Data Center Cooling Market Analysis and Forecast 2024-2034: Growing Emphasis for Retrofit Data Centers - ResearchAndMarkets.com

The "Data Center Cooling Market - A Global and Regional Analysis: Focus on Product, Application, and Country-Level Analysis - Analysis and Forecast, 2024-2034" report has been added to ResearchAndMarkets.com's offering.

The global data center cooling market is projected to reach $107.13 billion by 2034 from $21.50 billion in 2023, growing at a CAGR of 15.72% during the forecast period 2024-2034. The growth in the global data center cooling market is expected to be driven by the increasing number of data centers and government initiatives for energy-efficient data centers. The need to address the water scarcity issue has further resulted in the adoption of data center cooling technologies.

The global data center cooling market is poised for significant growth, driven by the increasing number of data centers and government initiatives promoting energy-efficient solutions. As data centers generate substantial heat, advanced cooling systems are essential for maintaining optimal temperatures and preventing equipment failure. The market encompasses various cooling methods, including air, liquid, and free cooling systems, each suited to different data centers, such as hyperscale, colocation, and edge facilities. Demand for efficient cooling technologies is intensifying with the rise of data-intensive applications such as artificial intelligence (AI), big data, and cloud computing. Liquid cooling solutions, particularly direct-to-chip and immersion cooling, are gaining traction due to their superior heat management and sustainability benefits. This market is expected to increase, with companies investing in innovative cooling technologies to reduce operational costs and environmental impact.

North America has the maximum number of data centers in the world. This is due to enormous industrial and commercial enterprises that have significantly impacted the demand for data centers in the region. North America is followed by Asia-Pacific and Europe in terms of market size. North America is expected to have a massive demand for data center cooling technologies due to numerous data centers and the growing demand for innovative technologies and spending in the region.

IT and Telecom to Dominate the Global Data Center Cooling Market (by End-Use Industry)

The IT and telecom segment is the dominating application segment. With new technologies such as 5G, IoT, virtual and augmented reality, and artificial intelligence, the telecommunications industry is evolving to cater to huge data processing. As a result, telecom data centers are also transforming to handle high data volume and low latency needs. The banking, financial services, and insurance (BFSI) segment is expected to anticipate the highest growth rate due to digitization, which involves utilizing the most cutting-edge technology to boost data center usage, thereby augmenting the data center cooling solutions.

Market Driver: Increasing Number of Data Centers and Spendings

• The significant rise in data generation across various industries has spurred the demand for data servers and centers. As of January 2021, CloudScene data showed nearly 8,000 data centers globally, with six countries hosting the majority, i.e., the U.S. (33%), the U.K. (5.7%), Germany (5.5%), China (5.2%), Canada (3.3%), and the Netherlands (3.4%). About 77% are in OECD member states, and 64% are in NATO countries.
• In 2021, the U.S. data center market absorbed 493.4 megawatts (MW), a 31% increase from 2019 and a 50% rise from 2020, according to CBRE. Jones Lang LaSalle Inc. (JLL) reported 885.7 MW absorption across 14 domestic markets, a 44.3% year-on-year increase driven by expansions from major cloud and tech companies.
• The outlook for data centers remains optimistic due to the surging use of streaming services, virtual collaboration tools, and remote work, leading to record demands in 2020 and 2021. Major operators saw increased enterprise-level demand from the technology, financial, and healthcare sectors. The accompanying figure highlights the rise in data center spending from 2012 to 2023.

Market Challenge: High Investment Costs for Non-Conventional Cooling Systems

• While it costs money to buy the equipment needed to cool and power the servers, the recurring costs start to add up. Standard data centers operate at around 20C to 22C to optimize performance. When running a data center in a hot climate, up to 33% of the energy consumed is dedicated to operating the cooling systems and infrastructure, and electricity costs may contribute more than 50% of the operating expenses. The spread-out locations and lack of infrastructure make edge data centers tougher to cool. For example, real estate and electricity may cost much more for an edge site in a busy urban area. As of 2021, an investigation revealed that between 30% and 55% of the total energy is used to cool the IT equipment in data centers.
• To maximize performance, typical data centers run at temperatures between 20C and 22C. When operating a data center in a warm climate, up to 33% of the energy used is just for running the infrastructure and cooling systems, and electricity costs may make up more than 50% of operating costs. It is more challenging to cool edge data centers due to their dispersed locations and lack of infrastructure. For instance, a busy urban edge site might have much higher real estate and electricity costs.

Market Opportunity: Growing Emphasis for Retrofit Data Center

• As processor capacities grow, they generate more heat, increasing the thermal loads in colocation data centers due to higher packing densities. Additionally, continuous workloads necessitate replacing or upgrading servers and devices with the latest designs. According to Moore's Law, electronic devices become obsolete within years. Many data centers built in the past decade seek modernization to enhance efficiency and incorporate AI, IoT, and other digital advancements. Consequently, periodic upgrades are essential to prevent devices from becoming obsolete and to maintain optimal performance.
• Retrofitting data centers might gradually become a persuasive idea for operators over the forecast period 2024-2034. The factors driving retrofitting of data centers are expanding IT densities, new technological advancements, aging hardware, the need for better cooling systems, and the need for energy-efficient and power-saving technologies. When retrofitting a data center, a rating of 1.8 PUE is acceptable, and 1.6 PUE is attainable. Retrofitting can also help provide powerful new layers of security, intelligence, and automation. Therefore, even cloud or hyperscale data centers built recently or sooner are being retrofitted to address the abovementioned requirements.

Key Market Players and Competition Synopsis

Key players in the global data center cooling market analyzed and profiled in the study involve cooling solution providers, including market segments covered by distinct product kinds, applications served, and regional presence, as well as the influence of important market tactics employed. Moreover, a detailed competitive benchmarking of the players operating in the global data center cooling market has been done to help the reader understand how players stack against each other, presenting a clear market landscape.

Additionally, comprehensive competitive strategies such as partnerships, agreements, and collaborations will aid the reader in understanding the untapped revenue pockets in the market.

Some prominent names established in the data center cooling market are:

• Vertiv Group
• Schneider Electric
• Asetek
• Submer
• Munters
• ZutaCore
• Coolcentric
• Midas Immersion Cooling
• Motivair Corporation
• PEZY Computing
• Alfa Laval
• Condair Group
• Fujitsu
• Danfoss
• Modine Manufacturing Company
• Boyd
• Johnson Controls International plc.
• Carrier

Key Attributes:

Key Topics Covered:

1 Markets

1.1 Trends: Current and Future Impact Assessment

1.1.1 Trends Shaping Data Center Cooling Market

1.1.2 Increase in Data Requirements

1.1.2.1 Increasing Rack Power Density - New Data Center Reality

1.1.2.2 5G Services to Drive Exponential Growth in Data Centers

1.1.3 Growth in Demand for Environment-Friendly Cooling Systems

1.1.3.1 Carbon Neutrality

1.1.3.2 Utilization of Renewable Energies

1.1.3.3 Green Initiatives by Government Body

1.2 Evaporative Cooling Market for Data Center Overview

1.3 Supply Chain Overview

1.4 Research and Development Review

1.5 Ecosystem and Ongoing Programs

1.6 Adoption of Cooling by Data Center Age

1.6.1 Retrofitting and Brownfield Projects

1.6.2 Green Field Projects and New Installation

1.6.3 Historical Analysis of Cooling Equipment Deployment (2018-2022)

1.6.4 New Data Center Trends toward Adoption of Cooling Technology Type (2023-2027)

1.7 Market Dynamics Overview

1.7.1 Market Drivers

1.7.1.1 High-Efficient Cooling Systems

1.7.1.1.1 Emerging Technologies Promote Cost-Effectiveness

1.7.1.1.2 AI-Assisted Automatic Cooling Control

1.7.1.1.3 Power Usage Effectiveness (PUE) Optimization with Economic Cooling Solutions

1.7.1.2 Increasing Number of Data Centers and Spendings

1.7.1.3 Thermal Energy Recovery Conversion from Data Centers

1.7.1.4 Water Usage Effectiveness Driving Adoption of Alternate Cooling Solutions

1.7.1.5 Retrofitting to a Free Cooling Data Center

1.7.2 Market Restraints

1.7.2.1 High Investment Costs for Non-Conventional Cooling Systems

1.7.2.2 Technical Challenges to Cooling Systems

1.7.2.2.1 Air and Free Cooling Systems Adaption Complexities

1.7.2.2.2 Reliability Limitations with Immersion Liquid Cooling

1.7.2.3 Lack of Synergy between Hardware and Cooling Vendors

1.7.2.4 Infrastructure Development Gap between End Users and Data Centers

1.7.3 Business Opportunities

1.7.3.1 Growing Emphasis for Retrofit Data Center

1.7.3.2 Data Center Infrastructure Management for Power Management

1.7.3.3 Increasing Number of Distributed or Edge Data Centers

1.8 Key Start-Ups in the Global Data Center Cooling Market

2 Application

2.1 Application Segmentation

2.2 Application Summary

2.3 Global Data Center Cooling Market (by End-Use Industry)

2.4 Global Data Center Cooling Market (by Data Center Type)

3 Products

3.1 Product Segmentation

3.2 Product Summary

3.3 Global Data Center Cooling Market (by Solution)

3.3.1 Air Cooling

3.3.2 Liquid Cooling

3.3.3 Free Cooling

3.4 Global Data Center Cooling Market (by Rack Density)

3.4.1 Low Rack Density (1-4 kW)

3.4.2 Medium Rack Density (5-9 kW)

3.4.3 High Rack Density (Above 9 kW)

4 Regions

5 Competitive Benchmarking & Company Profiles

• Vertiv Group Corp.
• Schneider Electric
• Asetek, Inc.
• Submer
• Munters
• ZutaCore, Inc.
• Coolcentric
• Midas Immersion Cooling
• Motivair Corporation
• PEZY Computing Inc.
• Alfa Laval
• Condair Group
• Fujitsu
• Danfoss
• Modine Manufacturing Company
• Boyd
• Johnson Controls International
• Carrier

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