Data Center Cooling Market Size, Share & COVID-19 Impact Analysis, By Product (Air Conditioners, Precision Air Conditioners, Liquid Cooling, Air Handling Unit, and Others), By Data Center Type (Large Scale, Medium Scale, and Small Scale), By Cooling Technique (Room-based Cooling, Rack-based Cooling, and Row-based Cooling), By Industry (BFSI, IT and Telecom, Manufacturing, Retail, Healthcare, Energy and Utilities, and Others), and Regional Forecast, 2023-2030

The global data center cooling market size was valued at USD 13.51 billion in 2022 and is projected to grow from USD 14.85 billion in 2023 to USD 30.31 billion by 2030, exhibiting a CAGR of 10.7% during the forecast period.

Data centers are strategic blocks for many organizations providing capabilities of centralized storage, networking, and backups. Increasing demand for higher computing capacity of the computer networks is primarily driven by the large amount of data being generated. This has led to a growth in data center energy consumption. Furthermore, this growth in energy consumption of data centers has led to financial and environmental concerns. These concerns are driving the need for optimized changes in data center cooling strategies.

Data center cooling refers to monitoring, measuring, and controlling data center resources as well as energy consumption in IT-related equipment, such as servers, network switches, storage, and infrastructure components. These components include computer room air conditioners and power distribution units.

To facilitate the rapid increase in data storage and offered services, such as data backup & archiving, managing authentication, and authorization, data center operators are required to deploy their IT hardware infrastructures including servers, Power Distribution Units (PDUs), and other components suitably. Such factors are expected to boost the market growth.

COVID-19 IMPACT

Rising Migration to Cloud-based Servers amid COVID-19 Aided Market Growth

The COVID-19 pandemic positively impacted this market’s growth. Cloud migrations reduce upfront hardware expenses and provides scalability to the users. In addition, new safety measures to develop and improve business practices have been adopted by the main market players and governments. The sales of data center cooling solutions increased as technology had advanced and targeted the right audience.

Due to the pandemic, compulsory social distance regulations were imposed and shifting physical servers, shutting down buildings, and opening new spaces were more complicated. This growth led to a global increase in the demand for data centers. However, tremendous savings on hardware during this period increased CapEx investments in the IT sector following the pandemic. There was also a rise in the deployment of cloud services, creating new technical and operational disciplines. For instance, in June 2020, Microsoft Corporation established a trial undersea data center in search of COVID-19 vaccine.

As a result, the market size is likely to expand in future.

LATEST TREND

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Changing Landscape of Sustainable Technologies to Propel Market Growth

Energy efficiency and environmental sustainability are now a top priority for data center managers. Some of the effective ways to achieve cost-efficient growth with respect to data centers are through optimum utilization of space, enhanced cooling capacities, and optimized electric power usage. The commercialization of data center services is a growing market trend. As organizations are more inclined toward outsourcing, business activities make the market more price-driven.

One of the emerging market trends is the development of next-generation sustainability technologies. Tech companies can deliver much more substantial energy and carbon savings through the use of advanced technologies such as Artificial Intelligence (AI). To prevent costly breakdowns, AI can easily detect problems with cooling systems in advance. Moreover, increased data center workload and integration of IT equipment are likely to raise the power density; which will drive the demand for higher rack power densities. An excessive amount of heat is generated due to increased rack densities, as a result of which, the demand for data center cooling solutions is increasing.

DRIVING FACTOR

Growing Need for Optimizing Infrastructure Budgets to Achieve Business Growth will Ensure Market Expansion

There is a notable surge in the number of data center deployments owing to the increasing demand for additional storage to store large volumes of data that are generated regularly. Increasing establishment of data centers leads to a rise in overall energy consumption and also contributes to excessive heat generation. This is anticipated to create significant demand for low-power-consuming cooling techniques.

Owing to advancements in technologies, such as Industry 4.0 and IoT, there has been a notable increase in infrastructure spending. Thus, leveraging advanced data center cooling solutions is likely to help optimize the power consumption, which will make data centers more energy efficient and lower their operational cost at the same time.

RESTRAINING FACTOR

Laws and Regulations Associated with Protection of Data to Hamper Market Growth

Data centers should provide an enhanced level of safety for equipment that is kept within them. It also includes protecting against physical and cyber threats such as theft or vandalism. To ensure the protection of information, customers place their confidence in data centers. The major restraining factor which data center providers are experiencing is complying with the rules associated with individual data protection.

Nevertheless, growth of the market might get impeded by the need for specialized infrastructure and high investment costs associated with the design and maintenance of these solutions. In addition, this market is anticipated to face challenges over the forecast period due to cooling problems during power interruptions and increased carbon emissions.

SEGMENTATION

By Product Analysis

Due to Effectiveness of Liquid Cooling Technique, Market is Projected to Witness High Demand

Based on product, the market is segmented into air conditioners, precision air conditioners, liquid cooling, air handling unit, and others. Liquid cooling segment is expected to grow at a higher CAGR during the forecast period. Liquid cooling provides specific advantages. For instance, a liquid cooling solution protects servers in edge data centers and a high cooling capacity is ideal for using blockchain, AI, Internet of Things(IoT), and other technologies. Higher capacity, lower cost, and less impact on the environment are major benefits of using liquid cooling. A liquid cooling device is capable of controlling the rising heat and high AC loads per unit. Various units of liquid cooling equipment can be combined for a large data center for efficient operation of individual AC loads. Various organizations are also adopting liquid cooling techniques. For instance,

• In April 2023, Meta planned a change to the liquid cooling technique used in its AI-centric data center design. To better support Artificial Intelligence, the strategic shift in Meta's data center design focuses on making optimal use of new facilities.

In terms of market share, the air conditioners segment held the majority of the market in 2022. Air conditioners are deployed on a large scale in data center infrastructures. The air conditioning systems are a convenient way of air cooling. Air conditioners are affordable as they are quite inexpensive, however, they are quite insufficient in terms of energy usage.

These aspects are likely to fuel the demand for liquid cooling data centers in the coming years.

By Data Center Type Analysis

Rising Demand for Cloud Servers in Large Scale Data Center is Projected to Have a Lucrative Growth

By data center type, the market is categorized into large scale, medium scale, and small scale. The large scale segment is anticipated to hold a dominant data center cooling market share during the forecast period. The increasing adoption of cloud-based services is generating a large amount of data. To store this data, there is a rising demand for more servers and storage space. These factors are likely to fuel the demand for large scale data centers.

By Cooling Technique Analysis

Faster Implementation and Flexible Environment of Rack-based Cooling is Likely to Fuel the Demand in the Market

Based on cooling technique, the market has been classified into room-based cooling, row-based cooling, and rack-based cooling.

The rack-based cooling segment is projected to witness exponential growth in the coming years. Compared to room-based and row-based cooling techniques, the airflow paths of rack-based method are precisely defined. Rack-based cooling is fast to implement and gains extreme density, but comes with additional expenses. However, owing to the additional advantages of rack-based cooling techniques, organizations are likely to make long term investments in them.

Row-based cooling provides flexibility, speed, and some of the density advantages of the rack-based approach with optimized cost. However, this type of cooling is slightly more costly than room-based cooling. As per a white paper published by Schneider Electric, there is a general preference among small-sized data centers and high-density zones toward row-based cooling, whereas larger data centers are likely to be more inclined toward room-based cooling.

A room-based cooling unit monitors the total heat load of the room. This cooling technique can have one or more air conditioners that supply cool air. The room-based design is often affected by particular constraints of the room, such as its shape, ceiling height, and rack layout. Therefore, the adoption of room-based cooling is expected to decrease during the forecast period.

By Industry Analysis

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Rising Demand for Effective Cooling Services within IT & Telecom Industry Projected to Dominate Market Growth

Based on industry, the market is segmented into BFSI, IT and telecom, manufacturing, retail, healthcare, energy and utilities, and others. The IT and telecom segment is expected to be a significant revenue contributor in the global market. This industry consists of companies offering hosting services and Web 2.0. Hosting services include cloud services, web hosting, and others. Whereas, Web 2.0 includes Yahoo, Google, Facebook, and others. The demand for data center services among these companies is high.

Globally, there is a growing trend of outsourcing business operations to third-party colocation service providers. The colocation service providers are more focused on providing high efficiencies at specific load conditions. These factors are likely to drive the adoption of advanced cooling techniques in the IT & telecom industry.

The retail segment is expected to showcase a higher CAGR over the forecast period. This is due to the widespread use of image verification tools, such as IPVT, social media, smartphones, and tablets, which have increased data volumes, thereby boosting the demand for data center cooling solutions.

Research and developments in health information technology and the growing adoption of Electronic Healthcare Record (EHR) system are expected to supplement the market growth during the forecast period. North America and Europe are anticipated to witness considerable growth in the establishment of data center cooling units in the healthcare segment.

REGIONAL INSIGHTS

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Geographically, the market for data center cooling is fragmented into five major regions such as North America, South America, Europe, the Middle East & Africa, and Asia Pacific. They are further categorized into countries.

North America captured the largest market share in 2022 and is expected to remain dominant during the forecast period. The U.S. has the highest number of data center facilities, making it a significant adopter of data systems in North America. There is substantial spending and investment in data centers by companies in the U.S. For instance,

• In May 2022, Intel launched a new Data Center Sustainability Initiative with a USD 700 million investment to set up a new research center dedicated to liquid and immersion cooling. It also introduced the first reference design of immersion cooling technology in the market to encourage its use in data centers.

These factors are expected to drive the market in North America.

Data center operators in Asia Pacific are trying to improve the consumer experience in terms of enhanced internet speed and reduced latency. In a broad view, this will positively influence the market, and the region is expected to record a higher CAGR.

Similarly, Cisco Systems Inc. expects that Asia Pacific may use twice as much mobile data in a month than North America and Western Europe. The regional market also benefits from the rising setup of data centers by reputed companies. For instance, in 2022, PhonePe launched its first green data center in India by partnering with NTT Telecommunications and Dell Technologies. With efficient data protection, power efficiency, ease of operation, and cloud solutions, the green data center is intended to create new opportunities for PhonePe's data management.

The number of data centers in Europe has also grown significantly. In addition, active initiatives are being taken by data center service providers in Europe to exploit heat produced from green waste. However, by the end of the forecast period, South American countries are expected to have lucrative market opportunities for data center cooling services. The Middle East & Africa is projected to exhibit steady data center cooling market growth during the forecast period.

Furthermore, the growing adoption of internet-enabled devices is expected to increase the demand for data centers across the region and supplement the growth of the regional market.

KEY INDUSTRY PLAYERS

Key Industry Players to Focus on Strategic Partnerships and Expansion of Product Portfolio

The market players are trying to expand their customer base by using several growth strategies such as partnerships, mergers, acquisitions, and others. These players are also planning to develop new products by expanding their technological investments in research and development. For instance,

March 2023 – LiquidStack received funding from Trane Technologies PLC to enhance the implementation of its solutions and reduce electronic waste, water usage, carbon footprint, and other environmental impacts by providing fluid immersion cooling for data centers.

October 2022 – U.S.-based Aligned Data Centers acquired two new sites to build 2 million square feet of high-tech campuses with more than 400 megawatts of IT load. Aligned's patented Delta cooling technology, which uses arrays to absorb, eliminate heat, and decrease water flow requirements, would be used in the new data centers. A heat rejection system, which uses approximately 80% less water and can operate without water as needed, was also installed in the facility.

List of Key Companies Profiled:

• Asetek, Inc. (U.S.)


• Rittal GmbH & Co. KG (Germany)


• Schneider Electric (France)


• Coolcentric (U.S.)


• Vertiv Group Corp. (U.S.)


• STULZ GMBH (Germany)


• Hitachi, Ltd. (Japan)


• Nortek (Italy)


• LiquidStack Holding B.V. (U.S.)


• Munters (India)

KEY INDUSTRY DEVELOPMENTS:

• March 2023 – Castrol, a leading lubricant brand, joined GRC's ElectroSafe Fluid Partner Program, a platform for strategic partnerships to help customers reduce water and energy consumption, for its data center operations by offering advanced immersion cooling fluids. GRC (Green Revolution Cooling) is one of the leaders in data center immersion cooling.


• August 2022 – One Asian Network Limited announced that its data center in Hong Kong was being equipped with a solution that can absorb cold water. The new solution is claimed to be efficient at reducing the energy consumption of data centers and delivering a high degree of reliability. This solution is an innovative change in how high energy consuming companies shift toward a green future through the adoption of sustainability technologies, innovation, and best practices.


• May 2022 – Alibaba Cloud, a Chinese digital technology & innovation company, launched its third data center in Germany. The company offers a wide range of cloud services, from storage and networking to databases. In addition, with more than 6,500 hours of complete free cooling in a year, the new data center has an air conditioning system using dry dryers that utilize low ambient temperatures instead of mechanical refrigeration.

REPORT COVERAGE

An Infographic Representation of Data Center Cooling Market

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The research report includes an analysis of leading regions, market dynamics, and market segmentation to understand the market better. Furthermore, the report provides insights into the latest industry trends and analyzes technologies that are deployed at a rapid pace at the global level. It further highlights some of the growth-stimulating factors and restraints, helping the reader gain in-depth knowledge about the market.

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