Data Center Cooling Market Analysis by Product (Air Conditioners, Precision Air Conditioners, Chillers, and Air Handling Unit); by Data Center Type (Large, Medium, and Small Scale DC); by Cooling Technique (Room-Based Cooling, Rack-Based Cooling, and Row-Based Cooling); and by Industry (BFSI, IT & Telecommunication, Manufacturing, Retail, and Healthcare) – Global Supply & Demand Analysis & Opportunity Outlook 2023-2035
Buy Now Report ID: 4756 | Published Date: Mar 29, 2023
The global data center cooling market size is estimated to reach ~USD 47 Billion by the end of 2035 by growing at a CAGR of ~11% over the forecast period, i.e., 2023 – 2035. In addition to this, in the year 2022, the market size of data center cooling was ~USD 11 Billion. The growth of the market can be attributed to growth in number of data centers. In the entire world, there are about 7,999 data centers. Approximately 30% of the data centers among them are situated in the US. Hence, the demand for data center cooling is estimated to increase. For electrical and IT equipment in data centers, high temperatures and humidity levels are not ideal. The majority of IT hardware generates heat, which must be swiftly removed in order to maintain peak performance. Therefore, it is expected to boost the growth of the market.
Moreover, there has been growth in data generated all across the world. Global data production is predicted to reach about 462 exabytes per day by 2025. Additionally, the higher data volumes brought on by the increased use of OTT and video streaming services have fueled market growth. Further, the demand for efficient cooling systems for data centers would rise as a result of the rising amount of data produced by online streaming services such Disney+ Hotstar, Hulu, and Netflix. Additionally, the demand for green data center is also estimated to boost which is further estimated to fuel the market growth. Green computing aims to reduce power consumption while increasing the efficiency of the computer and its components, such as processor speed, ram speed, memory, and more.
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Base Year |
2022 |
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Forecast Year |
2023-2035 |
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CAGR |
~11% |
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Base Year Market Size (2022) |
~ USD 11 Billion |
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Forecast Year Market Size (2035) |
~ USD 47 Billion |
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Regional Scope |
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Growth Drivers
Several of the largest data centers in the world could store tens of thousands of IT devices apiece and need more than 99 megawatts (MW) of power capacity, which is equivalent to powering about 79,999 U.S. homes. Hence, with the use of data center cooling the consumption of energy is estimated to be reduced. Increasing data center energy efficiency has many advantages. A sustainable data centers minimizes the facility's effect on climate change, lowers operating costs, makes the most of the capacity already available, conforms with policies and initiatives, and appeals to more clients. Hence, the adoption of cooling system is estimated to increase.
About 4 billion people used the internet as of January 2023, representing approximately 63 percent of the world's population.
Only about 3% of the data generated and consumed in 2020 was preserved across the globe and held until 2021, indicating that just a small portion of this freshly created data is actually kept. The installed base of storage capacity is anticipated to grow, expanding at a yearly average rate of approximately 18% over the projected period from 2020 to 2025, in accordance with the significant expansion of the data volume.
In the US in 2022, cloud services were employed by about 93% of businesses. Yet, the same year in the US, approximately 66% of enterprise infrastructure was cloud-based.
About 85 percent of the world's population would possess a smartphone by 2023, resulting in about 5 billion smartphone users worldwide. This number has increased significantly from 2016, when only about 2 billion users represented approximately 48% of the entire world's population. As people use smartphones more frequently, servers are under more demand to support these devices: The daily activity that is been observe on the phones is really a tiny window into the vast cloud infrastructure that powers all of those apps, photo-sharing services, messages, notifications, tweets, emails, and other services. Hence, the adoption of data center cooling is estimated to increase.
Challenges
The global data center cooling market is segmented and analyzed for demand and supply by industry into BFSI, IT & telecommunication, manufacturing, retail, and healthcare. Out of which, the IT & telecommunication segment is anticipated to garner the highest revenue by the end of 2035. Depending on the size of the business, the IT industry requires hyperscale data centers and on-premise private data storage for its operations. Also, since SaaS providers have multiplied over time, cloud storage has becoming more widely used. For instance, currently, there are about 29,999 or so SaaS businesses operating worldwide. Moreover, the information technology (IT) is made up of sales of IT services and related products by businesses, sole proprietors, and partnerships that use computers, computer peripherals, and telecommunications equipment to store, retrieve, receive, and move data. Computer networking, broadcasting, systems design services, information distribution technologies such as television and telephones, as well as other process-related equipment, are all part of the IT market. This enormous demand necessitates a cooling system in order for the gadgets to function normally, which fuels the global data center cooling market.
The global data cooling market is also segmented and analyzed for demand and supply by data center type into large scale DC, medium scale DC, and small scale DC. Amongst which, the large scale DC segment is anticipated to have a significant growth over the forecast period. A large scale data centers, also known as a hyperscale data centers, is a crucial infrastructure that enables powerful and scalable applications. Large businesses with significant data processing and storage needs are frequently linked to hyperscale data centers. Moreover, large amounts of electricity are used to run servers and cool systems in large scale data centers. Hence, this factor is estimated to boost the demand for data center cooling. In a hyperscale data centers, there are thousands of servers as well as switches, routers, and storage devices. Unfortunately, given the decline in agility and efficiency, it is not practical to monitor and configure these systems manually on a broad scale. Hence, hyperscale data centers typically rely on automation and orchestration to handle operations, such as scheduling, monitoring, and workload delivery, in order to efficiently run large facilities. For instance, a business could use automation systems to allocate resources based on the electricity and cooling that are available. Moreover, all this process heat the data centers which would increase demand for data center cooling.
Our in-depth analysis of the global data center cooling market includes the following segments:
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By Product |
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By Data Center Type |
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By Cooling Technique |
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By Industry |
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The market share of data center cooling in Asia Pacific, amongst the market in all the other regions, is projected to grow by the end of 2035, backed by surge in penetration of internet, along with surge in demand for energy by large scale data centers. Oceania and East Asia had the highest internet penetration in the Asia-Pacific region in 2022, with about 72 percent of the total population using the internet. Moreover, the introduction of 5G technologies as well as cutting-edge technologies such as the Internet of Things, big data, AL & ML, and digitalization are the factors that are driving the Asia Pacific data centers cooling market. Additionally, the southeast Asia usually have tropical type of climate which is further estimated to boost the adoption of cooling system in data centers. Through establishing green data centers that employ free air-cooling systems rather than conventional air conditioners, businesses in the APAC area are attempting to address the issue of GHG emission. Several software companies were able to reduce their energy consumption and overall energy costs owing to the growing trends towards the deployment of green data centers for the management, storing, and distribution of information.
The North America data center cooling market is estimated to be the second largest to grow at the highest share over the forecast period. The growth of the market in this region can be attributed to increasing use of connected devices, simple access to the internet, and falling prices for internet services. This is a result of the rising demand for big data analytics and cloud-based services, including online content such movies, apps, videos, and social media. As a result, cloud-based businesses have expanded the amount of IT space in their data centers. In order to meet their cloud-related needs, various businesses are investigating cloud products and learning about the advantages of data centers services. These developments are having a direct impact on the rise in Internet of Things (IoT) and data needs of the businesses, which is driving up demand for data centers cooling solutions to prevent data centers from overheating and driving the North American data center cooling market to grow during the forecast period.
Additionally, the market in Europe is estimated to have a significant growth over the forecast period, backed by IT infrastructure development in rising European nations including Hungary, Greece, Poland, and Turkey. Moreover, the expanding trend of establishing green data centers for storing, managing, and transferring information has assisted many software firms in lowering their energy use and total energy costs. Hence, this factor is also estimated to boost the market growth in this region.
In order to advance its goal of improving all facets of IT operations across data centers, Hitachi Vantara, a wholly owned subsidiary of Hitachi, Ltd., announced updates to its Smart Data Center solution at NEXT 2018. These improvements were designed to advance businesses in the digital, data-driven business landscape by harnessing the power of data wherever it sits, from the data centers to the cloud and out to the edge.
The new line of Uniflair Chillers with inverter screw compressors for large data centers, which offer the effectiveness, precision, and configurability to adapt to current and future data centers cooling challenges, was just announced by Schneider Electric, the industry leader in digital transformation of energy management and automation.
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.
Author Credits: Abhishek Verma, Hetal Singh
Ans: The major factors driving the growth of the market are growing energy consumption by data centers, rise in use of internet, surge in storage capacity of data, and others.
Ans: cscs scscThe market size of data center cooling is anticipated to attain a CAGR of ~11% over the forecast period, i.e., 2023 – 2035.
Ans: cscs scscHigh investment cost, inefficiency of traditional air-cooling method, and high energy consumption are estimated to be the growth hindering factors for the market expansion.
Ans: The market in the Asia Pacific region is projected to hold the largest market share by the end of 2035 and provide more business opportunities in the future.
Ans: The major players in the market are Airedale International Air Conditioning Ltd., Asetek, Inc., Black Box, Hitachi, Ltd., and more.
Ans: The company profiles are selected based on the revenues generated from the product segment, the geographical presence of the company which determines the revenue generating capacity as well as the new products being launched into the market by the company.
Ans: The market is segmented by product, data center type, cooling technique, industry, and by region.
Ans: The IT & Telecommunication segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities.
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