Data Center Cooling Market Research, 2033
The global data center cooling market was valued at $18.7 billion in 2023, and is projected to reach $80.1 billion by 2033, growing at a CAGR of 15.7% from 2023 to 2033. The data center cooling market is a rapidly growing segment within the broader data center infrastructure industry, driven by the increasing demand for efficient solutions to manage the heat generated by high-density servers, storage systems, and networking equipment. As data traffic surges globally, fueled by the expansion of cloud computing, artificial intelligence (AI), big data analytics, and the Internet of Things (IoT), the need for advanced cooling technologies becomes more critical. Effective cooling ensures that equipment operates within optimal temperature ranges, preventing overheating that can lead to system failures, reduced performance, and costly downtime. With energy efficiency becoming a top priority for data center operators, cooling solutions have evolved significantly to meet the demands of modern, high-performance facilities.
The growing trend in data center cooling is immersion cooling, where servers are submerged in dielectric fluids that efficiently conduct heat away from the components. This type of cooling is gaining traction particularly in high-performance computing (HPC) environments, such as supercomputing centers or facilities running AI and machine learning workloads. The thermal management capabilities of immersion cooling not only improve performance but also reduce the overall environmental impact of cooling systems. Immersion cooling is more efficient than air-based cooling, as the liquid medium absorbs heat more effectively, and because the heat is removed at a much higher rate than air. Moreover, the system operates with minimal noise and significantly reduces the need for large, energy-consuming air conditioning units.
The data center cooling market continues to experience significant technological advancements, as operators seek to balance the need for high performance, low energy consumption, and sustainable operations. The ongoing development of AI-powered cooling systems, liquid immersion technologies, and increase in use of renewable energy sources is reshaping how data centers manage heat and operate in an environmentally conscious manner. As the digital economy grows and data centers become more complex and consume high energy, the demand for innovative, cost-effective, and sustainable cooling solutions is expected to remain a key priority for operators and service providers.
Rise in data center demand, rise in high-performance computing, including AI, machine learning, and big data analytics, and rise in adoption of hyperscale and edge data centers are the factors expected to propel the growth of the global data center cooling market. Moreover, growth in need of renewable energy integration, rapid urbanization, and increase in IT adoption are expected to provide lucrative opportunities for the growth of the market during the forecast period. On the contrary, high implementation cost and cooling challenges during power outage hamper the growth of the data center cooling market.
Key Takeaways:
By component, the solution segment accounted for the largest data center cooling market share in 2023.
By cooling type, the room-based cooling segment accounted for the largest data center cooling market share in 2023.
By industry vertical, the manufacturing segment accounted for the largest data center cooling market size in 2023.
Region wise, North America generated the highest revenue in 2023.
Segment review
The data center cooling market is segmented on the basis of component, cooling type, industry vertical, and region. In terms of component, the market is bifurcated into solution and service. By cooling type, it is classified into room-based cooling, rack-based cooling, and row-based cooling. In terms of industry vertical, it is classified into BFSI, manufacturing, IT & telecom, media & entertainment, retail, government & defense, healthcare, energy, and others. Region wise, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
Depending on cooling type, the room-based cooling segment dominated the data center cooling market share in 2023 and is expected to continue this trend during the forecast period owing to least use of pipes and ducts compared to other cooling types. Air-conditioners and other air-based cooling circulate air in data centers to maintain temperature within permissible limit. room-based cooling is utilized more due to its energy-efficient cooling. However, the rack-based cooling segment is expected to witness the highest growth in the upcoming years, owing to the increasing demand for more efficient cooling solutions in high-density environments. As data centers evolve and handle more advanced IT workloads like cloud computing and artificial intelligence there is a need for more targeted and efficient cooling.
Region wise, the data center cooling market was dominated by North America in 2023, and is expected to retain its position during the forecast period, owing to technological advancements and recent developments pertaining to the market. Moreover, companies in this region are focusing more on implementation of cost-effective and environment-friendly cooling solutions, which is expected to drive the data center cooling industry during the forecast period. However, Asia-Pacific is expected to witness significant growth during the data center cooling market forecast period, owing to increasing demand for cloud computing, data processing, and the rise of emerging technologies such as AI, big data, and IoT. Furthermore, the Asia-Pacific region has a growing number of hyperscale data centers, which require efficient cooling solutions to handle high-density IT infrastructure.
The report focuses on growth prospects, restraints, and analysis of the global ERP market trend. The study provides Porter‐™s five forces analysis to understand the impact of various factors, such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers on the global ERP market share.
Competition Analysis:
Competitive analysis and profiles of the major players in the data center cooling market are Schneider Electric Se; Black Box Corporation; Nortek Air Solutions, LLC; Airedale International Air Conditioning Ltd; Hitachi, Ltd.; Rittal GmbH & Co. Kg; Fujitsu Ltd.; Stulz GmbH; Vertiv; and Asetek. These major players have adopted various key development strategies such as business expansion, new product launches, and partnerships, which help drive the growth of the data center cooling market globally.
Recent Developments in the data center cooling Industry:
In October 2024, Schneider Electric acquired an initial 75% controlling interest in Motivair for $850 million with the deal designed to strengthen its energy management solutions. The deal strengthens Schneider's offering of direct-to-chip liquid cooling and high-capacity thermal systems. The increasing use of generative-AI and large language models such as Chat-GPT calls for more efficient cooling solutions in data centers, particularly liquid cooling as traditional air cooling cannot disperse the greater heat, the company added.
In March 2024, Schneider Electric collaborated with NVidia to optimize data center infrastructure. Schneider Electric introduced cutting-edge data center reference designs tailored for NVIDIA accelerated computing clusters and built for data processing, engineering simulation, electronic design automation, computer-aided drug design, and generative AI. Special focus was placed on enabling high-power distribution, liquid-cooling systems, and controls designed to ensure simple commissioning and reliable operations for the extreme-density cluster, the statement added.
In January 2022, Tech Data, a TD SYNNEX company, expanded its partnership with Schneider Electric, the global leader in digital transformation in energy management and automation. With the enhancement of this go-to-market (GTM) partnership, Tech Data empowered businesses by making Schneider Electric™s net-zero data center solutions accessible for enterprises.
Top Impacting Factors
Increase in data center demand
As the world becomes more digitally connected and data-driven, businesses are relying increasingly on data centers to store, process, and manage vast amounts of data. The rise of cloud computing, big data analytics, artificial intelligence (AI), machine learning, and the Internet of Things (IoT) has led to exponential data generation, creating a parallel surge in the demand for data centers. This growing reliance on data centers has prompted operators to build larger and more powerful facilities to support the expanding data needs of businesses and consumers.
With the expansion of these facilities, the density of IT equipment has also increased. More servers, storage systems, and networking devices are packed into smaller physical spaces, generating significant amounts of heat. As a result, cooling has become a critical factor in ensuring the proper functioning and longevity of the equipment. Data center operators are now faced with the challenge of cooling ever-more powerful servers in high-density environments while also keeping operational costs under control. Traditional cooling systems are often insufficient for managing the heat generated by modern, high-performance hardware. This is pushing operators to adopt advanced and more efficient cooling technologies, such as liquid cooling, AI-driven optimization, and hybrid cooling solutions, all of which contribute to the growth of the data center cooling market.
Demand for real-time insights and data sharing to enhance decision-making
Hyperscale data centers, which are massive facilities built to support the massive infrastructure required for cloud computing, big data analytics, and large-scale internet services, demand highly efficient and scalable cooling solutions due to their size and the immense computational power they house. These data centers are typically operated by major cloud service providers such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud, and they handle vast amounts of data traffic. As hyperscale data centers continue to grow in number and scale to accommodate ever-increasing data demands, the need for advanced cooling technologies becomes more critical.
Hyperscale data centers are characterized by their high density of servers, storage systems, and networking equipment, all of which generate a tremendous amount of heat. Traditional air-based cooling systems are becoming less effective at managing the heat generated by modern, high-performance IT equipment. As a result, these facilities are increasingly adopting more efficient and targeted cooling technologies such as liquid cooling and direct-to-chip cooling, which offer more efficient thermal management. Moreover, hyperscale operators are looking to improve energy efficiency to reduce operational costs and meet sustainability goals. This has spurred the adoption of cooling solutions like free cooling (which uses external air), AI-driven optimization, and immersion cooling, all of which are driving the growth of the data center cooling market.
Key Benefits For Stakeholders
This report provides a quantitative analysis of the market segments, current trends, estimations, and dynamics of the data center cooling market analysis from 2023 to 2033 to identify the prevailing data center cooling market opportunities.
The market research is offered along with information related to key drivers, restraints, and opportunities.
Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders make profit-oriented business decisions and strengthen their supplier-buyer network.
In-depth analysis of the data center cooling market segmentation assists to determine the prevailing market opportunities and data center cooling market size
Major countries in each region are mapped according to their revenue contribution to the global market.
Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
The report includes the analysis of the regional as well as global data center cooling market trends, key players, market segments, application areas, and data center cooling market growth strategies.
Data Center Cooling Market Report Highlights
| Aspects | Details |
 Forecast period | 2023 - 2033 |
 Report Pages | 215 |
 By Component |
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 By Industry Vertical |
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 By Cooling Type |
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 By Region |
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 Key Market Players | ASETEK, Black Box Corporation, Vertiv, Nortek Air Solutions, LLC, RITTAL GmbH & Co. KG, Hitachi, Ltd., Schneider Electric SE, Fujitsu Ltd, Airedale International Air Conditioning Ltd., Stulz GmbH |
Analyst Review
Owing to the increasing green initiatives and amid stringent environment regulations from government, data center operators are adopting cooling systems that emit least carbon footprints, thereby driving the growth of the global market. Moreover, data center cooling system manufacturers are introducing innovative products, which use less water while cooling the data centers. For instance, in June 2018, Microsoft has announced an eco-friendly data center that has been lowered into the sea waters near Orkney Island, Scotland, as a part of Phase 2 of Project Natick, which is expected to check the feasibility of systems on the seabed. Moreover, the data center operators are also focusing on using renewable source of energy such as geo-thermal energy to make data center cooling systems energy efficient and eco-friendly. Furthermore, data center operators are focusing to provide modular cooling and portable cooling to data centers present in mild temperature at reasonable pricing. With rise in number of data centers, the market is getting competitive.
Moreover, in Europe number of companies are majorly focusing on reducing the costs associated with data center operations, which has augmented the need for efficient data center cooling solutions. Additionally, in Europe, the demand for new data centers is continuously growing, which is opportunistic for the market. For instance, Apple, Inc. spent almost $1.9 billion to build two data centers in Europe that would be entirely powered by renewable energy. The company has declared that the data centers in Denmark and Ireland will power Apple's online services, including the App Store, iTunes Store, Maps, iMessage, and Siri for customers across Europe. The global data center cooling market is highly competitive due to the strong presence of the existing vendors. However, the data center cooling system vendors who have access to extensive technical and financial resources are anticipated to gain a competitive edge over their rivals, as they have the capacity to cater to the global market requirements. Furthermore, the competitive environment in this market is expected to further intensify with increase in technological innovations, product extensions, and different strategies adopted by the key vendors. Some of the major key players profiled in the report include Schneider Electric Se; Black Box Corporation; Nortek Air Solutions, LLC; Emerson Electric Co.; Hitachi, Ltd.; Rittal Gmbh & Co. Kg; Fujitsu Ltd.; Stulz Gmbh; Vertiv, and Asetek.
The global data center cooling market was valued at $18.7 billion in 2023 and is projected to reach $80.1 billion by 2033, growing at a CAGR of 15.7% from 2024 to 2033.
The rise in high-performance computing, including AI, machine learning, and big data analytics, is one of the upcoming trends in the data center cooling market.
Growth in the need for renewable energy integration is the leading application of the Data Center Cooling Market.
North America is the largest regional market for Data Center Cooling.
Schneider Electric Se, Black Box Corporation, Nortek Air Solutions, LLC, Airedale International Air Conditioning Ltd, Hitachi, Ltd., Rittal GmbH & Co. Kg, Fujitsu Ltd., Stulz GmbH, Vertiv, and Asetek are the top companies with market share in Data Center Cooling.
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