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Market Overview

Global data center cooling market was valued at USD 8.74 billion in 2020 and is expected to grow at a CAGR of 10.70% during the forecast period, 2023-2030. This is mainly attributed to increased adoption of mobile devices, cloud computing, and internet of things, among others, which has significantly transformed the application building, deployment, and utilization process. Most of the current IT models are failing to maintain such big packaged applications, thereby propelling the need for infrastructure transformation. This is likely to increase the adoption of data centers, which, in turn, may drive the local economic growth.

Note: Since this is an ongoing report, the market numbers may change by 5-10% in the final stage

Cooling is one of the important aspects for maintaining optimized performance of data centers as the growing computing capabilities are consuming more power, which, in turn, heats the electronic components further. For instance, the U.S. Department of energy estimated that data centers in the U.S. consumed about 70 billion kWh electricity in 2017, which accounted for about 1.8% of the total U.S. electricity consumption.

Market Dynamics

Growing number of data centers on account of rising demand for cloud-based services is expected to drive the global data center cooling market growth during the forecast period 2023-2030. Below figure shows the growth of public cloud computing market from 2008 to 2020.

Source: Forbes

This linear growth in the cloud technology ultimately raises the demand for data centers, thereby fueling the need for effective cooling solutions.

Certain strategies adopted by companies in order to stay ahead in the cloud computing technology is expected to fuel the growth of the data center market. In October 2018, OVH, French cloud computing-based company announced its plan to increase its investment in cloud computing technology with the aim to take on U.S. internet giant companies such as Amazon, Google, and others. The company is expected to invest between USD 4.6- USD 8.1 billion over the next five years.

The rapid increase in the number of mobile, social media users has resulted in the generation of the massive amount of data, which in turn has directed the organizations to invest more efficient infrastructure such as data centers and cloud technology. In September 2018 Facebook announced its decision of investing about USD 1 billion to open a first data center in Singapore.

Intended Audience

• Telecom Service Providers
• Data Center Service Providers
• Cloud Service Providers
• Original Equipment Manufacturers
• Colocation Service Providers

Market Segmentation

Global data center cooling market is segmented by component, technique, and applications. By component, the market is segmented into solution and service. The solution is further segmented into chilling unit, air conditioner, cooling tower, control system, economizer, liquid cooling system, others. The service is further segmented into installation and deployment, maintenance and support, and consulting. The liquid-based cooling is expected to grow faster at a CAGR of 10.96% during the forecast period, 2023-2030. Current financial service workloads are requiring high-performance CPU and GPU. This has increased the power consumption and at the same time excessive heat generation, thereby opting the data center managers to look for effective alternatives such as air-based cooling.

Based on cooling technique, the market is segmented into rack/row cooling and room-based cooling. Row/Rack based cooling is projected to achieve the highest growth as it provides cooling facility precisely to the targeted devices, thereby offering both efficiencies and achieving economic gains.

On the basis of application, the market is segmented into IT and Telecom, BFSI, retail, energy and utility, colocation, healthcare, and others. The IT and Telecom sectors are expected to hold a major share of the market by 2026 owing to increased penetration of big data and cloud-based technologies. In terms of data center cooling, IT and Telecom sectors are projected to grow at a CAGR of 11.08% during the forecast period.

Regional Analysis

With 40% share, North America dominated the global data center cooling market in 2020 and the region is likely to continue dominating at a CAGR of 10.94% during the forecast period 2023-2030. This growth is mainly attributed to huge presence of colocation service providers such as Equinix, AT &T and others in the countries such as the U.S. and Canada.  Moreover, increasing data center leasing activities in Northern Virginia and growing demand from large number of cloud users are expected to propel the market growth. Apart from this, gradually shifting workloads towards hosting companies that offers colocation, cloud, and other services is expected to shape the Canada data center cooling market.

The adoption of cloud-based services is rapidly growing as it offers cost reduction in non-critical mission areas, which fuels the demand for data centers in the country. According to the U.S. Department of Commerce, the data center market in Mexico accounted for _~USD 2 billion and is expected to grow by 30% till 2023.

Asia Pacific is expected to emerge as the fastest growing region in the global market owing to increasing demand for the data center from the 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 significant leadership position in cloud computing technology.

Moreover, rapidly increasing number of mobile users, efficient smartphone technology, and favorable mobile plans are expected to alleviate the demand for data center cooling market. Favorable government policies in various countries have also favored the demand for data centers, which, in turn, is expected to propel the market growth. For instance, in Indonesia, the government regulations number 82 makes it mandatory for business firms conducting electronic transactions to store their personal data in data centers in the country.

Growing adoption of cloud technology in the Middle East and Africa is expected to drive the growth of the data center cooling market during the forecast period 2023-2030. According to Cisco’s Cloud Index, by 2020, MEA cloud traffic is expected to witness highest growth rate of 41% in the coming years. The expansion strategy such as IT/Telco partnership is also expected to play a considerable role in the growth data center. Equinix has partnered with the Emirates Integrated Telecommunication that includes a data center in the UAE Emirate of Dubai. This data center is utilized to run as colocation site for carriers, content providers, financial enterprise and others

Recent Developments

In Oct, 2022 Meta Plans Shift to Liquid Cooling for its Data Center Infrastructure Meta’s vision of an immersive metaverse will require powerful hardware to process the artificial intelligence (AI) to create these digital worlds. The massive data centers that support the metaverse will feature lots of liquid cooling.

At today’s Open Compute Summit, Meta introduced a new AI computing platform, along with updates to its Open Rack and a roadmap for a gradual shift to a water-cooled AI infrastructure. The company plans to use cold plates to provide direct-to-chip cooling for AI workloads on its GPU servers, and is preparing several designs for managing the temperature of supply water as rack power densities increase.