Global Data Center Power Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Market Overview

The Global data center power market is expected to register a CAGR of 6.58% during the forecast period 2022-2027. The rising adoption of mega data centers is driving the market. Implementing fewer mega data centers depending on their locations can allow a company to enjoy advantages of certain local benefits with low energy prices, climate, or availability of alternative energy sources. Virtualization dramatically improves hardware utilization and enables firms to reduce the number of power-consuming servers and storage devices.

• The rising adoption of cloud computing is also aiding the market growth leading to the rise of vast hyperscale cloud data centers. According to Cisco, data center traffic is growing fast and is expected to reach 19.5 zettabytes (ZB) per year by 2021 with factors such as the growth of the Internet of Things (IoT) applications like smart cars, smart cities, and connected health devices. Microsoft’s Azure cloud has been carbon-neutral, and half of the energy it uses already comes from 1.2 gigawatts of wind, solar, and hydro-electric sources, which the company expects to make 60 percent by 2020 and 100 percent at some point down the line for their data center infrastructure.
• Further, the increase in greenfield and brownfield facilities, along with modular data center deployment, is anticipated to drive the demand for power systems. The emergence of edge computing and expansion of facilities in the secondary data center market is driving the need for modular and efficient power infrastructure solutions. The increasing electricity costs, carbon emission, and initiatives to integrate renewable energy sources by hyperscale operators are expected to transform the market. The facility operators are adopting innovative and efficient power infrastructure to reduce carbon emissions and OPEX costs in the market.
• Many of the data centers across the global market are adopting 2N redundant UPS systems to exist with various feed designs of the facility and frequent failure. Factors such as cost, reliability, efficiency, and maintainability impact the adoption of UPS systems and generators in the global market.
• The intelligent rack PDU solutions are designed to facilitate smooth operations in complex facilities with high rack power density. Datacenter colocation providers are looking for modern infrastructure solutions that require less maintenance and less space, with 99.99% uptime. These diverse demands are expected to boost the vendors to offer innovative power solutions. PDU is the biggest and most established product category in the data center power market, which is expected to register a much more moderate growth level during the forecast period.
• However, higher investment is restraining the market growth as primary areas of investment are cabling, power facility, and data center infrastructure management (DCIM) solutions which require high cost during the initial investment.

Scope of the Report

The Global Data Center Power Market is segmented by Solution Type (Power Distribution Unit, UPS, Busway), Service Type (Consulting, System Integration, Professional Service), End-user Application (Information Technology, Manufacturing, BFSI, Government, Telecom), Data Center Size (Small & Medium, Large), and Geography.

The data center power market is growing as various data center designers are currently adopting advanced power distribution and management solutions to attain energy efficiency at lesser Power Usage Effectiveness (PUE) ratios. Many facilities across the global market are adopting 2N redundant UPS systems to cope with various feed designs of the facility and frequent failure, including energy-efficient solutions in other segments such as PDU, Busway, etc.

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Key Market Trends

The Information Technology Segment is Expected to Hold a Major Market Share

• The IT industry requires on-premise private data storage centers and hyperscale data centers for its operations, as per the organizations' size. Additionally, the adoption of cloud storage has increased over the years due to growth in SaaS providers, enabling cloud storage providers to expand their capacities. Hence, the increasing data load requires more power. This creates a requirement for efficient power solutions in IT applications. According to the Data Center Survey, recently published by Vertiv, 98% of the participants voted for IT utilization be above 20% by 2025, which witnessed significant growth from its 2014 survey, in which the figure was 88%. This indicates that IT companies are focusing on deploying an efficient power source for their data centers and increasing their utilization rate.
• Uptime Institute, in its 2020 report, by studying 300 data centers, they have stated that, due to the aging IT equipment, it is the consumer of over 66% of the energy but only contributes around 7% of the computing energy. This indicates the need for efficient IT infrastructure and is estimated to increase the demand for a power solution for data centers used in the IT industry. In the recent report by SuperMicro, surveying over 2,000 IT professionals concluded that over 10% to 20% of energy saving could be extracted by coupling power and power data center infrastructure, which can be achieved with a single central cooling unit and single power supply.
• Cloud storage providers, like AWS, Microsoft, and Google, are expanding their storage capabilities to offer more efficient workflow on the cloud. These companies are making investments in hyperscale deals. For instance, in June 2021, Amazon Web Services Inc. (AWS) announced opening data centers in Israel. The company aims to enable more developers, startups, enterprises, government, education, and non-profits in the region to run their applications and serve end-users from data centers located in the country.
• Also, in November 2021, AWS announced plans to open an infrastructure region in Alberta, Canada, in late 2023/early 2024. The new AWS Canada West (Calgary) Region will consist of three Availability Zones (AZs) at launch and join the existing AWS Canada (Central) Region in Montreal, which also consists of three Availability Zones. The new AWS Canada West (Calgary) Region will enable even more developers, startups, enterprises, education, government, and NPOs, to run their applications and serve end-users from data centers located in Canada.
• Moreover, other companies are also planning data center expansion across various regions. For instance, in June 2021, Stockland, an Australian real-estate firm, announced to build a new data center in Sydney. The data center is to have an end value of AUD 264 million. Moreover, it will include 6,300 sqm of data halls, 3,215 sqm of office space, and more than 13,000 sqm for electrical and mechanical services. Such developments in the data center industry are anticipated to propel the growth of the data center power market during the forecast period. Some new entrants, like SpaceDC, Keppel Data Centres, and Princeton Digital Group, are also making moves to invest in hyperscale facilities and data center investments. As of April 2020, Princeton Digital Group has been planning two additional greenfield builds, one in Jakarta and one in Surabaya, as well as upgrading their five existing facilities.
• Although the industry is rapidly moving with the adoption of the cloud, the dependency on on-premise and hybrid data centers is significantly present. These companies are trying to expand their own data storage capacities, which is expected to demand an efficient power solution for data centers. Moreover, the trend of the IT industry's agile and DevOps operational frameworks is increasing the need for more efficient data storage solutions.

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