Green Data Center Market Size, Share & COVID-19 Impact Analysis, By Component (Solutions and Services), By User (Colocation Providers, Cloud Service Providers (CSPs), and Enterprises), and Regional Forecast, 2023 – 2030

The global green data center market size was valued at USD 61.04 billion in 2022. The market is projected to grow from USD 70.14 billion in 2023 to USD 213.39 billion by 2030, exhibiting a CAGR of 17.2% during the forecast period.

A green data center is a service facility that hosts servers to store, manage, and distribute data using energy-efficient technologies. The data centers do not comprise outdated systems and use newer, more resourceful technologies. With the growing demand for data storage, operators have witnessed an increase in the deployment of power and cooling systems. In such cases, green or sustainable data centers are a solution for a greener future.

The report has considered key players offering solutions for green data centers including Dell EMC Inc., Eaton Corporation, Fujitsu Ltd., Cisco Systems Inc., HP Inc., and others. The growing concern about energy consumption by data centers has prompted many governments worldwide to regulate and control energy consumption, which is also a primary factor driving the green data center market growth. For instance, Leadership in Energy and Environmental Design (LEED) is a green building certification program that grants data centers a silver, gold, or platinum certification as per their green construction accomplishments.

COVID-19 IMPACT

Accelerating Demand for Cloud Data Center Services Amidst Pandemic Drove Market Growth

The COVID-19 pandemic led many companies worldwide to make progressive adjustments while operating in the new normal. With the growing popularity of work-from-home culture, hyperscalers, such as Google, Microsoft, AWS, and others, constantly strived to meet the spike in demand for cloud infrastructure. A large amount of data was generated due to remote work, online learning, and increased consumption of digital technologies. This led to a higher demand for data centers to support the growing online activities, including e-commerce, video conferencing, and OTT streaming. Moreover, lockdowns during the pandemic witnessed large banking transactions, thereby making banking data centers go for capacity expansion while staying sustainable and green. For instance, in March 2020, ICICI Bank Data Centre in Hyderabad was named a Platinum-rated project under the IGBC Green Data Centre Rating System.

However, the market was hindered by the unavailability and delivery of green technologies and IT infrastructure. Despite this turnover, the trend of going green is expected to grow exponentially in the post-pandemic phase, with organizations focusing on data center automation, reusing hardware, and improving environmental awareness.

LATEST TRENDS

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Increasing Adoption of Renewable Energy Resources to Reduce Carbon Footprint will Bolster Market Growth

The growing need for energy-efficient infrastructure and increasing purchase of renewable energy resources, such as solar, wind, hydroelectric, and geothermal energy will drive the market growth. By relying on clean energy, sustainable data centers can significantly reduce their carbon emissions as compared to conventional data centers that heavily rely on fossil fuels.

Moreover, these data centers often seek certifications from recognized environmental standards, such as LEED (Leadership in Energy and Environmental Design) or BREEAM (Building Research Establishment Environmental Assessment Method). These certifications encourage data centers to combat carbon emissions and promote environmental sustainability within the IT industry. Companies are deploying energy-efficient green technologies in their data centers to grab the untapped potential of sustainability. For instance,

• In September 2022, Nxtra (a subsidiary of Bharati Airtel) joined Bloom Energy to install a fuel cell in the Karnataka data center with a low environmental impact. The company aims to reduce its carbon footprint through a cleaner, hydrogen-ready fuel supply.

DRIVING FACTORS

Rapid Emergence of Artificial Intelligence in Power & Cooling Technologies to Drive Market Growth

Using emerging technologies, such as Artificial intelligence (AI) and Machine Learning (ML), in green data centers aids in automating various processes and reducing the carbon footprint. With digital transformation gaining momentum across industries, the demand for data services is increasing rapidly. To cater to such demands, data center operators constantly search for efficient power, more space, and a skilled workforce. The operators are addressing these problems by deploying AI in their infrastructure coupled with IoT and ML. AI-based robots can predict power outages, achieve higher performance metrics, and reduce maintenance costs. In addition, digital twins with AI and ML aid data centers in reducing their carbon footprint.

For instance, in May 2023, Huawei launched the Fan Wall Chilled Water Cooling Solution and PowerPOD 3.0 at the Huawei Green Data Center Summit. The company launched Artificial intelligence (AI) -based power and cooling products in the Asia Pacific market that aid the data centers in the region in improving their sustainability.

Thus, the above mentioned are some market drivers that will aid in the adoption of green data centers.

RESTRAINING FACTORS

Cost Considerations Associated with Initial Investment & Modifying Existing Infrastructure to Impede Market Progress

The initial investment in building a sustainable data center with energy-efficient technologies is higher than that of a traditional one. The energy costs of these data centers exceed the overall investments in the IT infrastructure, making it difficult for small and mid-sized data center operators to deploy such solutions.

Moreover, data centers are prone to physical and digital security risks, which is concerning to the service providers. For instance, a Mimecast Threat Intelligence Center report stated that between January and March 2020, the monthly global volumes of cybercrime spam increased by 26%, and impersonation fraud detections increased by 30%. Moreover, around 115,000 COVID-19-related suspicious spoof domains were detected during the pandemic.

However, companies are investing in these data centers owing to the long-term payback of initial investments.

SEGMENTATION

By Component Analysis

Innovative Cooling Technologies & Heat Reuse Strategies to Boost Demand for Data Center Solutions

Based on component, the market is segmented into solutions and services. The solutions segment is further divided into power system, monitoring & management system, cooling/HVAC system, and networking system. The solutions segment holds the largest share in the market owing to the rising demand for efficient power and cooling systems that are required for a sustainable data center. Cooling solutions are in charge of maintaining and running adequate technologies for the IT equipment. Moreover, the power system in these data centers involves using high-efficiency Power Distribution Units (PDUs) and uninterruptible power supplies that minimize the overall electricity consumption.

However, the services segment is expected to record the highest CAGR due to their growing demand in deploying green technologies. Professional service providers offer expertise for customized solutions and best practices for energy efficiency, cooling, and renewable data integration.

By User Analysis

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Growing Environment Consciousness among Businesses to Increase Product Demand among Colocation Providers

Based on user, the market is categorized into colocation providers, Cloud Service Providers (CSPs), and enterprises.

The colocation providers segment is expected to register the fastest CAGR during the forecast period owing to its growing popularity among green and sustainable data center businesses. Colocation providers serve multiple clients, consolidating their IT infrastructure in a shared facility. Their services result in better efficiency and reduced environmental impact as compared to individual enterprise data centers. Moreover, businesses with budget constraints can always optimize the services offered by colocation providers.

The enterprise segment holds the largest share in the market due to the growing prioritization of environmental responsibility and sustainability among enterprise owners in their operations.

REGIONAL INSIGHTS

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The market has been studied across North America, Europe, Asia Pacific, South America, and the Middle East & Africa.

North America holds the largest green data center market share owing to the large number of data centers in the region. North America is witnessing high investments by colocation providers and hyperscale data center operators. Moreover, the presence of key players offers ample growth opportunities for market growth. Many colocation providers in the region are signing Power Purchase Agreements (PPAs) and utilizing renewable energy to power their facilities.

Asia Pacific is expected to record the highest CAGR during the forecast period owing to the burgeoning IT sector and rapid utilization of digital technologies. Several countries in the APAC region have introduced regulations and incentives to promote green initiatives and reduce carbon emissions. Also, many data center companies have set sustainable goals and are increasingly offering solutions that are environment-friendly. For instance, in July 2023, Huawei unveiled three green data center facility solutions at the Global Smart Data Center Summit. Some of the solutions include AeroTurbo fans, IceCube polymer heat exchangers, and iCooling AI energy efficiency cooling solutions.

Europe is likely to grow significantly over the years owing to the region's rising environmental initiatives and data center regulatory policies. Data center operators must adhere to the European regulatory bodies including the Ecodesign Regulation for data storage, the EU Code of Conduct for Energy Efficiency, and the EU Green Public Procurement standards for server rooms, data centers, and cloud computing services. Thus, due to its commitment to sustainability, the region will witness tremendous growth in the forthcoming years.

The Middle East & Africa region also holds great market potential owing to the abundance of renewable energy across the region. Utilizing energy resources, such as wind and solar, to power green data centers aligns with the region’s sustainability goals and can contribute to the growth of such data centers.

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South America is witnessing an increasing demand for sustainable data center services in Argentina, Chile, Brazil, and others. As per Cloudscene, a data-driven marketplace platform, Brazil has more than 120 data centers. The regional market is also driven by factors, such as government regulations, environmental policies, adoption of advanced technologies, and corporate sustainability initiatives.

KEY INDUSTRY PLAYERS

Partnerships & Collaborations among Green Data Center Providers to Foster Market Growth

Major players are collaborating and partnering with similar companies to bring significant financial gains to both companies. Partnerships aid companies in escalating their sales and cutting down costs by sharing or combining resources. For instance,

• June 2023: Cyberlink, an ICT infrastructure service provider, partnered with Green, a data center provider, to expand its data center backbone. The partnership aided Cyberlink in offering its infrastructure services to three green data centers in Lupfig, Dielsdorf, and Schlieren.

List of Key Companies Profiled:

• Dell EMC Inc. (U.S.)


• Fujitsu Ltd (Japan)


• Cisco Systems, Inc. (U.S.)


• HP Inc. (U.S.)


• Hitachi Ltd (Japan)


• Schneider Electric SE (France)


• IBM Corporation (U.S.)


• Eaton Corporation (Ireland)


• Vertiv Corporation (U.S.)


• Green Revolution Cooling, Inc. (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• May 2023: Sonic Edge, a U.K.-based modular data center firm, partnered with Deep Green to offer its customers low power costs by using immersion cooling technologies. The partnership will aid Sonic Edge in launching 50 new HPC/EdgePods across the U.K. by 2024.


• February 2023: Micro Hub opened a solar-powered data center in Dubai by partnering with technology players, such as Dell Technologies, Microsoft, Huawei, and VMWare. The data center utilizes 100% renewable energy and includes the latest advances such as Internet of Things (IoT), digital twin technologies, cybersecurity, Artificial Intelligence (AI), and others.


• October 2022: PhonePe, with the help of Dell Technologies and NTT, launched its first data center in India. The data center was designed and built with advanced green cooling technologies, such as Liquid Immersion Cooling (LIC) and Contact Liquid Cooling (DCLC).


• September 2022: NEC Corporation planned to establish two data centers utilizing 100% renewable energy. The NEC Kanagawa Data Center and the NEC Kobe Data Center would be built and designed specifically to reduce greenhouse gas emissions.


• January 2022: Green Revolution Cooling signed a multi-year partnership with Intel to reduce the environmental impact of IT infrastructure and increase data center sustainability. The partnership enabled the engineering teams of both the companies to test the reliability and safety of immersion cooling technologies.

REPORT COVERAGE

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The global market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product/service types, and leading applications of the product. Besides, it offers insights into the latest market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the growth of the market in recent years.

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