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The global data center cooling market accounted for USD 6.27 billion in 2018 and is projected to reach USD 11.97 billion by 2026, exhibiting a CAGR of 8.5% during the forecast period.
Data centers are strategic blocks for many organizations providing capabilities of centralized storage, networking, and backups. Increasing demand for higher compute capacity of the computer networks is primarily driven by large amount of data being generated. This has led to a growth in data center energy consumption. 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 of data center resources as well as energy consumption in both IT related equipment such as servers, network switches, storage and infrastructure components including computer room air conditioners and power distribution units.
To facilitate the rapid increase in data storage and offered services such as data backup and archiving, managing authentication, and authorization, data center operators are required to deploy their IT hardware infrastructures including servers, power distribution units (PDU’s) and others components suitably. The efficient working of the data center lies in optimal planning, predictive analysis, controlling load power, server, process automation, and cooling capacities.
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Energy efficiency and environmental sustainability are now a top priority of the data center managers. A better way to achieve cost-efficient growth in the data center is 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 towards outsourcing, business activities make the market more price-driven.
One of the emerging-market trends is the adoption of the hybrid cloud model. Companies are focusing on migrating to hybrid cloud model instead of replacing the traditional data center practices completely due to which hybrid cloud model is gaining momentum. Moreover, increased data center workload and integration of IT equipment are likely to increase the power density; which drives the demand for increased rack power densities. Excessive amount of heat is generated due to increased rack densities; as a result of which, demand for cooling solutions is increasing.
“Growing Need for Optimizing Infrastructure Budgets to Achieve Business Growth Will Ensure the Expansion of the Market”
There is a notable upsurge in the number of data center deployments owing to the increasing demand for additional storage to store heaps of data that is generated regularly. Increasing data centers lead to a rise in the overall energy consumption and also contributes in excessive heat generation. This is anticipated to create significant demand for low power consuming cooling techniques in near future.
Owing to the advancements in technology such as Industry 4.0 and IoT, there are tremendous transformations in the infrastructure spending. Thus, leveraging advanced data center cooling solutions is likely to help in optimizing the power consumption which will make the working of data centers more energy efficient and lower the operational cost of data centers at the same time.
“Growing Demand for High Density Racks is Likely to Drive the Data Center Cooling Market “
With the increasing competition to innovate new products, marketing initiatives and business models, the demand for flexible infrastructure is increasing among the organizations. For instance, IDC predicts that organizations are likely to be more inclined towards outsourcing business operations by leveraging service provider data centers for dedicated and shared cloud services. Thus, the rise in the number of data centers will eventually contribute in the growing demand for data center cooling systems.
New approaches such as free air cooling, liquid cooling among others with improved technologies must be implemented to offer the cooling high-density systems required for reliable operation. Compactly packed electronic equipment, such as processors and other components data centers, generate more amount of heat than general-purpose environments that are saturated by people and increased exposure to the outside air. This is creating a huge demand for new cooling techniques and innovations for the same, which is expected to boost the data center cooling market.
Similarly, big data analytics and business analytics revenue are anticipated to rise in the coming years owing to the rapid adoption of software as a service primarily driven by the IT and software sectors. Thus with the technological improvement in the high density racks for storing high amount of generated data new and improved cooling techniques will be required. This will generate high demand for cooling equipment in the data center.
“Precision Air Conditioners Projected to Witness High Demand in the Coming Years”
In terms of the market revenue, the air conditioners segment held the majority of the data center cooling market. Air conditioners are deployed on a large scale in data center infrastructures. The air conditioning systems are a convenient way of air cooling. The air conditioners are affordable as they are quite inexpensive, however they are quite insufficient in terms of energy usage.
Precision air conditioners are specifically designed for data center cooling operations. Precision air conditioners exhibit the capacity to control higher heat and heavy AC loads per unit. For a large data center, various units of precision air conditioners can coordinate with each other and automate efficient cooling process of separate AC loads. These aspects are likely to fuel the demand for precision air conditioners in the coming years.
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Considering the chillers segment in data center cooling market, there are three types of chillers water-cooled chillers, glycol-cooled chillers and air-cooled chillers characterized by their use of water or air to discard heat. Chilled water computer room handler units cost less and have higher heat removal capacity than computer room air conditioner (CRAC) units. Additionally, the chilled water systems require more capital cost for installations.
“Large Scale Data Center is Projected to Have a Lucrative Growth”
By data center type, the market is categorized into large scale data centers, medium-scale data centers and small scale data centers. The large scale data center is anticipated to witness an exponential growth during the forecast period. The increasing adoption of cloud-based services are generating a large amount of data periodically. 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.
Data centers are generally categorized into five types ranging from small to enterprise-level (1-4 servers) and high-end data centers (more than 500). The small data centers are classified into closets and room. The area of closet and room data centers is approximately <=100 square feet and 101-1,000 square feet, whereas the number of servers are (1- 4) and (5-25), respectively.
The midsized data centers are segmented into two types, including localized data centers and mid-tier data centers. The space dimensions of localized data center and mid-tier data center are 1,001 - 2,000 and 2,001 - 20,000 whereas, the number of servers are 26 - 100 and 101 - 499, respectively. The data centers having space dimensions above 20,000 square feet are regarded as large data centers.
Also, it is expected that there would be continuous growth in the size of data center spaces, excluding the on premise server rooms.
“Rack-Based Cooling is Likely to Exhibit a Remarkable CAGR in the Data Center Cooling Market”
The air conditioning in the data center has two key functions which are bulk cooling capacity and distribution of air to the IT loads. Hence, based on the cooling technique the market has been classified into room-based cooling, row-based cooling and rack-based cooling.
Rack-based cooling segment is projected to have exponential growth in the coming years. Compared to room-based cooling and row-based cooling, the rack-based airflow paths are precisely defined. Rack-based cooling is fast to implement, gains extreme density and comes with additional expenses. Owing to the additional advantages of rack-based cooling techniques, organizations are likely to make long term investments in rack-based cooling techniques.
The initial cost of rack-based cooling is higher compared to other cooling techniques due to the additional number of cooling units required which increases the capital costs and other expenses. For instance, in 3Kw per rack the row-based cooling has a total of 48 cooling units, whilst the rack-based cooling would increase it to 160 units.
Row-based cooling provides flexibility, speed, and some of the density advantages of the rack-based approach with optimized cost. Though row-based cooling has slightly more cost than the room-based cooling. As per a white paper published by Schneider Electric, there is a general trend of small size data centers and high-density zones towards row-based cooling, whereas larger data centers are likely to be more inclined towards room-based cooling.
The room-based cooling unit monitors the total heat load of the room. Room based cooling can have one or more air conditioners that supply cool air. The room-based design is often affected by the particular constraints of the room such as room shape, ceiling height, and rack layout. The adoption of room-based cooling is expected to observe a reduced growth rate during the forecast period.
“IT and Telecommunication Industry projected to Lead the Market”
IT and Telecommunication segment is the significant revenue contributor in the global data center cooling market. Also, it is expected to exhibit a remarkable CAGR during the forecast period. IT and telecommunication consists of hosting services and Web 2.0 companies. Hosting services include cloud services, web hosting companies, and others. Whereas, Web 2.0 includes Yahoo, Google, Facebook, and others. The demand for data center services among these companies is high.
Furthermore, the initial operating costs of the telecom industry comes from energy consumption. Maximum energy is used for powering and cooling infrastructure that supports the electronic equipment. For instance, mobile switching centers (MSC) are equipped with heavy electronic equipment in a large quantity such as servers, cables, batteries, and others. As a result, the service providers must keep the particular cooling temperature to ensure the appropriate working of the equipment.
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 and telecommunication systems.
Research and developments in health information technology and growing adoption of electronic healthcare record system (EHR) is expected to supplement the market growth during the forecast period. North America and Europe are anticipated witness considerable growth for data center cooling units in healthcare segment.
Banking and financial industry is expected to have a significant growth owing to the increasing demand for mobile services. The adoption of electronic stock trading is one of the key driver of data center adoption in the banking industry. This is likely to positively influence the data center cooling market in the coming years.
North America is anticipated to dominate the global data center cooling market. 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. These factors are expected to drive the data center cooling market in North America.
According to a report by CBRE Inc., internet users in Asia pacific have grown dramatically from 30% to 50% larger than Europe and America in recent years. According to the International Telecommunication Union (ITU), in 2017, there were an estimated 1.8 million users in Asia Pacific. As a result, data center operators in Asia pacific are trying to improve the consumer experience in terms of enhanced internet speeds and reduced latency. In a broad view, this will positively influence the market.
Similarly, Cisco Systems Inc. expects that Asia pacific is likely to use twice as much mobile data in a month than North America and Western Europe. The growing adoption of internet-enabled devices is expected to increase demand for data centers across Asia pacific and supplement the growth of Asia Pacific data center cooling market.
North America Data Center Cooling Market Size, 2018 (USD Billion)
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From recent years there has been notable growth in the number of data centers in Europe. One of the significant challenges in the data centers expansion is to keep up with the network infrastructure and other related services. Additionally, the data center service providers in Europe are taking active initiatives towards the reuse of heat generated by green waste. By reusing the heat generated by data centers, it will be feasible to achieve CO2 reductions.
Whilst, Latin America is anticipated to exhibit lucrative market opportunities for data center cooling services by the end of forecast period. In Latin America, Brazil has the largest modular data center. This data center was opened in November 2017 and is mainly used for storing government-related data. The Middle East and Africa is projected to exhibit steady growth in the data center cooling market during the forecast period.
“Key Industry Players to Focus on Strategic Partnerships and Expansion of Product Portfolio in the Market”
Schneider Electric is among the leading players in the data center cooling market. The product portfolio of the company includes various solutions in automation and control, critical power and cooling services, installation systems and control, and others. Schneider Electric’s services for data centers include prefabricated data center solutions, struxureware for data centers (DCIM), data center life cycle services, and others.
Similarly, Emerson Network Power offers critical infrastructure technologies and life cycle services for information and communication technology systems. Emerson holds expertise into an industrial power, infrastructure management and monitoring, power switching & controls, racks & integrated solutions, and other services.
Emerson stepped into the data center infrastructure management market by acquiring two data center infrastructure management providers Aperture and Avocent based in Ohio (U.S.) and Alabama (U.S) respectively. After the acquisition, Emerson developed “Trellis”, an independent data center infrastructure management system. Such partnerships and acquisitions is likely to have a positive impact on the market growth.
The global data center cooling market report highlights leading regions across the world, with an aim to offer a better understanding to the user. Furthermore, the report provides insights into the latest industry trends and analyzes technologies that are being deployed at a rapid pace at a global level. It further highlights some of the growth-stimulating factors and restraints, helping the reader to gain in-depth knowledge about the market.
An Infographic Representation of Data Center Cooling Market
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Value (USD billion)
By Data Center Type
By Cooling Technique
As per our (Fortune Business Insights) study, the global data center cooling market is predicted to reach USD 11.97 billion by 2026, with a CAGR of 8.5% (2019 -2026)
As per our study, in 2018, global data center cooling market value at USD 6.27 billion, and it is anticipated to reach USD 11.97 billion by 2026 at a CAGR of 8.5% during the forecast period (2019 -2026)
Globally, spending on data center cooling solutions is increasing each year. Some of the regions, such as North America, generated a revenue of USD 2.52 billion in 2018 and is expected to generate a remarkable revenue share by 2026
In the data center cooling market, product and data center type are the leading component segments. Increasing demand for economic data centers operations is likely to fuel the demand for effective data center cooling units
The critical driving factor for the data center cooling market is The growing need for optimizing infrastructure budgets to achieve business growth will ensure to expand the market size and demand for flexibility drive infrastructure management in the data center
In the data center cooling market, some of the key players are Schneider Electric, Emerson Electric Co, Vertiv Group Corp, Black Box Corporation, and others. These players are focusing on offering an enhanced portfolio of data center cooling products.
North America is expected to hold the highest market share in the data center cooling market. The U.S. has the highest number of data center facilities making it a significant adopter of data systems in North America.
Asia Pacific is projected to witness a fast growth rate in the data center cooling market. Growing commercial, and corporate data center trends are likely to generate tremendous demand for data center cooling in APAC.
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