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The data center precision air conditioning (AC) market size is forecast to increase by USD 1.41 billion, at a CAGR of 9.75% between 2023 and 2028. Market growth in the data center sector is driven by several key factors such as the rapid expansion of data center construction, heightened emphasis on reducing operational expenses (OPEX), and growing demand for efficient cooling solutions. The surge in data center construction underscores the escalating demand for digital storage and processing capabilities, driven by the proliferation of cloud computing and digital transformation initiatives across industries. Simultaneously, there is a pressing need to optimize OPEX, prompting investments in energy-efficient technologies, automation, and scalable infrastructure solutions. Additionally, the rising demand for effective cooling solutions addresses the challenge of maintaining optimal operating conditions while minimizing energy consumption and environmental impact. These trends collectively propel market growth by fostering innovation in facility design, management practices, and sustainability initiatives within the data center industry, catering to evolving technological requirements and environmental considerations. Our report examines historic data from 2018 to 2022, besides analyzing the current market scenario.
Market Forecast 2024-2028
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The market share growth of the in-row cooling segment will be significant during the forecast period. In-row cooling deployment comprises a heat exchange coil. This heat exchange coil uses chilled water as a cooling medium, and the chilled water is supplied by the external chiller system. The shifting preference toward in-row cooling, owing to high-density IT requirements, will drive market growth.
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The in-row cooling segment was valued at USD 914.15 million in 2018. In-row-based cooling solutions provide an advantage over the conventional room-based approach as the former can be tailored to the density needs of specific rows. Row-based cooling solutions also improve the efficiency of hot-aisle/cold-aisle rack layouts. In addition, they remove hot air from the hot aisle and supply cold air in the cold aisle, promoting top-to-bottom temperature uniformity. In addition, the growth of the row-based cooling solutions segment is driven by growing investments in data centers in India. For instance, in April 2020, Google announced a plan to invest USD400 million in a cable connecting India and Italy via Israel. Therefore, the growing number of data centers is expected to drive the growth of this segment market during the forecast period.
Based on product, the market has been segmented into crac units and crah units. The crac units segment will account for the largest share of this segment.? CRAC units are a fundamental component of data center cooling infrastructure, playing a pivotal role in maintaining the optimal operating conditions for IT equipment. Moreover, with the proliferation of cloud computing, edge computing, and the increasing reliance on data-intensive applications, the need for precision cooling solutions is likely to grow. Data center operators will continue to invest in CRAC units to maintain the high availability and reliability of their IT infrastructure, thereby driving the growth of the market in focus in this segment during the forecast period.
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APAC is estimated to contribute 39% to the growth by 2028. Technavio’s analysts have elaborately explained the regional trends, drivers, and challenges that are expected to shape the market during the forecast period. The market in North America is expected to witness a moderate growth rate, owing to the switching of enterprises from hardware-based services to software-based services and the increasing establishment of data centers in the region. Precision air conditioning systems will be adopted by data centers under construction and those that will be renovated. Many data center operators in the US have identified the benefits of precision air conditioners through their use in their facilities. In the US, the total data center energy consumption accounts for around 1.5%-2% of the nationwide electricity consumption.
Therefore, there is a high demand for energy-efficient cooling solutions. Such factors are expected to increase the need for effective data management and investments in new data center facilities, which are expected to drive the demand for precision air conditioning systems in the region during the forecast period.
In the realm of data centers, ensuring optimal performance and reliability in mission-critical facilities is paramount. With the rising demand for efficiency, water-based and air-based cooling systems play pivotal roles in maintaining the ideal environment for IT equipment and precision cooling. As consumers demand seamless connectivity, data centers, bolstered by satellite and fiber optic lines, are expanding rapidly, particularly in remote areas. To address challenges like network latency and operational expenses, telecommunications operators are increasingly turning to facility automation and modular data center development. Technologies such as precision air conditioning and immersion cooling are revolutionizing cooling systems, while advancements in artificial intelligence and machine learning optimize power usage effectiveness in both traditional and hyperscale data centers, marking a transformative era in data center cooling technologies. Our researchers studied the data for years, with 2023 as the base year and 2024 as the estimated year, and presented the key drivers, trends, and challenges for the market.
Many countries in the world are affected by the paucity of power. Tier-4 data centers are integrated with the latest technologies such that they offer close to 99.99% uptime and support uninterrupted business operations. Precision air conditioners are designed for continuous operations. The components installed in these air conditioners ensure redundancy and zero downtime. In case of any component failure, the precision air conditioning system is not affected. Consequently, these air conditioners are suitable for Tier-4 data centers. Technological advances have led to the introduction of innovative cooling solutions that can adapt to extreme climatic conditions
In addition, free cooling techniques and cooling systems, such as precision air conditioners, are designed to deliver maximum efficiency and reduce power consumption which may have a positive impact on the market growth. Such factors will drive the global market in focus growth in the forecast period.
Generally, data center cooling solutions make use of water and other coolants for transmitting the heat out of the facility. The compressors facilitate the transmission of heat out of the data center, which results in the cooling of the data center environment. Economizer-based cooling is a free cooling technique that is highly suitable for data centers that are operated in colder regions. In colder conditions, the heating, ventilation, and air conditioning (HVAC) system compressor is shut down, and cool air from outside is used to cool the data center. Precision cooling systems use external cold air and supply it to the racks installed in data centers. With the emergence of free cooling techniques, the adoption of precision systems has increased. These systems can offer optimal operating temperature and humidity for cooling IT equipment by reducing mechanical cooling.
Moreover, water economizers can be used to reduce compressor running time and pump use. These economizers are used in conjunction with cooling towers, heat exchangers, or dry coolers. Economizers also form a part of the green data center equipment, which is expected to witness strong market demand in the forecast timeframe. Such factors are expected to drive the market growth during the forecast period.
There are many reasons for enterprises to consider data center consolidation projects, including cost reduction and acquisition of enterprises. Consolidation helps with cost savings of up to 30%, reduction in power consumption by 55%, enhanced security by up to 35%, and improvement in efficiency by 50%. In the US, the federal government is involved in the consolidation of data centers to reduce operational costs and shift investments toward an efficient computing platform. Servers are being consolidated to work on a single piece of computing hardware as virtualization boosts the operating efficiency of data center IT infrastructure. Virtualization is a standard technique applied to IT infrastructures such as servers, storage, and network equipment, which reduces a data center's CAPEX and OPEX.
However, the increase in data center virtualization leads to consolidation and reduces the number of data centers which can negatively impact market growth. This can hinder the sales of cooling infrastructure and reduce the worldwide data center footprint. Therefore such factors can hinder the market growth during the forecast period.
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
AAON Inc - The company offers data center precision air conditioning solutions such as SB Series, SA Series, and M2 Series.
We also have detailed analyses of the market’s competitive landscape and offer information on 20 market companies, including:
AAON Inc., Aermec S.p.A., Airedale Air Conditioning Ltd., Black Box Ltd., CONTEG spol sro, CSPM SDN BHD, Daikin Industries Ltd., Delta Electronics Inc., Eaton Corp. Plc, Hidem Group, Huawei Technologies Co. Ltd., Kaltra GmbH, Lennox International Inc., Midea Group Co. Ltd., Mitsubishi Electric Corp., Rittal GmbH and Co. KG, Schneider Electric SE, Shenzhen Kstar Science and Technology Co. Ltd., STULZ GmbH, and Vertiv Holdings Co.
Technavio report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies companies into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Companies are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments
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The market is witnessing robust growth driven by the increasing demand for mission-critical facilities to support the ever-expanding digital landscape. With consumers relying heavily on satellite and fiber optic lines, the need for efficient cooling solutions in computer rooms becomes paramount. The emergence of modular data center development addresses the challenges of scalability and adaptability faced by telecommunications operators in remote areas. Innovations in power and cooling systems, coupled with advancements in cooling technologies such as immersion cooling and water-based cooling, are enhancing Power Usage Effectiveness (PUE) and reducing network latency. As hybrid cloud adoption and AI usage continue to surge, the market is poised for further expansion, driven by the relentless pursuit of efficiency and sustainability in server room environments.
Additionally, the industry is witnessing robust growth, driven by the increasing demand for facility automation and the expansion of mission-critical facilities such as hyperscale data centers. Operators like Digital Realty and Compass Datacenters are pioneering advancements in AI and machine learning to optimize IT administration and enhance energy efficiency. As social media usage and public cloud adoption soar, the need for in-row and in-rack cooling solutions becomes paramount to ensure optimal performance. Traditional data centers are transitioning towards water-based cooling and liquid coolants to mitigate heat energy and waste while maximizing cubic feet per minute airflow and sensible heat ratio management. The integration of building management systems facilitates centralized control, offering precise temperature regulation for both indoor and outdoor units, shaping the future of data center cooling technology.
The data center cooling market is experiencing a significant shift propelled by the escalating demand for efficiency and reliability in mission-critical facilities. As hyperscale data center operators leverage artificial intelligence to optimize operations, the focus on in-row and in-rack cooling solutions intensifies to meet stringent tier standards. Innovations such as water-based cooling and water-cooled racks offer superior performance and energy efficiency compared to traditional air-based cooling methods. With centralized cooling systems, both indoor and outdoor units are integrated seamlessly, ensuring precise temperature regulation for enhanced reliability. The marekt landscape depends on the In rack cooling, Tier standard, Water based cooling, Air based cooling, Water cooled racks. As internet users continue to rise, the necessity for efficient cooling solutions becomes imperative, driving the adoption of advanced technologies across cabinets, inside unit, and outdoor unit alike, shaping the future landscape of data center cooling.
Market Scope |
|
Report Coverage |
Details |
Page number |
171 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 9.75% |
Market Growth 2024-2028 |
USD 1.41 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
9.34 |
Regional analysis |
North America, APAC, Europe, Middle East and Africa, and South America |
Performing market contribution |
APAC at 39% |
Key countries |
US, China, Australia, UK, and Germany |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
AAON Inc., Aermec S.p.A., Airedale Air Conditioning Ltd., Black Box Ltd., CONTEG spol sro, CSPM SDN BHD, Daikin Industries Ltd., Delta Electronics Inc., Eaton Corp. Plc, Hidem Group, Huawei Technologies Co. Ltd., Kaltra GmbH, Lennox International Inc., Midea Group Co. Ltd., Mitsubishi Electric Corp., Rittal GmbH and Co. KG, Schneider Electric SE, Shenzhen Kstar Science and Technology Co. Ltd., STULZ GmbH, and Vertiv Holdings Co. |
Market dynamics |
Parent market analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the market forecast period. |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Deployment
7 Market Segmentation by Product
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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