Global Data Centre Cooling Market Size Analysis Report - Market Share, Forecast Trends and Outlook (2024-2032)

Data Centre Cooling Market Outlook

• The use of data centre cooling in the BFSI sector is anticipated to grow at a CAGR of 13.3% between 2024 and 2032. 
• The Indian market was expected to account for around 4.5% of the market share in 2023.
• European markets such as France and Italy are expected to witness a CAGR of 9.2% and 8.3% in the forecast period. 
• Solution component in the market can exhibit a growth rate of 13.0% between 2024 and 2032.

Data Centre Cooling Market Growth

Data centre cooling refers to a process for maintaining the temperature and humidity of a data centre to ensure the proper operation of machines within the optimum temperature range. It is integral in protecting multiple electronic components found in data centres, including processors, UPS, diesel generators, hard disc drives, DRAMs (dynamic random-access memory) units, MV and LV switchgear, or server racks, among others, which can boost data centre cooling market value.

Energy efficiency and sustainability have emerged as key concerns for data centres. Governments globally are focusing on reducing carbon emissions and achieving sustainable development goals (SDG) related to climate change and renewable energy. Hence, the data centre cooling market growth can be attributed to the growing adoption of solutions that can optimise energy utilisation. Reportedly, data centres use 1% of the world's total energy. Efforts are being made to reduce energy consumption in data centres around the globe, which is fuelling the adoption of data centre cooling systems.

Data Centre Cooling Market Trends

New technologies such as IoT, cloud computing, AI, Industry 4.0, machine learning, and others, are surging the demand for storing the data that is generated on a day-to-day basis. The increasing number of data centres across the world is a significant trend of data centre cooling market.

The development of reliable and cost-effective cooling solutions with improved performance and sustainability profiles by key players is expected to fuel the market demand in the forecast period. Besides, the mainstreaming of immersion cooling, coupled with the increasing workloads of AI and high-performance computing, is anticipated to propel the data centre cooling market demand in the forecast period.

Recent Developments

Schneider Electric, a leader in the digital transformation of energy management and automation, announced the launch of its Critical Power and Cooling Hub in Leeds, UK. This advanced facility aims to offer specialised training for customers, channel partners, and engineers focused on its data centre, power, and cooling solutions, which can boost the growth of the data centre cooling market. The opening is part of the Leeds Innovation Hub in Northern England and represents a major step forward in the rapid expansion of Schneider Electric’s newly created Training program for the UK and Ireland.

Industry Outlook

As per the data centre cooling industry analysis, as AI continues to advance and an increasing number of data centres prioritize AI workloads, analysts predict a rise in power consumption within these facilities. Industry stakeholders agree that as traditional power sources become more expensive each year, many are likely to invest more heavily in alternative energy solutions. Business Standard reports indicated that they anticipate their reliance on renewable energy could reach up to 80 per cent of their overall energy requirements. For instance, the recent surge in power demand in India, which saw a year-on-year increase of 4.4 per cent to 139 billion units in June 2023, coupled with a mere 0.4 per cent growth in power generation capacity during the first quarter of financial year 2024, underscores the pressing need for data centre operators to explore alternative energy sources and models to maintain operational continuity.

Moreover, Advanced Cooling Technologies (ACT) has been awarded two federal subcontracts worth USD 1.1 million for the development of cooling solutions for data centres, which can contribute to the data centre cooling industry revenue. This funding, allocated by the US Department of Energy's Advanced Research Projects Agency-Energy (ARPA-E), is part of the initiative known as Cooling Operations Optimised for Leaps in Energy, Reliability, and Carbon Hyperefficiency for Information Processing Systems (COOLERCHIPS). The objective of this program is to create high-performance and energy-efficient cooling technologies tailored for data centres.

Increasing data generation and technological advancements are supporting the market growth.

• The rise in data generation from cloud computing, AI, IoT, and big data analytics has significantly increased the demand for data centres, driving the need for efficient cooling solutions.
• Modern cooling technologies, such as liquid cooling and free cooling, offer significant energy savings, which appeal to data centres focused on reducing operational costs and carbon footprints, enhancing the growth of the data centre cooling market.
• Data centre cooling systems are integral to maintaining the reliability and uptime of servers, ensuring stable and uninterrupted operation of data centres.
• Continuous advancements in cooling methods, such as immersion cooling and modular cooling systems, enhance efficiency and performance, providing competitive advantages to companies in the market.

High initial costs, complex implementation processes, and dependency on energy supply, may challenge the market growth.

• The high initial investment required for advanced cooling systems can be a barrier for smaller companies.
• Implementation of sophisticated cooling technologies requires significant expertise and time, complicating deployment.
• Data centre cooling systems are heavily reliant on a stable energy supply, making them vulnerable to power disruptions and affecting data centre cooling demand. 
• Potential environmental concerns related to the disposal and recycling of cooling system components can pose challenges.

Growing focus on sustainability, and increased cloud adoption is driving the market demand.

• Increasing focus on sustainability and reducing carbon emissions opens up opportunities for companies to offer eco-friendly cooling technologies, such as free cooling, evaporative cooling, and renewable energy-powered systems.
• As digital transformation accelerates in emerging economies, there is substantial potential for growth in data centre infrastructure and associated cooling systems, particularly in regions like Asia-Pacific and Latin America, which can boost the data centre cooling market opportunities.
• The expansion of hyperscale data centres by major cloud service providers like Amazon, Google, and Microsoft is driving significant demand for efficient and scalable cooling solutions.

Data Centre Cooling Industry Segmentations

Based on component, the market is segmented into solution and services. The market division, based on data centre size, includes large data centre, medium data centre, and small data centre.

By type of cooling, the data centre cooling market segmentation includes room-based cooling and row/rack-based cooling. On the basis of application, the market can be divided into government, BFSI, IT and telecom, and healthcare, among others. The major regional markets for data centre cooling include North America, Europe, the Asia Pacific, Latin America, and the Middle East and Africa.

Data Centre Cooling Market Share by Component

Different data centre cooling solutions available in the market include air conditioning, liquid cooling systems, chilling units, cooling towers, control system, and economiser systems, among others. Liquid-based cooling solutions account a considerable market as they are highly effective in dissipating heat from electronic devices such as USP, hard disk drives, LV and MV, dynamic random-access memory, among others, increasing demand of data centre cooling market. Liquid cooling systems require less space, use less water than other air-cooling technologies, and reduces energy consumption, boosting their usage in data centres.

Competitive Landscape

Schneider Electric SE is a prominent energy and process technology company that is headquartered in Rueil Malmaison, France. It is a leader in energy management and automation solutions, including data centre cooling. It offers end-point to cloud connecting solutions, services, software, and controls for use in homes, data centres, infrastructure, and buildings, among others. With operations in over 100 countries, the company aims to drive digital transformation.

• Innovative Technologies: Focuses on developing advanced cooling technologies, such as liquid cooling and eco-friendly solutions that can increase data centre cooling demand growth.
• Energy Efficiency: Emphasizes energy-efficient cooling systems to reduce operational costs and carbon footprint.
• Integrated Solutions: Offers comprehensive data centre solutions that integrate cooling with power and IT infrastructure management.

Johnson Controls International plc. has established its position as a leader in sustainable, smart, and healthy buildings. With its headquarters in Cork, Ireland, the company boasts one of the most expansive portfolios of building software, technologies, and services. It has presence in more than 100 countries in the world, and its solutions are used in different sectors such as healthcare, manufacturing, and data centre, among others.

• Smart Cooling Solutions: Develop intelligent cooling systems that use AI and IoT for optimized performance and energy savings, increasing data centre cooling market revenue.
• Sustainability Initiatives: Strong focus on sustainability, offering cooling solutions that comply with green building standards.
• Customization and Flexibility: Provides customisable cooling solutions tailored to specific data centre needs, enhancing operational efficiency.

Mitsubishi Electric Corporation is a company that is engaged in the manufacturing of electronics and electrical equipment. It was founded in 1921 and has established its reputation as a leading manufacturer of air conditioners. Its products and solutions are used in different applications such as defence, information systems, and factory automation, among others.

• Advanced Technology: Utilises cutting-edge technology to deliver high-performance and reliable cooling systems.
• Energy-Saving Solutions: Prioritises energy-saving solutions to help data centres achieve lower power usage effectiveness (PUE).
• Global Reach: Leverages its extensive global network to offer robust support and services worldwide, impacting data centre cooling demand forecast.

Daikin Industries Ltd.

Daikin Industries is renowned for its expertise in air conditioning and cooling systems, including for data centres.

• Innovation and R&D: Invests heavily in research and development to create innovative and energy-efficient cooling solutions.
• Wide Product Range: Offers a broad range of cooling products, from small-scale solutions to large industrial systems.
• Sustainability Focus: Committed to sustainability, Daikin provides cooling solutions that reduce environmental impact.

Fujitsu Limited

Fujitsu is a prominent IT services provider in the data centre cooling market, also recognized for its advanced data centre cooling technologies.

• Integrated IT and Cooling Solutions: Combines its IT expertise with cooling solutions to provide comprehensive data centre management.
• High Reliability: Focuses on delivering highly reliable cooling systems that ensure data centre uptime and performance.
• Energy Efficiency: Prioritises energy-efficient designs to support green data centre initiatives.

Other players operating in the data centre cooling market include RITTAL GmbH & Co. KG, Asetek, Inc. A/S, STULZ GmbH, Nortek Air Solutions, LLC., Vertiv Group Corp., Green Revolution Cooling Inc., LiquidStack B.V., Munters Group, and Wakefield Thermal, Inc., among others.

Data Centre Cooling Market Regional Analysis

The Asia Pacific holds a substantial portion of the global data centre cooling market share and is expected to grow at a CAGR of 13.6% in the forecast period due to growing digitalisation in the region. Many countries such as India and China in the region are also focusing on data localisation, leading to a surge in the number of data centres. The markets in India and China are expected to grow at a CAGR of 14.3% and 13.1% between 2024 and 2032. This is also encouraging investments in data centre cooling technology for surging energy efficiency, reducing carbon footprints, and promoting sustainability.

North America also holds a significant market share as the United States is investing heavily in services like cloud computing, data centres, IoT and other technologies. Meanwhile, the market in Canada is expected to grow at a CAGR of 11.2% in the forecast period.