Europe Data Center Cooling Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

The European Data Center Cooling market is expected to register a CAGR of 9.23% during the forecast period. The growing cloud computing among SMEs, government regulations for local data security, and growing investment by domestic players are some of the major factors driving the demand for data centers and cooling markets in the region.

Key Highlights

• Cooling technologies are usually selected based on the data centers' geographical location. As companies regularly seek to mitigate costs, energy-efficient cooling methods are being considered the potential alternatives to traditional cooling methods. Furthermore, the growth would be fuelled by edge computing adoption and the increase in IoT devices.
• Development in IT Infrastructure in emerging European countries such as Hungary, Greece, Poland, and Turkey would increase the construction of hyperscale data center facilities with over 50 MW power capacity. It would feed the data center cooling systems needed in the market. The United Kingdom, Germany, and France recorded the highest data centers across Europe, and industry players can target these countries to invest in their new technologies. Also, they can form partnerships with upcoming data center organizations to cater to their requirements at a competitive price, which may aid the growth of the European data center cooling market over the forecast period.
• The cooling systems are responsible for almost 40% of the data center power consumption. Companies are trying to tackle this issue by setting up Green data centers. The growing trends toward deploying green data centers for storing, managing, and distributing information helped many software companies reduce energy consumption and the total energy cost. For Example, Green technologies, such as Immersion4 in combination with AI, are changing how data centers operate to make them more sustainable with efficient energy usage and low carbon footprint. Such Green Data centers' emergence drives the demand for Cooling units in the region.
• The data center cooling systems require a high initial investment to set up and maintain the cooling systems, which could restrain the market. However, many local vendors and market players are coming up with innovative solutions by modifying the existing data centers at a low cost to reduce the cost of setting up a new unit. Additionally, reduced carbon emission and cooling issues during power outages could hamper the growth of the European Data Center Cooling Market.
• The COVID-19 pandemic impacted the market owing to the lockdowns, shortage of devices, and supply chain disruptions to set up new data centers and update the existing data centers. On the other hand, there is a massive rise in the data volume and Mobile data usage in European countries, anticipated to boost the setup of data centers across the European region. It is thereby propelling the market growth over the forecast period. Also, government support is projected to stimulate the development of the data center cooling market over the forecast timeframe.

Europe Data Center Cooling Market Trends

Retail Industry is Expected to Hold Significant Market Share

• In the retail industry, the increasing users in e-commerce and online spending is creating an enormous volume of Big Data, expected to propel the need for data storage, security, and reduced latency. It is thereby boosting the region's expenditure and the number of data centers. Rapid development in the retail sector and industry 4.0 trends are also responsible for the data center's rise, enhancing the cooling device's need.
• Due to the increasing number of online users, foreign retail companies regularly invest in European countries to expand their storage capacity, increasing internet traffic and the load on data centers. For instance, JD.com, a Chinese e-commerce giant, recently confirmed a strategic entry into the European retail sphere. Due to stringent regulations in the region, foreign companies investing in the area may store their data locally for smooth transitions regarding the data protection law. As a result, the usage of data center cooling systems is expected to increase, thereby boosting the market growth in the region over the forecast period.
• Notably, according to the E-commerce Foundation, the European B2C e-commerce turnover is expected to expand by approximately 13% to reach USD 621 billion due to the high internet penetration in the region. It may increase the Big Data volume, leading to more data centers and cooling systems in the area.
• Further, according to Eurostat, Italy and Poland witnessed tremendous growth in e-commerce users. It led to the generation of a vast amount of data, thereby strengthening storage requirements. As a result, the European data center cooling market is expected to expand over the forecast period.

United Kingdom Accounts for the Largest Market Share

• Companies in the UK are rigorously investing in new data centers. It is expected to positively impact the market growth in the region over the forecast period. For instance, Interxion, a European colocation and networking company, commenced its third data center in London, expanding carriers and CDNs for consumers. This development is expected to propel the cooling system utilization, fostering the market growth.
• Moreover, H&M, a fashion retailer in the country, plans to integrate a cooling and heat recovery system in its new data center in Stockholm. The excess heat generated from the data center is reused by Fortum Värme, an energy company, by distributing it to customers (2,500 modern residential apartments at full load) throughout the city.
• The UK recorded the highest number of data centers across Europe. Industry players can target these countries to invest in their new technologies. Also, they can form partnerships with upcoming data center organizations to cater to their requirements at a competitive price, which may aid the growth of the European data center cooling market over the forecast period.
• Green and renewable solutions, such as green electricity, water reclamation, zero water cooling systems, recycling, and waste management, are being used to build the most sustainable data centers. Notably, growth in Big Data volume across European countries, including the United Kingdom, is expected to increase the need for low-latency and high-capacity data centers, thereby boosting cooling system utilization. According to Science Direct, data center energy use might account for 2.13% of worldwide electricity supply over the forecast period.
• Further, companies are regularly trying to reduce their operational cost across their verticals, increasing the AI technology used in data center cooling systems in the country. For instance, Siemens introduced AI-based thermal optimization, wherein the company utilizes Vigilant AI products to enhance cooling systems in data centers.

Europe Data Center Cooling Market Competitor Analysis

The European data center cooling market is fragmented as the benefits offered by the technology and support from the government by imposing efficiency regulations on data centers are expected to help the growth of the data center cooling market directly. Some major market players are IBM Corporation, Fujitsu Ltd., Hitachi Ltd, Hewlett-Packard Enterprise, and Schneider Electric SE. Market penetration is growing with a strong presence of major players in established markets. With the increasing focus on innovation, the demand for new technologies is growing, which, in turn, is driving investments for further developments. Some of the current advancements in the market are:

• In November 2022, Vertiv, a power, precision cooling, and infrastructure management systems manufacturer, launched the Liebert XDU liquid cooling distribution unit in Europe with two available capacities of 450 KW and a model capable of up to 1368 KW. This XDU is designed to be water-efficient and support high-density data centers that run applications such as analytics and machine learning. This XDU system contains controls for varying pump speed and getting the best water flow and temperature and provides alerts if it overflew.
• In September 2022, Schneider Electric and its partner Total Power Solutions designed and delivered a new high-power cooling system to help reduce the power usage of the University College of Dublin's main production data center. The new solution at UCD contains ten independent InRow DX cooling units, which are rightsized to the server load to optimize efficiency.

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