Market Insights
“The data center cooling market size was US$9.1 billion in 2024 and is likely to grow at an impressive CAGR of 11.2% in the long run to surpass US$17.1 billion in 2031.”
Market Dynamics
Introduction
Data center cooling is the process of cooling down data centers through various available methods and technologies so that the data centers maintain an optimum temperature and humidity level. This is essential to ensure that servers, storage, and other networking equipment are not overheated, which can be detrimental to the continuous and smooth running of the equipment. Severe cooling may incorporate an air-conditioning-related framework, fluid heating apparatus, prepared flooring, and innovative procedures, e.g., free cooling, which draws on cold air outside. Minimisation of downtime, equipment life extension, and minimisation of energy consumption require adequate cooling. The market offers a wide range of products, including air conditioners, precision air conditioners, liquid cooling systems, air handling units, chillers, and more.
Data Center cooling is essential for regulating humidity and temperature in the data center. Air and liquid cooling system overhauls, coolant system diagnostics, chiller and CRAC/CRAH unit servicing, routine inspections, and filter replacements are among the activities. By performing such tasks, vital IT equipment is kept from overheating and thermal stability, and energy efficiency is assured.
Market Drivers:
- The increased investment by technology companies in data centers is driving the global construction and development of hyperscale data centers.
- As the rollout of 5G occurs worldwide, the deployment of edge and modular data centers is expected to accelerate. Global data protection regulations will promote the development of local data center clusters.
- Global data protection regulations will promote the development of local data center clusters.
Recent Market JVs and Acquisitions:
Recent M&A and JV activity in the data center cooling market is accelerating as companies pursue advanced liquid-cooling technologies, integrate end-to-end power-thermal solutions, and form strategic partnerships to meet rising AI/HPC cooling demand.
An increasing number of strategic alliances, including M&As, JVs, etc., have been performed over the past few years:
- In October 2024, Schneider Electric acquired a controlling interest in Motivair Corporation, a leader in liquid cooling and thermal management for high-performance computing. Motivair's unique cooling solutions enhance Schneider Electric's data center offerings, reinforcing its position across the entire data center infrastructure, from grid to chip and chip to chiller.
- In December 2023, Vertiv acquired the data center cooling company CoolTera, along with specific contracts, patents, trademarks, and intellectual property from a CoolTera affiliate. This acquisition enhances Vertiv's expertise in high-density cooling solutions.
Recent Product Development:
Key product development areas in data center cooling focus on advanced liquid cooling, high-efficiency CDUs/chillers, immersion and two-phase technologies, and AI-driven thermal optimisation, with recent launches including next-gen cold plates, modular liquid cooling platforms, AI-optimised cooling systems, and high-capacity rack-level cooling solutions. A growing number of product developments have been happening in the market in the last few years:
- In October 2024, Hewlett Packard Enterprise unveiled the industry's first 100% fanless direct liquid cooling system. This system is designed to enhance energy and cost efficiency for large-scale AI deployments, reducing power consumption by up to 90% compared to traditional air cooling.
- In October 2024, CoolIT Systems introduced a new range of AI cooling products, including the high-performance AHx240 and AHx180 liquid-to-air CDUs, designed to support the NVIDIA Blackwell AI platform. This announcement is accompanied by a substantial expansion of CoolIT Systems' manufacturing capacity.
Market Segments' Analysis
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Segmentations
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List of Sub-Segments
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Segments with High Growth Opportunity
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Cooling-Type Analysis
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Air cooling and Liquid cooling
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Air cooling is expected to hold the dominant share of the market, whereas Liquid cooling is likely to grow at a faster rate in the coming years.
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Product-Type Analysis
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Air Cooling [Perimeter, Air Handling Units, and Other Air Cooling Products] and Liquid Cooling [Direct-to-chip, Immersion, and Other Liquid Cooling Products]
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Perimeter is expected to maintain a larger market share, while Direct to chip is projected to experience faster growth in the coming years.
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Structure-Type Analysis
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Room-based, Rack-based, and Row-based
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Rack is anticipated to contribute the largest share of the structure type and to be the fastest-growing category.
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End-Use Industry-Type Analysis
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Healthcare, Retail, Media & Entertainment, IT & Telecom, BFSI, and Other End-Use Industries.
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The BFSI sector offers strong growth opportunities due to rapid digitalisation, AI adoption, and rising demand for secure, high-performance data infrastructure.
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Region Analysis
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North America, Europe, Asia-Pacific, and The Rest of the World
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North America is expected to remain the largest market for data center cooling during the forecast period.
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By Cooling Type
“Air cooling is expected to hold the dominant share of the market, whereas liquid cooling is likely to grow at a faster rate in the coming years.”
The data center cooling market is segmented into air cooling and liquid cooling. Air cooling dominates the data center cooling market because it is a widely used method, cost-effective, and fits into current infrastructure, but the most rapidly expanding segment is liquid cooling, which has gained traction because of the growing popularity of AI and high-density workloads, which demand additional thermal efficiency and growing demands for energy-efficient and sustainable products.
By air cooling product type, perimeter is expected to hold the largest market share due to its widespread use in traditional and legacy data centers, as they provide reliable and familiar cooling solutions. However, Air Handling Units are projected to grow at the fastest rate. This growth is driven by the need for more targeted and efficient cooling in modern data centers, which must manage higher rack densities, reduce excessive energy consumption, and support advanced technologies such as artificial intelligence and edge computing.
By Structure Type
“Rack-based is anticipated to contribute the largest share of the structure type and the fastest-growing category.”
The market is segmented into room-based, rack-based, and row-based. Rack-based cooling solutions encompass in-rack units, rear-door heat exchangers, and direct-to-chip liquid cooling systems that target heat sources directly. These systems reduce airflow losses and enhance efficiency by placing cooling mechanisms closer to the heat loads. This design makes them particularly suitable for high-density environments such as AI and high-performance computing (HPC).
By End-Use Industry Type
“The BFSI sector is expected to maintain the largest market share and the fastest-growing category.”
The market is segmented by industry into IT & Telecom, manufacturing, retail, healthcare, energy and utilities, BFSI, and other end-use industries.
The BFSI (Banking, Financial Services, and Insurance) industry is the primary focus for data center cooling solutions. This growth is driven by the rapid digitalization of banking services and an increase in transaction volumes. The emergence of real-time payment systems and AI-based fraud detection requires efficient and high-performance cooling to maintain constant uptime and reliability.
Regional Analysis
“North America is expected to remain the largest market for data center cooling during the forecast period.”
North America is the largest shareholder of the market because of having vast presence of large data centers in the region due to high penetration of cloud solutions, growing data traffic, and technology changes. Also, there are numerous technological companies and data center operators who are among the leaders in North America, adding pressure to the demand for improved cooling technology. Additionally, the strict regulatory conditions as concerns the energy expenditure and sustainability areas also contribute to the further popularity of innovative cooling technologies in the region.
Key Players (Based on Dominance)
The market plays around data centre cooling is moderately concentrated, as more than 40 active companies are present in the market, which are operational in different regions. Most of the major competitors operate in various segments, providing special or comprehensive cooling products.
Here is the list of the Top Players (Based on Dominance)
- Vertiv Group Corp
- Johnson Controls
- Stulz GMBH
- Airedale By Modine
- Trane Technologies
- Carrier
- Daikin Industries
- Schneider Electric
- Coolit Systems
- Fujitsu
Note: The above list does not necessarily include all the top players in the market.
Are you the leading player in this market? We would love to include your name. Please write to us at [email protected]
Report Features
This report provides market intelligence most comprehensively. The report structure has been kept so that it offers maximum business value. It provides critical insights into market dynamics and will enable strategic decision-making for existing market players as well as those willing to enter the market. The following are the key features of the report:
- Market structure: Overview, industry life cycle analysis, supply chain analysis.
- Market environment analysis: Growth drivers and constraints, Porter’s five forces analysis, SWOT analysis.
- Market trend and forecast analysis.
- Market segment trend and forecast.
- Competitive landscape and dynamics: Market share, Service portfolio, New Product Launches, etc.
- COVID-19 impact and its recovery curve.
- Attractive market segments and associated growth opportunities.
- Emerging trends.
- Strategic growth opportunities for the existing and new players.
- Key success factors.
The data center cooling market is segmented into the following categories.
Data Center Cooling Market, by Cooling Type
- Air Cooling
- (Air Cooling Product Type Analysis: Perimeter, Air Handling Unit, and Other Air Cooling Products)
- (Regional Analysis: North America, Europe, Asia-Pacific, and the Rest of the World)
- Liquid Cooling
- (Liquid Cooling Product Type Analysis: Direct-to-chip, Immersion, and Other Liquid Cooling Products)
- (Regional Analysis: North America, Europe, Asia-Pacific, and the Rest of the World)
Data Center Cooling Market, by Structure Type
- Room-based (Regional Analysis: North America, Europe, Asia-Pacific, and the Rest of the World)
- Rack-based (Regional Analysis: North America, Europe, Asia-Pacific, and the Rest of the World)
- Row-based (Regional Analysis: North America, Europe, Asia-Pacific, and the Rest of the World)
Data Center Cooling Market, by End-Use Industry Type
- Health Care (Regional Analysis: North America, Europe, Asia-Pacific, and the Rest of the World)
- Retail (Regional Analysis: North America, Europe, Asia-Pacific, and the Rest of the World)
- Media & Entertainment (Regional Analysis: North America, Europe, Asia-Pacific, and the Rest of the World)
- IT & Telecom (Regional Analysis: North America, Europe, Asia-Pacific, and the Rest of the World)
- BFSI (Regional Analysis: North America, Europe, Asia-Pacific, and the Rest of the World)
- Other End-Use Industries (Regional Analysis: North America, Europe, Asia-Pacific, and the Rest of the World)
Data Center Cooling Market, by Region
- North America (Country Analysis: The USA, Canada, and Mexico)
- Europe (Country Analysis: Germany, UK, France, and Rest of Europe)
- Asia-Pacific (Country Analysis: China, Australia, Japan, India, and Rest of Asia-Pacific)
- Rest of the World (Country Analysis: Brazil and Others)
Research Methodology
- This strategic assessment report from Stratview Research provides a comprehensive analysis that reflects today’s data center cooling market realities and future market possibilities for the forecast period.
- The report segments and analyzes the market in the most detailed manner to provide a panoramic view of the market.
- The comprehensive data and insights presented in the report are invaluable for market participants and investors. They enable them to identify readily accessible opportunities ("low-hanging fruit") in the market and develop effective growth strategies that accelerate their progress.
- This report offers high-quality insights and is the outcome of a detailed research methodology comprising extensive secondary research, rigorous primary interviews with industry stakeholders, and validation and triangulation with Stratview Research’s internal database and statistical tools.
- More than 1,000 authenticated secondary sources, such as company annual reports, fact books, press releases, journals, investor presentations, white papers, patents, and articles, have been leveraged to gather the data.
- We conducted more than 15 detailed primary interviews with market players across the value chain in all four regions and industry experts to obtain both qualitative and quantitative insights.
Customization Options
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Company Profiling
- Detailed profiling of additional market players (up to three players)
- SWOT analysis of key players (up to three players)
Competitive Benchmarking
- Benchmarking of key players on the following parameters: Service portfolio, geographical reach, regional presence, and strategic alliances
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