Data Center Liquid Cooling Market to Reach $11.84 Billion by 2027

07 Nov 2023

Cooling is an essential part of data center maintenance. Data center cooling enables the servers and networking devices to run constantly without disruption. Liquid-based cooling solutions have more heat removal capabilities and can reduce a data center's power consumption by over 50%.

The United Nations Sustainable Development Goals (SDGs), the increase in water scarcity, and the number of edge, colocation, and hyper data centers have led to a widespread adoption of data center liquid cooling techniques. Moreover, the paradigm shift toward high energy-consuming applications such as gaming, blockchain mining, and HPC applications and the deployment of AI, big data, and machine learning will mandate the adoption of liquid cooling solutions for smoother operations in the years ahead.

According to data insights from BIS Research, the global data center liquid cooling market was valued at $2.79 billion in 2021, which is expected to grow with a CAGR of 27.67% and reach $11.84 billion by 2027.

Data Center Liquid Cooling Market Segmentation

End-use industry, data center, solutions, and region segment the data center liquid cooling market. IT and telecom, driven by advanced technologies such as 5G, IoT, VR, AR, and AI, dominate the application segment. It is followed by the growing digitized banking, financial services, and insurance (BFSI) sector. Moreover, Indirect liquid cooling dominates the energy efficiency segment, while direct liquid cooling methods, such as direct-to-chip and immersion, are rising with innovations.

According to regional analysis, North America, especially the U.S., is expected to remain a dominating market player throughout the forecast period. Robust technological advancements and established market players have supported it. Other regions like Europe and Asia-Pacific contribute significantly to the global data center cooling market.

Global Need: A Pathway to Sustainable Data Centers

Transitioning to sustainable data centers, often called green data centers, is crucial to combating global warming and reducing carbon emissions. These eco-friendly centers employ  liquid cooling technology, maintaining a Power Usage Effectiveness (PUE) below 1.4 and minimizing carbon footprints.

Achieving sustainability involves strategic steps. Firstly, cloud migration optimizes operations by leveraging public (e.g., AWS, Azure) or private cloud environments, ensuring scalability, flexibility, and cost-efficiency. Data Center Infrastructure Management (DCIM) tools also provide real-time monitoring, managing power usage, temperature, and assets, aiding in efficient resource allocation.

Data optimization technologies, including compression and deduplication, enhance storage performance, while converged and hyper-converged infrastructures consolidate resources, reducing energy consumption. These technologies find applications across various environments, from on-premises data centers to cloud-based setups.

Crucially, adopting renewable energy sources like solar, wind, and hydroelectric power lessens environmental impact. Companies such as Telia company, Flexential, Green Mountain, and Interxion embrace this approach, making sustainability a cornerstone of their data center operations. By integrating these strategies, organizations pave the way for environmentally responsible and energy-efficient data management.

Key Market Trends and Opportunities

The data center liquid cooling market is witnessing trends such as increasing data requirements, rack density, and 5G service, driving exponential market growth. Moreover, emerging technologies, such as AI-assisted automatic cooling control, growing data centers and spending, and water usage effectiveness (WUE), are leading to adoption of alternate cooling solutions.

Blockchain technologies and crypto mining operations boost demand for high-performance computing and energy-efficient cooling methods. Government initiatives and research programs enhance innovations in liquid cooling technologies. Transition to cloud connectivity, integration with emerging technologies like AI and IoT, and advancements in satellite communication and 6G connectivity create diverse prospects, making the market dynamic and promising for businesses.

The Future of Data Center Liquid Cooling

Liquid cooling technologies are rapidly replacing conventional air cooling in data centers. Moreover, the growing demand for sustainable technologies and ongoing policy changes, such as the Europe Union Green Deal, fuel the market's growth. Leaders can tackle cost and standardization-related challenges to gain a competitive edge in the data center liquid cooling market.

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