Data Center Cooling Market Growth: Impact of OTT Platforms and Cloud Services on Demand

The global data center cooling market was valued at approximately USD 18.65 billion in 2023 and is projected to experience substantial growth, with a compounded annual growth rate (CAGR) of 16.8% anticipated between 2024 and 2030. This growth is largely driven by the increasing demand for energy-efficient data centers, which is expected to create significant opportunities for expansion within the market. Numerous key players are positioning themselves for growth, capitalizing on the favorable outlook linked to the surge in data generation and the rising necessity for data centers worldwide. Given that data centers consume considerable amounts of power, they generate substantial heat, thus necessitating efficient cooling solutions.

Additionally, the rising popularity of over-the-top (OTT) platforms and streaming services has led to a dramatic increase in data volumes, which is likely to further elevate demand. The rapid expansion of cloud services, the growing importance of big data analytics, and the increasing prevalence of connected devices are driving organizations to invest more in the development of new data center facilities. These factors are expected to significantly enhance the demand for data center cooling systems, correlating directly with the growth in the number of data center facilities globally. Post-pandemic spending on IT infrastructure is also paving the way for both new and existing data center facilities to expand around the world. Furthermore, the emergence of software-based data centers is contributing positively to market growth by providing enhanced automation capabilities.

Gather more insights about the market drivers, restrains and growth of the Global Data Center Cooling Market

The shift towards digital transformation during the pandemic has further increased the need for data center facilities that can offer scalability, security, and flexibility. As investments in new data center facilities rise, the outlook for the data center cooling industry remains positive. However, challenges such as the need for specialized infrastructure and the high costs associated with both establishing and maintaining these data center solutions may impede industry growth. Additionally, issues related to cooling during events like power outages and the need to reduce carbon emissions are expected to present challenges for the sector. The pandemic significantly impacted this market, as workforce shortages and limited investment resources disrupted the production and sales of data center cooling technologies.

To address these challenges, key companies and governments have adopted new safety protocols aimed at enhancing practices within the industry. As technology continues to evolve, the sales rates in the industry have improved, effectively targeting the necessary audience. Data centers are critical hubs for IT infrastructure across various sectors, including manufacturing, banking, financial services and insurance (BFSI), retail, and healthcare. The need to manage extensive data volumes while providing robust networking capabilities is a primary driver of data center investments in these sectors. Given that data centers generate a significant amount of heat, efficient cooling solutions are crucial for maintaining operational continuity and preventing outages or system malfunctions. Thus, data center cooling solutions are essential to the functionality of any data center facility.

Segmentation Analysis

Component Insights

In 2023, the solutions segment represented the largest share of the market. Data center cooling solutions enable businesses to maintain optimal temperatures and ensure the efficient operation of data centers. These solutions are often employed to pre-cool air, particularly during warmer weather conditions, thereby supporting the segment's growth.

The services segment is projected to witness the highest CAGR from 2024 to 2030. Data center operators are increasingly utilizing cooling services, such as power distribution units, to accommodate the rising demand for data storage and related services, including data backup, archiving, and managing authentication and authorization processes. This trend is expected to drive the segment's expansion.

Solution Insights

The air conditioning segment accounted for more than 30% of the total revenue in 2023. Air conditioners are favored by most end-users because they provide continuous protection while reducing energy costs. High-density data storage and analysis generate significant heat, and air conditioners help maintain appropriate temperature levels to ensure data centers operate effectively. Additionally, air conditioners function as heat exchangers, regulating room temperatures in sensitive IT environments.

The precision air conditioning segment is anticipated to grow at a CAGR exceeding 18% from 2024 to 2030. Advances in technology, alongside the development of energy-efficient units, are expected to drive demand for precision air conditioners. These units provide continuous operation, precise humidity control, improved air distribution, and automated load control for more efficient cooling.

Services Insights

The installation and deployment segment led the market in 2023, accounting for the highest revenue share. The increased installation of liquid-based heat removal systems significantly impacts the performance of climate control systems, driving this segment's growth. Higher-density installations are influencing IT power planning, and the inclusion of various coolants and fan installations in services facilitates design optimization. When optimization is strategically combined with deployment, cooling systems can function efficiently without overheating, minimizing environmental impact.

The maintenance service segment is expected to experience substantial growth from 2024 to 2030. Maintenance services for data center cooling allow businesses to rapidly expand their infrastructure, manage power consumption, and increase storage capacity. This segment supports the seamless integration of modular designs, offering companies the flexibility to adapt their cooling systems in response to evolving technological requirements. Innovations in areas such as liquid cooling technologies and direct-to-chip cooling techniques for enhanced thermal management are anticipated to drive continued advancements in the maintenance service segment.

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