The data center cooling market is anticipated to reach USD 21037.75 Million by 2027| North America rules the market with more than 40% of the share – Bonafide Research

The creation and consumption of data are constantly growing due to the invention of mobile technology like smart-phones and tablets, along with enhancements in mobile networks and Wi-Fi. As per the research, there are 4.95 Billion internet users in the world today. The total number of internet users across the globe grew by 192 Million in past 12 months that accounts for more than 500000 new users each day. On average, each day around 2.5 quintillion bytes of data are created and that pace is accelerating with the growth of the Internet of Things (IoT). IoT is the convergence of the digital and physical worlds that has emerged over the past few years as one of the fundamental trends underlying the digital transformation of business and the economy across the globe. This emerging trend implies towards the increasing amount of data created, captured, copied and consumed. In 2020, the amount of data created and replicated reached a new high. Over the last two years alone 90% of the data in the world was generated. World’s leading search engine Google now processes more than 40,000 searches every second which is approx. 3.5 Billion searches per day. As per the report, every human generates 1.7 MB data per day.

For storage and managing those data, companies have introduced an entity called “Data Center”. The data center is a dedicated space used to house computer systems and associated components, such as telecommunications and storage systems where computing facilities and networking equipment are located and centralized. In general, any entity that generates or utilizes data has the necessity for data centers on some level. These entities can include government agencies, educational bodies, financial institutions, retailers and social networking services such as Facebook and Google. They are responsible for collecting, storing, process, and distributing large amounts of data. They are also responsible for networking, data backup and as well as recovery. These centers also host websites, manage e-mails, social media, instant messaging services, cloud storage applications, e-commerce transactions and many other tasks required in any online activities. Even online gaming communities required data centers to manage their online activities.

Modern data centers are technologically complex, and keeping them running safely and efficiently requires continual close monitoring and management. Data centers are required a lot of energy to perform various tasks. To obtain smooth operations in the data center, all the IT equipment should be working efficiently. They generate too much heat while computing the data, to reduce the heat and maintain the temperature in the data center; an effective cooling system is required. Already, data centers use an estimated 200 TWh (terawatt-hours) energy each year. The recommended temperature for data centers is between 70 and 75°F (or 21 and 24°C). Data centers may have to keep temperatures lower than recommended depending on atmospheric stratification. Data center overheating can result in loss of data and productivity. To overcome this threat, data center cooling system is highly required. As the name suggests, data center cooling means to control the temperature inside data centers to reduce heat and humidity. In addition to that, data center cooling system can also improve data center energy efficiency. Proper data center cooling techniques allow servers to stay online for longer. Organizations and enterprises require high processing power to acquire robust performance and improved cooling efficiency to obtain enhanced level of automation. Major market players across the globe are concentrating on producing cost-effective cooling solutions.

According to the research report, “Global Data Center Cooling Market Outlook, 2027” published by Bonafide Research, data Center Cooling market is expected to reach more than USD 21 Billion by 2027. It is expected to expand at a compound annual growth rate (CAGR) of more than 11% for 2022-2027. Increasing infrastructure for data centers across the globe has accelerated the needs for data cooling equipments due to high amount of heat produced by the data center. Leading cloud service providers are witnessing a significant increase in consumer data, exacerbating the demand for hyper-scale data centers in the global market. Major Company’s operators are highly investing in innovative data center cooling technologies to maintain ideal and efficient operating conditions. The Data Center Cooling Market is primarily, segmented by component which are solution and services. Data center solutions refer to the products and services required to form and maintain a data center. Products include IT apparatus (servers, storage systems, routers, firewalls etc) with supporting infrastructure for physical data centers (cooling systems, generators, cabling and batteries etc). On the other hand, data center services refer to all the supporting components which are necessary for the proper operation. That includes all the implementation, maintenance and operation of a data center. Among these two components, data center solution segment is anticipated to lead the global data center cooling market due to higher adoption of effective cooling solutions and equipments across the globe.

Global data center cooling solution market is segmented into various product types that include air conditioning, chilling units, cooling towers, economizer, liquid cooling and control systems etc. Among these types, air conditioning and liquid cooling segments are expected to occupy highest market share during the forecast period. They are expected to acquire more than 50% of market share by 2027. Lower maintenance cost and enhanced performance are driving the market growth for these segments. Total shipments for the air conditioning segment fluctuate every year that generally falls between 3.5 and 6 Million units according to the research. Currently, less than a third of global households are expected to own an air conditioner. In prominent countries like United States and Japan, more than 90% of household have air conditions. Moreover, increasing demands for this segment is expected to boost the market growth for data center cooling solutions.

On the other hand, liquid cooling segment is anticipated to rise with higher CAGR of more than 16% by 2027. The liquid cooling system is passing liquid continually through the passages in the engine block. Which is powered by the water pump, and the coolant is pushed through the engine block. The heat that comes from the components is transferred to the coolant, which is circulated and cooled to continuously dissipate the heat. Because liquid cooling can conduct heat better than air, it can handle a data center's growing densities more effectively, helping to accommodate compute-intensive applications. These factors are directing towards the significant market growth for liquid cooling segments. Chilling units and cooling towers are also taking active participation to propel the market growth for data cooling solutions. Higher maintenance cost for these segments is expected to be a major challenge for developers and manufactures across the globe. In service component, Installation & Deployment service have largest market share and dominating the same in future as well.

North America region is expected to lead the global market with holding more than 40% market share by 2027. Owing to technological advancements and recent developments are projected to boost the data center cooling market growth across the region. In 2021, North America had approximately more than 400 Million internet users. From the research it has been estimated that more than 85% of adults in North America use the internet, either irregularly or frequently. In North America, with businesses realizing the dynamism of the data, they are moving from their traditional resources to well-equipped data centers to achieve better data management. Data centers have become top priority across the region to measure up their various industries and enterprises. They have to operate 24/7 efficiently to process huge chunks of data. In North America, there are more than 2000 data centers present in prominent countries. Rising number of data centers across the region with emergence of 4G/5G networks along with features like energy efficiency, low cost and reduced overall IT costs are driving the North America data center cooling market.

The United States of America is projected to have more than 85% of market share by 2027. In 2020, investments in over 45 hyper-scale data center projects of more than 15 megawatts capacity and cryptocurrency facilities have been implanted across the country. Rising cloud facility in the United States of America also directs towards the increasing need for data storage system. The USA operators are looking for efficient solutions to reduce CAPEX (capital expenditures) and OPEX (operating expenses), conserve data center space, and reduce the power consumption of cooling units.

In Europe, internet penetration has been calculated to be more than 87%. From the research, it has been estimated that there are more than 1300 data centers present in 23 countries of Europe region. Europe manufactures are introducing innovative solutions to remain in the competition for data center cooling solutions. For instance, in July 202, STULZ GMBH introduced a temperature and humidity control system that is precisely built for handling air and cooling systems in large and hyper-scale data centers. Due to widespread of incorporation of integrated systems in various industries including high-performance automobiles, the overall market is expected to accelerate. According to European Automobile Manufacturers Association (EAMA), sales of self-driving cars would increase by around 10% by the end of 2021 compared to 2020. Increasing digitization in the automobile industry has fuelled data volume, driving the need for innovative data center cooling solutions across the region. In addition to that, Asetek collaborated with Hewlett Packard Enterprise (HPE) in Europe to deliver company’s premium data center liquid cooling solutions which is high performing and density optimized facility to target higher performance computing and artificial intelligence across the region.

Asia-Pacific region has become one of the most agile developing data centers market. Currently, there are more than 490 data centers across the region. Urbanization among various developing countries in Asia-Pacific region is expected to increase data generation across various industries in the region. In addition to that, China is anticipated to dominate the Asia-Pacific data center cooling market by holding highest market share of more than 35% during the forecast period. China is accounted to influence the world in internet consumption. China comprises more than 710 Million internet users, according to CNNIC (China’s Internet Network Information Center). According to Huawei, the data center demand across the country is projected to increase by 3 to 10 times by 2030. On the other hand, India is estimated to grow with highest CAGR during the forecast period. India is on the verge to become a digital economy as they are many progressive government policies to make huge investments in the country.

Latin America accounts for more than 10% of the total internet users across the world. This is expected to continue growing due to increasing use of smart-phones, tables and laptops across the majorly of population. From the research it has estimated that approximately 59% of the people living in Latin America had internet access in 2018, increased from 36% in 2016. Currently, Chile is accounted to be the country with highest share of people using internet (more than 80%). In Latin America, Skanska has developed eOPTI-TRAX which is a new innovative data center cooling technology. It is able to reduce expenditure from the cooling system processes. In addition to that, several governments in Latin America offer tax intensives and dedicated zones for data center infrastructure. For instance, Chile aims to provide intensives for the growth of data centers in Patagonia. On the other hand, Columbia has free trade zones such as Bogota Free Trade Zone to promote data centers and data center cooling solutions. March 2021, Microsoft announced that new zones are available in Sao Paulo as part of its ‘More Brazil’ plan. Microsoft has expanded its cloud services across the region with comprehensive plan to enhance Brazil’s growth, sustainability and employment opportunities.

Higher emergence of cloud computing technology coupled with government initiatives across the Middle East & Africa has boosted the demands for data center and data center cooling techniques. For instance, UAE government has introduced diverse projects including Smart Dubai and Smart Abu Dhabi to achieve higher economic growth. In addition to that, internet penetration in the region is calculated to be nearly 77%. With that, Saudi Arabia has introduced its ‘Vision 2030’ objectives which have led the technology giants like Google, Microsoft and IBM to set up data centers across several countries in Middle East & Africa region.

Global data center cooling market is further segmented into several industries vertical including BFSI (Banking, Financial Services and Insurance sector), IT and Telecom, research & academic, government & defense, retail, energy, manufacturing and health care etc. Among these industry verticals, IT & Telecom segment is projected to lead the data center cooling market due to higher penetration of technology enabled devices globally. In addition to that, rising emergence of smart hospitals due to Covid-19 pandemic has boosted the demands for data storage systems in healthcare segment which in turn, will create higher market growth for data center cooling system. Based on the type of cooling, Global data center cooling market is segmented into three cooling types including room-based cooling, raw-based cooling and rack-based cooling. Among these types, room-based cooling type is expected to acquire higher market share during the forecast period. Due to least use of pipes and ducts compared to other cooling types, this segment is anticipated to maintain large market share. In addition to that, energy efficient cooling is one of the major driving factors for room-based cooling in the global market. Based on the data center type, market is categorized into three types including large data center, enterprise data center and mid-sized data center. Among these types, enterprise data center is expected to lead the data center cooling service type by holding more than 40% of market share during the forecast period.

Rising awareness about carbon and GHG (greenhouse gas) emissions have fuelled the market growth with the introduction of green data center initiatives. As more data is generated every day, companies are in search of ways to store and process data with minimal environmental impact. A couple of years ago, sustainable practices and going green were considered to be a forward-thinking approach. But with increased awareness of worldwide energy needs, the severity of climate change, and the impact of carbon footprint, they are required, now more than ever. In general, a green data center is a sustainable data center that uses energy efficiency technologies. Computer systems, mechanical equipment, lighting, and electrical systems are designed to ensure maximum energy efficiency to reduce environmental impact. Key examples of green data center initiatives include waste management, adopting alternative energy technologies, using low-emission materials, and several others.
Several vendors have released products and software that support the green data center initiatives. For instance, in February 2021, Atos and HDF Energy announced their plan to develop a complete end-to-end long-term solution to supply data centers with green hydrogen generated by renewable energy. Under this plan, Atos will design and provide the hardware, software, and integration services that use electricity produced by green hydrogen. Artificial intelligence (AI) will support the solution to predict the data center’s power consumption needs and adapt to green hydrogen accordingly. In another interesting example, an important breakthrough in green data center management came from Microsoft, wherein the company shared that underwater data centers are reliable, practical, and support sustainable energy usage. In the summer of 2020, the firm reeled up a containerized data center that was submerged 117 feet underwater back in spring 2018. Also, in January 2022, GRC (Green Revolution Cooling) announced a multi-year collaboration with Intel. This tie-up is more focused on empowering the data center industry to moderate the environmental impact due to digital infrastructure.

Implementing energy savings strategies within data centers will be a huge must for companies soon. In addition, integrating innovative technologies such as AI and ML into green data center initiatives will ensure a safer environment. With several companies ensuring to be carbon neutral in another 20-30 years (such as Amazon and Microsoft), going green is aggressively becoming more of a necessity and less of a suggestion.

Impact of COVID-19

The Covid-19 pandemic had significant impact on the spending on data center; hence it is also impacting the data center cooling market. It has been a disruption felt across the world in almost all industries, particularly severe in the IT & telecom sector and various data center projects across the world during the first six-eight months of 2020 have taken a significant hit. Most IT companies had put their data centers’ expansion or construction on the back burner in 2020, until the market recovered from the negative impacts of pandemic. Because of the lockdown regulations implanted by government, many production plants had witnessed temporary halt in the processes. However, work from home scenario has helped this market by implementing change in consumer preference. Remote working, online classes and staying at home are some of the significant factors for the higher adoption of consumer electronics across the globe. These factors are expected to fuel the global data center cooling market growth during the forecast period.