption can impede market growth.
Standard data center temperatures range from 20 to 22 degrees Celsius to optimize performance. When operating a data center in a hot climate, up to 33 percent of the energy consumed is used to operate the cooling systems and infrastructure, and electricity costs can account for more than 50 percent of operating expenses. High-temperature data centers, Specially designed for hot conditions, can reduce capital expenditures because chillers and other cooling equipment are no longer required to cool the data centers and IT equipment below ambient temperatures. With the proper equipment, operating expenses can also anticipate a 45% decrease in overall electrical costs and a spectacular 96% decrease in cooling costs.
The global data center cooling market is bifurcated into four regions, namely North America, Europe, Asia-Pacific, and LAMEA.
North America is the most significant shareholder in the global data center cooling market and is expected to grow at a CAGR of 10.94% during the forecast period. The significant presence of colocation service providers such as Equinix, AT&T, and others in countries such as the United States and Canada is primarily responsible for the region's growth. In addition, increasing data center leasing activities in Northern Virginia and rising demand from a substantial number of cloud users are anticipated to drive market expansion. In addition, the gradual shift in workload toward hosting companies that offer colocation, cloud, and other services is anticipated to influence the data center cooling market in Canada. The United States has the most data center facilities in North America, making it a significant user of data systems. Companies in the United States devote significant resources and capital to data centers. These factors are anticipated to drive the North American market. In April 2022, Google announced its new USD 750 million data center in Nebraska to bring more opportunities for the local communities and grow their businesses by using digital services.
Asia Pacific is expected to grow significantly, with the highest CAGR during the forecast period 2023-2031, 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 a 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. In March 2022, the Telangana government and Microsoft announced the upcoming data center establishment in Hyderabad, which is going to be the largest data center of Microsoft in India.
Europe is expected to account for a significant share of the global market. One of the major challenges in the expansion of data centers is keeping up with network infrastructure and other related services. In addition, European data center service providers are actively pursuing the reusability of heat generated by organic waste. It will be possible to accomplish CO2 reductions by reusing the heat produced by data centers.
The LAMEA is expected to grow swiftly owing to the increasing adoption of cloud technology in the Middle East, South America, and Africa. 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 partnerships are also expected to play a significant role in driving the market growth. Equinix has partnered with 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 enterprises, and others. Khazna Data Centers will construct a new data center in Sharjah, United Arab Emirates, in September 2022. (UAE). The wholesale data center company announced the formation of a joint venture with BEEAH Digital, the digital transformation and future technology division of BEEAH Group, to construct a data center in Sharjah.
Based on product type, the global market is bifurcated into air conditioners, precision air conditioners, chillers, air handling units, and others.
The air conditioners segment is the highest contributor to the market and is expected to grow at a CAGR of xx% during the forecast period, owing to the large number of air conditioners installed in data center infrastructures. Air conditioning systems are a practical means of cooling the air. The air conditioners are affordable because they are inexpensive, but their energy consumption is insufficient. Air conditioners are designed specifically for data center cooling operations. Precision air conditioners are capable of controlling greater heat and AC loads per unit. Multiple units of precision air conditioners can coordinate with one another and automate the efficient cooling of separate AC loads in a large data center. In the coming years, these factors are likely to increase the demand for precision air conditioners.
The chillers segment is expected to grow at a significant CAGR due to its higher heat-reducing capacity than air conditioners. There are 3 types of chillers water-cooled, glycol-cooled, and air-cooled chillers. Chillers are used in those regions near the equator to keep the data centers cooler and store the data. The market for chillers will increase in the Asia Pacific and the Middle East.
Based on data center type, the global market is bifurcated into large-scale DC, medium-scale DC, and small-scale DC.
The large-scale data center segment is the highest contributor to the market and is expected to grow at a CAGR of xx% during the forecast period. The bigger share is linked to the large amount of data generated due to the expanding use of cloud-based services. There is a growing demand for much more servers and storage capacity to accommodate this data. These variables are likely to increase demand for large-scale data centers.
The medium size data center segment is anticipated to grow at a significant CAGR, owing to the increasing demand for storing consumer data by medium-sized organizations and startup companies in developing countries.
Based on the cooling technique, the global market is bifurcated into room-based cooling, rack-based cooling, and row-based cooling.
The rack-based cooling segment is the highest contributor to the market and is expected to grow at a CAGR of xx% during the forecast period. The airflow paths within a rack are precisely defined. Rack-based cooling is simple to implement, increases extreme density, and incurs additional costs. Due to the additional benefits of rack-based cooling techniques, businesses are likely to make long-term investments in these methods.
The row-based cooling segment is expected to grow at a higher CAGR, owing to its cost-effective flexibility, speed, and a number of the density benefits of the rack-based approach. In contrast to room-based cooling, airflow paths are shorter and more precisely defined. This decreases the fan power required by the CRAC, increasing its efficiency. Additionally, a row-oriented design enables cooling capacity and redundancy to be tailored to the actual requirements of particular rows.
Based on end users, the global market is bifurcated into BFSI, IT and telecommunication, manufacturing, retail, healthcare, and others.
The IT and telecommunication segment is the highest contributor to the market, and it is expected to grow at a CAGR of xx% during the forecast period. There is a variety of hosting services, including cloud services and web hosting companies. Web 2.0 consists of Twitter, Google, Facebook, and others. High demand for data center service and cooling exists among these businesses. Furthermore, energy consumption contributes to the initial operating costs of the telecom industry. Maximum energy is used to power and cool the supporting infrastructure for electronic equipment. For instance, mobile switching centers (MSC) are outfitted with an abundance of heavy electronic equipment, such as servers, cables, and batteries. Therefore, service providers must maintain the specified cooling temperature to ensure the proper operation of the equipment.
The healthcare segment is expected to grow at a higher CAGR, owing to the rise in the maintenance of healthcare records in a digitized mode through an electronic healthcare record system. The digitalization of the healthcare sector will increase the need for servers to store data and eventually contribute to the growth of the market.