The global data center power market had a revenue holding of USD 19.18 billion in 2021. It is expected to reach USD 29.4 billion by 2030, growing at a CAGR of 6.2% during the forecast period (2022–2030). Processing the data generated by consumers and corporate end-users requires developing and constructing data centers as mission-critical infrastructure. Fiber optic cables, telecommunication broadband access, or satellites link data centers to customers and enterprises. They include server-based IT infrastructures, networks, storage, and infrastructure for processing and storing user data. Data centers also have power and cooling infrastructure to provide end customers with highly available, highly dependable, and scalable services. Construction costs might range from millions to billions depending on the data center's location, capacity, and scale. Data centers are outfitted with transfer switches & switchgear, PDUs, UPS systems, generators, and other infrastructure for electricity. A data center's power usage is inversely correlated with the number of servers it houses. Data centers store, share, and manage information and centralize essential IT functions and hardware. They can be grouped according to location, ownership structure, and business model.
Data centers are becoming a precious commodity as smaller and large businesses depend on the regular operation of their operations and the privacy of their users' data. For a large data center, even a single downtime can cost millions. Data center operators are implementing new power technologies to decrease outages and downtime. The demand for cloud storage has led to an increase in the number of data centers worldwide. These data centers use a lot of electricity. The growth in introducing cutting-edge systems to reduce power consumption and the creation of modular data centers is expected to fuel market expansion.
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Growing Power Outrages
According to a study by the Uptime Institute, power outages have happened in 78% of data centers during the previous three years, and 75% of those failures could have been avoided. The effects of power outages are felt widely. Typically, this results in lost revenue and additional expenses. Datacenter shutdowns are now most frequently caused by software and networking issues, but power problems are less common. Business productivity suffers from data loss. Due to lost data, users and employees cannot access files and perform their essential job duties. Datacenter shutdowns can be caused by various factors, including network issues, hardware or software issues, power outages, cyberattacks, and human error.
Since many small and large businesses depend on the regular operation of their business and the data security of regular customers, data centers are quickly becoming a precious commodity. Additionally, natural disasters are having an impact on some data centers. These power failures have compelled operators to provide their facilities with redundant data center power infrastructure. Data center operators are implementing new power solutions to reduce outages and downtime. For instance, Amazon Web Services revealed that it is creating its in-rack UPS systems to prevent outages and downtime. Market players regularly develop solutions to reduce the frequency of power outages caused in various instances by combining monitoring controls like dynamic resource control and viewpoint analysis. Artificial intelligence (AI) is another tool hyper-scale operators use to reduce power usage and prevent outages. Thus, boosting the data center power market.
The substantial initial investment needed in the data center power sector is a significant barrier for businesses. It is necessary to switch from outdated to modern data center components to adopt modern power systems in data centers. This stuff needs infrastructural upgrades, new hardware and software installation, and labor. A high initial investment is necessary for this changeover process. Due to this need, most businesses, even SMEs with limited money, frequently cannot modernize their data centers. Schneider Electric estimates that a typical rack in a high availability 2N data center has a TCO of 18% for power equipment. Energy-efficient power solutions are much more expensive than the initial investment required for deploying conventional power solutions. Consequently, many corporate entities are hesitant to adopt modern, energy-saving data center power systems.
5G Growing Edge Center Investments
For mission-critical communications, 5G network connectivity offers fast data transmission rates. IoT, robots, and AI applications, among others, can all benefit from 5G Live TV's extensive broadband capabilities, which enable high-speed connections. Compared to 4G, 5G delivers much higher connection density, lower latency, and better bandwidth. Edge computing, which brings IT and cloud-based services closer to end users and devices, is gaining popularity with the development and implementation of 5G. Considering their proximity to end consumers and their capacity for processing, moving, and storing data, edge data centers are smaller in size but have a more extensive range of applications. Edge computing is developing faster than ever, and its implementation necessitates quick, intelligent answers.
Edge data centers are being eagerly sought after for locations on tower sites by organizations like American Tower and SBA Communications. Businesses would collaborate to establish Edge Data Center and Cloud Solutions at carefully chosen distribution centers. To support the increased need for power and IT infrastructures, such as rack PDUs of >10 kW and rack-level UPS systems, there will be an increasing need for high-density racks and power infrastructure. More UPS systems and generators will be purchased due to the need for data centers with enhanced power reliability and redundancy. With more modular infrastructure options available, edge deployment will continue to push advancements in the data center power sector.
The global data center power market is segregated into power infrastructure, UPS system capacity, generator capacity, tier standards, and region.
Based on power infrastructure, the global data center power market includes UPS Systems, Generators, Transfer Switches & Switchgear, PDUs, and Others.
The UPS Systems section will likely grow at a CAGR of 6.25% and hold the largest market share over the forecast period. Datacenter UPS systems use battery-stored current to provide AC to vital infrastructure during a power outage. Inverters and rectifiers, which charge the battery and change the current from DC to AC for the IT infrastructure, are parts of UPS systems. UPS systems are increasingly being used to provide backup power for the cooling systems installed in the facility. Cooling systems are crucial for the efficient operation of data centers because they prevent malfunctions brought on by overheating by maintaining an ideal temperature.
The Generators section will hold the second-largest market share. In contrast to UPS systems, which provide backup for a short time, they provide power backup for data centers for a long time, typically up to a few days. However, since UPS systems handle power surges, the need for generators is less than that of UPS systems. Operators of data centers use generators to ensure that their facilities run at 100%, regardless of changes in the incoming power from utility grids.
Based on UPS system capacity, the global data center power market includes <=500 kVA, >500–1,000 kVA, and >1,000 kVA.
The <=500 kVA section will likely hold the largest market share, growing at a CAGR of 8.2% by 2030. Vendors provide various UPS systems with a power capacity of =500 kVA. Many products are available at 1–50 kVA, and these systems are typically used at the rack level. These systems have a bigger market in small- and medium-sized data centers. To support multiple rows of IT infrastructure at the row-level in data centers, a few installations adopt multiple 2U UPS systems inside a single rack.
The >1,000 kVA section will hold the second-largest market share. These systems are ideally suited for medium to large data center facilities with numerous data halls. Some data center facilities have also implemented UPS systems with >500–1,000 kVA and a mix of UPS systems with higher or lower capacities.
Based on generator capacity, the global data center power market includes 0.15 MW, 1.5–3 MW, and >3 MW.
The 1.5–3 MW section will likely grow at a CAGR of 6.1% and hold the largest market share over the forecast period. In data centers, where the power capacity of these systems is typically 1.75 MW, 2.25 MW, and 2.5 MW, generator sets with a capacity of 1.5–3 MW are used. These generators are used in data centers with N+N or 2N redundant configurations, multiple modules, and a capacity range of 3 to 5 MW. These systems are also used in data centers with systems with a higher capacity, or >3 MW, to support various requirements or provide backup power to cooling systems.
The >3 MW section will hold the second-largest market share. The demand for generators with a capacity of >3 MW will increase due to the increased development of large and mega facilities. Globally, there were numerous installations of generators with a capacity of 3.5 MW to 6 MW. Additionally, the Diesel Rotary Uninterruptible Power System (DRUPS) system facilitates the expansion of the data center generator market.
Based on tier standards, the global data center power market includes Tier I & II, Tier III, and Tier IV.
The Tier III section is projected to hold the largest market share, growing at a CAGR of 8.5% over the forecast period. Tier III data centers have availability of 99.98%, a minimum redundancy of N+1 for power and cooling infrastructure, and an annual downtime of about 1.6 hours. Since redundant components are increasingly necessary to support mission-critical applications, many data centers constructed in recent years are of Tier III standards. These facilities will cost more per rack for colocation than the Tier I and Tier II facilities.
The Tier IV section will hold the second-largest market share. With a minimum of 2N+1 redundancy for power and cooling infrastructure, Tier IV data centers have availability of 99.995% and an average annual downtime of about 2.4 minutes. Every infrastructure in Tier IV data centers has at least 2N+1 redundancy, and some critical infrastructures like PDUs and UPS systems have 2N+2 redundancy. This makes the facility fault-tolerant.
North American Dominion Over the Market
Region-wise, the global data center power market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
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North America will command the leading market share, expanding at a CAGR of 3.87% over the forecast period. With the early availability and adoption of novel technologies and investments from colocation service providers, hyperscale data center operators, companies, and government agencies, the North American data center market leads the data center sector in growth. The region plays a vital role as a driver and an incumbent for every new technological advancement in the data center industry. In North America, the main drivers of market expansion are Facebook, Google, Equinix, Digital Realty, Compass Datacenters, Cologix, and other companies.
With billions invested by colocation providers, operators of hyper-scale data centers, businesses, and government organizations in data center facilities and the adoption of redundant power backup infrastructure, the US dominates the UPS industry in North America, followed by Canada. With more facilities being created as "green data centers," more affordable and efficient power solutions are needed. As a result of this need, data centers' rack power density has increased, requiring them to install more electrical infrastructure and raising investment levels.
Asia-Pacific will likely generate USD 9,831 million by 2030, growing at a CAGR of 7.5%. As a result of rising expenditures by colocation providers and hyperscale operators, Asia-Pacific is presently one of the most vibrant data center marketplaces in the world. The main factors propelling the Asia-Pacific data center market are the rising number of internet users, rising social media usage, increasing smartphone penetration, growing cloud service acceptance, and the requirement for businesses to switch from the server room to data center settings. After colocation providers, Internet and cloud service providers are the most prominent players in the Asia Pacific data center market. Many cloud service providers also depend on colocation providers building facilities so that they may collocate space in bulk.