Data Center Cooling Market Share, Trends & Analysis 2031

Report Description

Data Center Cooling Market Outlook 2031

The Global Data Center Cooling Market size was valued at USD 11,421.7 Million in 2022 and is projected to reach USD 27,365.9 Million by 2031, expanding at a CAGR of 10.5% during the forecast period, 2023 to 2031.

Data center cooling refers to the process of maintaining optimal temperature and humidity levels within a data center environment to ensure the reliable and efficient operation of critical IT infrastructure. Data centers house a large number of servers, storage systems, networking equipment, and other hardware components, and they generate significant amounts of heat.

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This heat leads to equipment malfunctions, reduced performance, and even permanent damage if left unchecked. Therefore, effective cooling strategies are essential to keep the data center running smoothly. The primary objective of data center cooling is to remove the heat generated by the IT equipment and to maintain a consistent temperature range within the recommended operating limits.

Typically, data centers are designed to operate within a temperature range of 18 to 27 degrees Celsius (64 to 80 degrees Fahrenheit). Additionally, the relative humidity is maintained between 40% and 60% to prevent static electricity buildup and equipment corrosion.

Macro-Economic Factors

Technological Advancement

The technological advancement in data center cooling involves improved accuracy, efficiency, and functionality of the data center cooling. This results in improved efficiency and productivity. Government initiatives are rising for technological advancement in data center cooling systems.

For instance, in May 2023, The U.S. Department of Energy (DOE) announced the funding of around USD 40 Million for 15 projects for developing energy-efficient and high-performance cooling systems for data centers. These 15 projects are present at universities, national labs, and businesses, which are seeking for reducing the energy required for data center cooling systems.

Several leading players in the market are developing advanced data center cooling systems in order to meet the growing demand for efficient cooling of data centers for reducing carbon emissions for beating climate change.

For instance, in 2021, Microsoft tested a two-phase immersion cooling system. Electronic parts are immersed in a bath of a dielectric heat-transfer liquid during two-phase liquid immersion cooling. In 2020, Asetek and Hewlett Packard Enterprise (HPE) collaborated to deploy their top-tier data center liquid cooling solutions in HPE Apollo Systems. These systems are density-optimized and high performing to meet the needs of artificial intelligence (AI) and high-performance computing (HPC).

Data Center Cooling Market Dynamics

Market Driver- Growing Adoption of the E-commerce and Social Media Platforms

The data center cooling market is being driven by rapid development in e-commerce, increased use of social media, and preference for over-the-top (OTT) platforms. Data centers provide numerous benefits to e-commerce businesses. Global e-commerce enterprises are highly investing in data centers. Rising e-commerce industry at rapid pace has created massive demand for the data centers.

According to the UNCTAD, global e-commerce industry sale reached around USD 26.7 trillion in 2019. E-commerce companies process vast amounts of data to optimize their online operations. Local data centers provide an extraordinary boost to e-commerce data capabilities, as well as improved customer experience and compliance with impending legislation.

Meta is currently developing over 7 million square feet of data center capacity in the US. Similar expansion is taking place in other regions of the world. TikTok’s also opened the data center in Europe in 2022, while Meta invested around USD 1.1 billion hyperscale data center project in Spain to supplement existing facilities in Sweden and Ireland.

These hyper-scale data center hubs are being built by social media firms, as they require large amounts of computer capability, which necessitates massive amounts of power and cooling, thus, driving the data center cooling market.

Market Driver- Strict Government Rules and Regulations For Energy Efficient Data Centers

The data center cooling market is regulated in many countries to promote sustainable practices. For example, the US Environmental Protection Agency (EPA) has developed energy efficiency regulations for data centers, which have aided in driving cooling technology innovation. This has resulted in the development of specialized cooling systems that address the unique requirements of massive data centers.

The European Union's Code of Conduct for Data Centers includes guidelines for enhancing data center energy efficiency, including cooling systems. Europe has strict regulations regarding data center energy efficiency laws and standards. For instance, governments and businesses in Europe are heavily investing in the research and development of innovative cooling technology.

This has resulted in the development of innovative and highly efficient cooling systems, such as liquid cooling, that can help to minimize data center energy use. Furthermore, the UAE is investing in renewable energy sources such as solar electricity, which may be used to power energy-efficient cooling systems. Data center cooling system consumers around 40% of the electricity in the data center.

According to Energy Government Organization, California’s data center project resulted in the annual saving of 2.3 million kWh by the use of the energy efficient data center.

Market Restraint- High Initial and Maintenance Costs

The initial cost required for the installation of a data center cooling system is a major restraint for the market. For instance, a report by Data Center Dynamics found that the average cost of a data center cooling system ranges from USD 2 million to USD 10 million, depending on the size of the facility and the complexity of the cooling system.

This is a significant expenditure for many businesses, particularly small and medium-sized enterprises (SMEs) that do not have the financial resources to make such a significant capital expenditure. The high initial expenditure required for installation as well as concerns over maintenance costs are hindering the growth of the data center cooling market.

Furthermore, a complex infrastructure and expertise are required for maintaining the cooling system. Intricate plumbing, maintenance, and potential risk associated with water leakage adds to the cost of the system, restraining the data center cooling market.

Market Opportunity- Adoption of Emerging Technologies

The emergence of big data, cloud technology, and the Internet of Things (IoT) has permitted organizations to spend in new data centers, which is creating opportunities for the data center cooling market. Several companies forced to shift towards digital transformation with the rising adoption of the IoT and connected technologies.

This has increased the need for an advanced data center ecosystem that ensures scalability, security, flexibility, quick deployment, and availability. For instance, in 2022, CloudHQ collaborated with Dominion Energy, ComEd, and Vizsla Ventures LLC to develop new campuses with IT opportunities. The company intended to begin the construction of new data centers in Illinois and Chaska in the US.

Furthermore, Albertsons IT company also disclosed the adoption of Microsoft cloud storage solutions from Microsoft. The company planned to utilize the cognitive analytics, data science, and AI capabilities of Microsoft. Such developments among leading players are anticipated to lead to the opening of new data center facilities, which is expected to drive the demand for data center cooling systems in the coming years. All such factors are creating lucrative opportunities for the data center cooling market.

Scope of The Data Center Cooling Market Report

The report on the global Data Center Cooling Market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Data Center Cooling Market Segment Insight

The global Data Center Cooling Market is segmented on the basis of type, component, end-use industry and region.

In terms of Type, Data Center Cooling Market is segmented into Liquid Cooling and Air Cooling. The air cooling segment is expected to dominate the market in 2022. Air cooling is adopted by end-users to meet the need for 24/7 protection by reducing energy costs.

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On the basis of component, the Data Center Cooling market is segmented into Solution and Services. The solution segment is expected to hold a substantial share of the market during the forecast. Expansion of data center facilities increases the adoption of cooling systems among users, thus boosting the segment during the forecast period. Moreover, the rising demand for eco-friendly solutions among consumers is creating opportunities in the market.

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Regional Outlook

Based on regions, the Data Center Cooling Market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. The market in the Asia Pacific is growing at a rapid pace during the forecast period, due to the rising trend of high-performance computing. The growing construction of green data centers is propelling the market in the region.

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Key Benefits for Industry Participants & Stakeholders

• In-depth Analysis of the global Data Center Cooling Market

• Historical, Current, and Projected Market Size in terms of Value and Volume

• Potential & Niche Segments and Regions Exhibiting Promising Growth Covered

• Industry Drivers, Restraints, and Opportunities Covered in the Study

• Recent Industry Trends and Developments

• Competitive Landscape & Strategies of Key Players

• Neutral Perspective on Global Data Center Cooling Market