Global Data Center Cooling Market - Forecasts from 2023 to 2028

The data center cooling market is estimated to witness a CAGR of 10.08%, to grow from US$13.441 billion in 2021 to US$26.323 billion by 2028.

Organizations are increasing their investments in constructing new data center facilities because of the ubiquity of cloud services, the growing importance of big data, and the rising penetration of connected devices. Consequently, the need for cooling solutions is expected to increase in direct proportion to the growth of data center facilities worldwide.
Therefore, the increased demand for energy-efficient data centers and projected future investments are expected to open up new opportunities for future growth. Several managed, and cloud service providers in the sector are preparing to expand to satisfy the rising demand. However, it is projected that the development of the data center cooling business will be constrained by the requirement for specialized infrastructure and high investment costs for setting up and maintaining these data center systems.

A notable rise in data center deployments can be attributed to the increased need for extra storage to accommodate the enormous amount of data.

A rise in data centers results in higher energy consumption. This is expected to increase demand for energy-efficient cooling techniques in the near future. Infrastructure investment is changing drastically due to technological breakthroughs like Industry 4.0 and the Internet of Things. Using cutting-edge data center cooling services will probably help optimize power use, making data center operations more energy-efficient and lowering operational expenses.

Further, to maximize performance, typical data center temperatures range from 20 to 22 degrees Celsius. Up to 33% of the energy is used to run cooling equipment and systems when running a data center in a hot climate, and power prices can make up more than 50% of operational expenditures. Moreover, with the right solutions, operating expenses can anticipate a stunning 96% reduction in cooling costs and a 45% reduction in overall electrical costs. This has resulted in increased innovation in technologically advanced data center cooling solutions in the global market.

In addition, cloud storage providers like Microsoft, AWS, and Google are increasing their storage capacity to support more efficient workflow on the cloud.

These companies finance extremely large-scale transactions. In June 2022, Google joined Microsoft and Meta in using A.I. to help manage their data centers because their new tensor processing units (TPUs) produced more heat than their previous data center cooling systems could handle. The cooling system is essential in the I.T. and data center industry due to the requirement for enhanced, high-quality cooling alternatives that are more efficient than the traditional air-cooling solution.

During the forecast period, the air conditioners segment is expected to hold a considerable market share driven by increasing demand for efficient cooling solutions in data centers.

By solutions, the data center cooling market is analyzed into air conditioners, chillers, economizers, cooling towers, and others. The growing demand for data storage and processing capabilities, driven by factors such as cloud computing, the Internet of Things (IoT), and big data analytics, lead to expanding and construction of new data centers, fueling the demand for efficient air conditioning systems. Additionally, modern data centers have higher power densities due to the increasing number of servers and equipment. Air conditioners play a crucial role in maintaining optimal temperature and humidity levels to ensure the reliable and efficient operation of these high-density environments.

The healthcare segment has witnessed significant growth.

Data centers are crucial in storing and processing vast amounts of medical and patient data, such as electronic health records (EHRs), medical images, and research data. As these data centers generate significant heat, efficient cooling systems are required to maintain optimal operating conditions and prevent equipment failures.

Growing data traffic in the region has boosted the demand for data centers in North America, acting as a driving factor for the data center cooling market in the region.

In the United States specifically, there has been a surge in data center construction and expansion. Data Center Frontier reports that major technology hubs in the U.S., such as Northern Virginia, Silicon Valley, and Dallas-Fort Worth, have experienced significant data center growth. Cities like Chicago, Phoenix, and Atlanta have also seen a rise in data center development.

Besides growing data traffic, favorable investments by the U.S. government in data center cooling technology are another driving factor for market growth. For instance, in September 2022, the U.S. Department of Energy announced a US$42 million investment to develop energy-efficient data center cooling solutions.

Market Segmentation:

By Solutions

• Air Conditioners
• Chillers
• Economizers
• Cooling Towers
• Others

By Enterprise Size

• Small
• Medium
• Large

By End Users

• Colocation Services Provider
• Cloud Service Providers
• Enterprises

By Industry Vertical

• Banking and Financial Services
• Manufacturing
• Healthcare
• Communication and Technology
• Energy
• Education
• Government
• Media and Entertainment
• Others

By Geography

• North America
• United States
• Canada
• Mexico
• South America
• Brazil
• Argentina
• Others
• Europe
• Germany
• France
• United Kingdom
• Italy
• Spain
• Others
• Middle East and Africa
• Saudi Arabia
• UAE
• Others
• Asia Pacific
• China
• India
• South Korea
• Japan
• Thailand
• Taiwan
• Others