Data Center Power Market Size:
Data Center Power Market size is estimated to reach over USD 40,106.91 Million by 2031 from a value of USD 23,417.22 Million in 2023 and is projected to grow by USD 24,629.30 Million in 2024, growing at a CAGR of 7.0% from 2024 to 2031.
Data Center Power Market Scope & Overview:
Data center power ensures the efficiency and continuity of operations, utilizing electrical infrastructure and systems, which are used in the supply, distribution, and management of power with data centers. Its functions include maintenance of server performance, cooling systems, and backup power, preventing downtime. The advantages range from enhancement of energy efficiency and reduced operational costs to improvement in reliability. The primary end-use industries include information technology, telecommunications, financial services, healthcare, and cloud service providers.
How is AI Transforming the Data Center Power Market?
There is an emerging use of AI in the data center power market, particularly to improve efficiency, optimize energy consumption, and enhance overall power management. AI-powered solutions are being deployed to predict and manage energy demand, optimize cooling systems, and even help integrate renewable energy sources into the power grid that supplies data centers. Moreover, AI can dynamically adjust workloads across different servers and locations to minimize energy consumption while maintaining performance. Thus, the above factors are anticipated to boost the market growth in the upcoming years.
Data Center Power Market Insights:
Data Center Power Market Dynamics - (DRO) :
Key Drivers:
Proliferation of Hyperscale Data Centers Propels Market Growth
The rapid digital transformation and data generation, along with the advancements in cloud computing, lead to massive computational workloads, which can be handled using hyperscale data centers.
To achieve reliability and efficiency in terms of power solutions, power resources including advanced computing systems, networking equipment, and storage facilities are required.
- In May 2023, the accelerated ethernet platform called the NVIDIA Spectrum-X Networking Platform was launched by NVIDIA. This platform combines NVIDIA Spectrum-4, BlueField-3 DPUs, and Acceleration Software, in order to achieve an AI performance that is 1.7x better.
Therefore, an increase in the adoption of hyperscale data centers is leading to the data center power market growth.
Key Restraints :
Complexity in Power System Management Restricts the Market Growth
The availability of various equipment, redundancies, and energy sources makes the process of handling power systems extremely complex in the hyperscale and colocation facilities. Power distribution and monitoring systems which are sophisticated, are required to manage backup systems, PDUs, and cooling technologies, along with a consistent power flow.
Moreover, operational challenges are faced with the integration of renewable energy sources with the existing infrastructure. Thus, the analysis of market trends depicts that the difficulties faced while maintaining and integrating environmentally friendly energy sources are a few of the key restraints to the data center power market demand.
Future Opportunities :
Increasing Focus on Liquid Cooling Technology Promotes New Opportunities
The immense heat produced by advanced data centers cannot be managed with traditional air-cooling methods, especially with the increase in the demand for technologies such as high-performance computing, artificial intelligence, and machine learning applications. The Liquid cooling technology allows the maintenance of optimal temperatures, improvement in power efficiency, and the reduction in the overall environmental impact.
Moreover, it is more effective as a solution, as it offers better heat dissipation, energy efficiency, and lower operating costs.
- In November 2023, , a single-phase liquid solution was announced by LiquidStack for data centers. This leads to the expansion of the company's DataTank product portfolio, providing various advanced liquid cooling solutions.
Hence, the market trends analysis shows that efficiency and the reduction of environmental impact, are the primary factors that offer data center power market opportunities.
Data Center Power Market Segmental Analysis :
By Product:
Based on product, the market is segmented into Power Distribution Units (PDU), Uninterruptible Power Supply (UPS), Busway, and others.
Trends in the Product:
- Improved scalability and reduction of energy losses, along with efficiency and flexible power distribution are achieved with the innovations in busways, including the IoT integration in Smart busway solutions.
- The enhancement in adaptability of modular busways, is due to the seamless integration. To optimize the space usage in the existing data centers.
The Uninterruptible Power Supply (UPS) sector accounted for the largest revenue share of the total data center power market share in 2023.
- The continuous operation during power outages is ensured with the power backup provided by UPS, especially for critical data center systems.
- It ensures data integrity by protecting against power surges, voltage fluctuations, and blackouts.
- With the exponential growth in the demand for modern data centers, the higher power densities and efficiency are supported by the UPS systems.
- In 2023, MegaFlex DPA (Decentralized Parallel Architecture) UPS solutions was launched by ABB India's Electrification business. It is a part of the ABB EcoSolutions™ portfolio, which complies with the ABB circularity framework.
- Therefore, as per the segmental trends analysis, the increased efficiency and reliability of power solutions, places UPS as the largest segment by product in the market.
The Power Distribution Units (PDUs) sector is anticipated to register the fastest CAGR during the forecast period.
- Ensuring the even distribution and reduction of power wastage, various equipment in the data centers were supplied with electrical power using the PDUs.
- The monitoring of power usage is ensured with the integration of PDUs with intelligent systems, to improve energy efficiency.
- The operational efficiency in PDUs is enhanced with the integration of IoT technology, which enables remote monitoring and predictive maintenance.
- In November 2023, a rack power distribution for data centers, Rack PDU G4 was launched by Eaton. It manages power demands for various equipment and facility types, enabling the deployment of a single PDU across multiple locations.
- Thus, the requirement for power optimization and smart energy management, drives the data center power market trends.
By Data Center Size:
Based on data center size, the market is segmented into Small Data Centers, Medium Data Centers, and Large Data Centers.
Trends in the Data Center Size:
- Innovation in edge computing, with compact, modular designs meets the requirement for localized data processing in small data centers.
- In order to ensure the sustainability and reduction of operational costs, small data centers are equipped with energy-efficient cooling solutions.
The Large Data Centers sector accounted for the largest revenue share of 46.89% in 2023.
- The operational efficiency is maintained by utilizing extensive power and cooling infrastructures in order to handle massive amounts of data in large data centers.
- Additionally, in order to avoid system failures advanced power systems like redundant UPS systems and high-capacity PDUs are utilized.
- They also play a major role in housing the global enterprise's infrastructures.
- In November 2021, a new 38 MW Hyperscale Data Center was launched by Nxtra the data center subsidiary of Airtel. It's spread across 270,000 sq. ft, fully integrated into Airtel's global submarine cable network.
- Therefore, the ability to handle vast amounts of data drives the data center power market growth.
The Medium Data Centers sector is anticipated to register the fastest CAGR during the forecast period.
- Medium-sized data centers offer scalability and cost-effectiveness, leading to their increasing adoption across enterprises.
- They do not require massive infrastructure and substantial IT infrastructure meets the requirements to cater to business needs.
- Localized data solutions are increasingly preferred by businesses with the enhancements in edge computing and regional data center demands.
- In May 2023, SoftBank Corp. and NVIDIA collaborated to roll out AI-based data centers across Japan. These will be utilized for generative AI and 5G/6G applications, with the NVIDIA GH200 Grace Hopper™ Superchip.
- Therefore, the rise in the requirement for localized computing power and flexibility boosts the data center power market trends.
By End-Use Industry:
Based on the end-use industry, the market is segmented into IT & Telecom, BFSI, Healthcare, Government & Defense, Energy, Retail, Manufacturing, Media & Entertainment, and others.
Trends in the End-Use Industry:
- The advancements in data security solutions are blockchain-backed, ensuring reduced data breaches and improved transparency in the BFSI sector.
- In order to secure the sensitive information in the data centers, the Government & Defense sectors are continuously integrating AI-based tools for cybersecurity.
The IT & Telecom sector accounted for the largest revenue share in 2023
- The vast digital infrastructure is handled by data centers in the IT & Telecom industries that support services including internet services, cloud computing, and data storage.
- To ensure uptime, scalability, and user connectivity which is continuous, advanced power systems are utilized in high-performance data centers.
- The advancements in the IoT and 5G deployments are further accelerating the adoption of data centers in the IT &Telecom sector.
- In May 2021, a micro data center was launched by Vertiv in EMEA, which is pre-assembled. It is designed for Edge or small IT sites and has applications across various industries including retail stores, healthcare, and light industrial sites.
- Therefore, the innovations in technology and scalability provided drive the data center power market demand.
The healthcare sector is anticipated to register the fastest CAGR during the forecast period.
- The rise in the adoption of digital technologies including electronic health records (EHR), telemedicine, and AI-driven diagnostics in the healthcare sector, solidifies the requirement for data center infrastructure.
- In order to ensure the security, reliability, and compliance of data center power solutions, cloud-based services are integrated into healthcare organizations.
- There is also a rise in the investment towards dedicated data centers for the healthcare sector with the increase in the requirement for security and privacy of data.
- As per the analysis, the rapid digital transformation and advancements in technology drive the usage of data centers in the healthcare sector, in turn driving the data center power market expansion.
Regional Analysis:
The regions covered are North America, Europe, Asia Pacific, the Middle East and Africa, and Latin America.
Asia Pacific region was valued at USD 6,018.42 Million in 2023. Moreover, it is projected to grow by USD 6,350.44 Million in 2024 and reach over USD 10,708.54 Million by 2031. Out of this, China accounted for the maximum revenue share of 30.2%. As per the data center power market analysis, the development is due to the rapid digitalization and urbanization in developing countries, especially China and India. The increasing adoption of advanced technologies like 5G, IoT, and artificial intelligence, leading to massive amounts of data further accelerates the requirement for data centers in this region.
- In December 2023, an underwater data center project was announced by China, utilizing the power of 6M PCs. This enables energy efficiency by saving 122 million kilowatt-hours of electricity every year.
North America is estimated to reach over USD 13,676.46 Million by 2031 from a value of USD 7,920.87 Million in 2023 and is projected to grow by USD 8,336.50 Million in 2024. The growth is driven by the rapid adoption of advanced technologies including cloud computing and data storage needs, especially across hyperscale data centers. To meet the digital demands across industries like healthcare, finance, and e-commerce, businesses are heavily investing in data centers.
- In November 2021, Hydrogen Fuel Cell Technology was launched by Caterpillar Inc. to facilitate backup power at Microsoft Data Center . This project is partially funded by the U.S. Department of Energy (DOE) and backed by the National Renewable Energy Lab (NREL).
The stringent government policies and the shift towards sustainability drive the growth of the market in Europe. The adoption of energy-efficient infrastructure and renewable energy, are a few of the contributing factors. The data center power market analysis shows that the increasing penetration of digital services, cloud computing, and innovations involving smart cities are the primary driving factors of the market in the Middle East and Africa. In Latin America, the advancements in cloud-based services and digital transformation contribute to data center power market expansion.
Top Key Players & Market Share Insights:
The data center power market is highly competitive with major players providing services to the national and international markets. Key players are adopting several strategies in research and development (R&D), product innovation, and end-user launches to hold a strong position in the global data center power market. Key players in the data center power industry include-
- Schneider Electric (France)
- ABB (Switzerland)
- Vertiv Group Corp. (USA)
- Siemens (Germany)
- General Electric Company (USA)
- Eaton (Ireland)
- Huawei Technologies Co., Ltd. (China)
- Delta Electronics, Inc. (Taiwan)
- Legrand SA (France)
- Mitsubishi Electric Corporation (Japan)
Recent Industry Developments :
Product Launches:
- In September 2024, Merchant 1.6Tb/s Silicon Photonics Engine was launched by DustPhotonics to power a Multitude of AI and Hyperscale Data Center use cases. It supports 8 channels and 224G/channel operation.
- In May 2024, AI workloads from core to cloud to edge led to the expansion of the IBM Power server. This drives more business value across industries and capitalizes on data where it originates, enabling the movement of workload across centralized data centers.
- In March 2024, MasterPacT MTZ Active was launched by Schneider Electric at Data Center World. This ensures the optimization of power distribution across critical industries including data centers.
Mergers & Acquisitions:
- In May 2024, the enhancement of data center capabilities was achieved with the acquisition of SKAE Power Solutions by JLL. This adds technical depth and enables JLL to provide Full data center lifecycle solutions.
- In April 2024, after acquiring Southwest Data Products, Nucor Data Systems launched a dedicated unit supplying data center customers. The acquisition was worth $115 million.
- In March 2024, Talen's Data Center was acquired by AWS for $650M. The expands the data center portfolio across U.S. and overseas.
Data Center Power Market Report Insights :
| Report Attributes | Report Details |
| Study Timeline | 2018-2031 |
| Market Size in 2031 | USD 40,106.91 Million |
| CAGR (2024-2031) | 7.0% |
| By Type |
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| By Data Center Size |
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| By End-Use Industry |
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| By Region |
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| Key Players |
|
| North America | U.S. Canada Mexico |
| Europe | U.K. Germany France Spain Italy Russia Benelux Rest of Europe |
| APAC | China South Korea Japan India Australia ASEAN Rest of Asia-Pacific |
| Middle East and Africa | GCC Turkey South Africa Rest of MEA |
| LATAM | Brazil Argentina Chile Rest of LATAM |
| Report Coverage |
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Key Questions Answered in the Report
How big is the Data Center Power Market? +
Data Center Power Market size is estimated to reach over USD 40,106.91 Million by 2031 from a value of USD 23,417.22 Million in 2023 and is projected to grow by USD 24,629.30 Million in 2024, growing at a CAGR of 7.0% from 2024 to 2031.
What specific segmentation details are covered in the data center power market report? +
The data center power market report includes specific segmentation details for product, data center size, end-use industry, and region.
Which is the fastest segment anticipated to impact the market growth? +
In the end-use industry segment, the healthcare sector is the fastest-growing segment during the forecast period due to the enhancement in technology and the excess data generated.
Who are the major players in the data center power market? +
The key participants in the data center power market are Schneider Electric (France), ABB (Switzerland), Eaton (Ireland), Vertiv Group Corp. (USA), Siemens (Germany), General Electric Company (USA), Huawei Technologies Co., Ltd. (China), Delta Electronics, Inc. (Taiwan), Legrand SA (France), Mitsubishi Electric Corporation (Japan).
