The global data center cooling market size was valued at USD 8.6 billion in 2018 and is expected to register a CAGR of 13.5% over the forecast period. Factors, such as increasing need for energy-efficient data center facilities, growing investments by managed service and colocation service providers, and increasing construction of hyperscale data centers are expected to drive the market. Additionally, the emergence of cloud technology, big data, and Internet of Things (IoT) has enabled organizations to invest in new centers to maintain business continuity. This is also expected to boost the market development.
In June 2018, Digital Realty Trust, Inc., a company known for providing colocation, data center, and interconnected solutions, announced the establishment of its third center in Toronto, Canada. According to the company, the new center will be catering to the growing needs of emerging startups, as well as large technology companies focusing on digital transformation. Through this initiative, the company expects to strengthen its foothold in the Canadian market, where the demand for reliable and secure IT solutions is growing. Infrastructure convergence is also among the key factors driving the market.
In addition, rising demand for improved mobility, operational efficiency, security, and bandwidth will fuel the industry development. Software-based centers are also contributing to the market expansion by providing an improved level of automation. Rising shift toward digital transformation through connected technology and IoT has led to the need for a data center ecosystem that can ensure quick deployment, scalability, flexibility, security, and availability. This shift is paving way for the development of innovative system that can also be cost-effective, highly agile, and software-defined.
Organizations operating in various industries, such as manufacturing, education and research, and chemicals generate and store large amounts of data. They also need to solve complex calculations and problems that can be related to any natural phenomenon, such as climate change, space explorations, and weather forecasting. In such areas, IT professionals have to deal with financial and web data, applications, and databases that require high processing power along with enhanced performance, speed, and cooling efficiency. All these requirements are fulfilled by data center cooling, which is expected to have a positive impact on the market.
The product segment has been segregated into air conditioners, precision air conditioners, chillers, air handling units, and others. The air conditioners segment held the largest share of over 30.0% in 2018 and is expected to witness significant growth over the forecast period. While analyzing and storing data for effective decision-making, densely packed racks generate a large amount of heat. As such, air conditioners enable organizations to maintain an adequate temperature level and ensure the proper functioning of systems.
Additionally, air conditioners are heat exchangers that maintain the required level of room temperature in a sensitive IT environment. Meanwhile, the precision air conditioners segment is estimated to register the fastest CAGR during the estimated period. Technological advancements coupled with the development of energy-efficient units are expected to propel the demand for precision air conditioners. Moreover, they offer benefits, such as continuous operation, precise humidity control, demonstration of better air distribution, and automatic control of individual AC loads for efficient cooling.
The application segment has been segregated into telecom, IT, retail, healthcare, BFSI, energy, and others. The retail segment is estimated to grow at a CAGR exceeding 13.0% over the forecast period. This can be attributed to the extensive use of Image Processing Verification Tools (IPVT), smartphones, social media, and tablet computers, which has, in turn, led to the increasing volume of data.
The telecom segment captured the largest market share in the past and is expected to register the highest CAGR over the forecast period. Rapidly expanding IT & telecommunication industry across the globe is also expected to fuel the demand for data center cooling market. Additionally, emerging telecommunication infrastructures require equivalent storage facilities, which is expected to propel demand for data center cooling solutions.
The containment segment has been segregated into raised floor with containment and raised floor without containment. The raised floor with containment segment has further been divided into Hot Aisle Containment (HAC) and Cold Aisle Containment (CAC). The segment is expected to witness a substantial CAGR owing to the increased adoption of HAC and CAC methods. The HAC segment is expected to register the highest CAGR owing to the presence of enhanced return airflow management option.
Hot aisle containment reduces mixing of air and ensures higher electrical cost savings and increased economizer hours. The CAC segment held the largest market share in 2018 and is likely to maintain the trend in future. Cold aisle containment is cost-effective and can be efficiently implemented in an existing raised floor data center, which will boost the segment development.
On the basis of structure, the market has been categorized into rack-based, row-based, and room-based cooling. The room-based cooling segment held the largest share exceeding of the overall market in 2018. The room-based cooling is a historical approach implemented by various operators. It ensures enhanced cooling capacity and continuous mixing of hot and cold air to maintain adequate temperature level and prevent the occurrence of hot spots.
The row-based segment is expected to witness a healthy CAGR over the forecast period. High and variable density IT equipment generates heat in the data center environment that cannot be addressed by the room-based approach.
Using the room-based approach for high-density IT equipment results in unpredictable and inefficient cooling. While row- and rack-based solutions ensure scalability, enhanced cooling, and reduced power consumption. As a result, these approaches are expected to emerge as the most preferred solutions for next-generation data centers by both large and small enterprises.
The North America region led the global market in 2018 and is likely to maintain its dominance in the years to come as it is the largest market for technology-based solutions. It is also anticipated to emerge as a strong region in the global economy, especially in the implementation and development of new technologies. Moreover, presence of prominent companies, such as Facebook, Amazon, Inc., and Google, Inc., in the region is likely to contribute to its growth.
The Asia Pacific market is projected to gain prominence over the forecast period as the application scope is expected to increase in the telecom segment. This may be attributed to the increasing number of service providers for external IT infrastructure services who operate and manage critical business information and applications.
The market is highly consolidated and characterized by high competition with the presence of major global players, such as Air Enterprises, Asetek, Coolcentric, Hitachi, Ltd., Netmagic Solutions, Fujitsu Limited, and Schneider Electric. These companies particularly focus on enhancing the product quality by adopting advanced and innovative cooling techniques to enhance their market presence.
For instance, in 2014, Amazon discovered a new method of utilizing the heat generated by its data centers to heat its buildings located across the street. Referred to as hydronic heat, the method involves the transfer of heat generated by centers through a network of water pipes running under the street to the company’s central heating system.
Once all the heat is dissipated, the water, which is no longer warm, travels back to the data center to absorb the heat and contribute to the cooling process. Similarly, in June 2018, Microsoft announced that an eco-friendly data center has been lowered into the sea waters near Orkney Island, Scotland, as part of Phase 2 of Project Natick, which envisages checking the feasibility of having systems on the seabed.
The shipping container-sized prototype happens to be a self-contained server room sitting on a rock shelf, 117 feet below the water surface, and has been deployed to test the cooling efficiency and internet connectivity. The project, which was carried out jointly by the company and incumbents of the marine industry, is also aimed at developing an underwater system that can deliver cloud services to coastal cities.
Base year for estimation
Actual estimates/Historical data
2014 - 2017
2019 - 2025
Revenue in USD Million and CAGR from 2019 to 2025
North America, Europe, Asia Pacific, Latin America, and Middle East & Africa
U.S., Canada, U.K., Germany, Nordic Countries, Eastern Europe, China, India, Japan, South East Asia, Australia, Brazil, and Mexico
Revenue forecast, company share, competitive landscape, growth factors, and trends
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This report forecasts revenue and volume growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the global data center cooling market report on the basis of product, application, containment, structure, and region:
Product Outlook (Revenue, USD Million, 2014 - 2025)
Precision Air Conditioners
Air Handling Units
Application Outlook (Revenue, USD Million, 2014 - 2025)
Containment Outlook (Revenue, USD Million, 2014 - 2025)
Raised Floor with Containment
Hot Aisle Containment (HAC)
Cold Aisle Containment (CAC)
Raised Floor without Containment
Structure Outlook (Revenue, USD Million, 2014 - 2025)
Regional Outlook (Revenue, USD Million, 2014 - 2025)
South East Asia
Middle East & Africa
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