Data Center Power Market - Forecasts from 2024 to 2029

The data centre power market is expected to grow at a CAGR of 9.88%, reaching a market size of US$37.907 billion in 2029 from US$23.441 billion in 2024.

The increasing demand for data centres and colocation centres is a growing market for data centre power. The data centre power market is expected to see a rise in the forecast period due to the increasing need for efficiency at a low cost. There is traditionally low efficiency in infrastructure due to outdated energy conversion technologies, making it possible for frequent downtime, overloading, and system failures. This results in a hike in operating expenses and hindrances to the expansion of a company. An upsurge in data production alongside the increasing demand for better data stores that support larger volumes explains why there is an increasing need for power to have data centres that work effectively.

However, the data centre power market’s growth is being affected due to the requirement of high investments and the inadequate availability of compatible devices in some countries. Lack of awareness among some enterprises about the benefits of power management solutions, coupled with low coverage and weak enforcement of laws associated with energy conservation, is also a restraining factor for this market. Growing investments into data centre expansion by major industry players are increasing the number of data centres as the demand from end-users for more storage space continues to increase, which is expected to continue driving the market's growth over the projected period.

As electricity prices are rising along with the growing demand for data centre power globally, the cost incurred on power consumption in data centres accounts for half of the total cost. This is increasing the demand for more efficient data centre power solutions. Installing efficient data centre power solutions will reduce the company’s total expenses, thus bringing down the total cost of ownership of data centres. Increasing awareness about reducing carbon footprints is also increasing the market for data centre power. The data centre power market has been segmented based on solutions, end-users, and geography. By solution, the market has been segmented into the Power Distribution Unit, UPS, and Busway. By end-users, the market has been segmented into colocation providers, cloud providers, and enterprises.

Data Centre Power Market Drivers:

Rising demand for power distribution systems

Increasing demand for intelligent power distribution units leads to the growth in power distribution systems. As a result, data is increasing, and companies must keep their data safe. These units measure different power characteristics distributed over the entire system, thereby increasing their popularity. UPS also holds a significant share in this market due to the increasing focus of end-user enterprises on ensuring business continuity. Data centre UPS helps companies regulate and provide an uninterrupted power supply to equipment like servers and routers to run all the devices smoothly. Since the cost of downtime is showing a continuous increase, data centre owners are showing a continuous increase in demand for data centre UPS. An increase in the usage of portable UPS systems in services like Software as a Service (SaaS), high-performance computing, online gaming, and online media streaming is also fueling the market for data centre power.

High use by colocation Service providers as it adds momentum to the growth of data centre power

Colocation providers are expected to add momentum to the data centre power market due to increased colocation centres worldwide. The increase in colocation centres worldwide is due to increasing requirements for data storage, big data management, and cloud computing, and an increase in the implication of artificial intelligence coupled with the increasing focus of end-users toward cost reduction. The market for data centre power in cloud data centres and enterprises is expected to witness decent growth over the forecast period. The rapid growth of cloud computing worldwide due to increasing demand for more agile infrastructure among enterprises of all sizes is adding to the market growth in this segment. As traditional setups in enterprise-owned data centres are being upgraded to comply with industry standards and to integrate advanced technologies with improved power management capabilities, the market for data centre power is expected to show decent growth in this segment

Increasing the number of 5G edge centers

5G network connectivity provides quick data transmission rates for communications essential to mission success. High-speed connections enabled by 5G Live TV's extensive broadband capabilities are a boon to diverse applications such as IoT, robotics, and artificial intelligence, among others. It is worth noting that 4G is not capable of supporting such increased connection densities when compared with 5G, which also entails reduced latency and increased bandwidth capacity. This also reveals a surge in edge computing due to the availability of cloud-based services that can be deployed close to end users and their devices and IT services. Edge data centers are more versatile than core data centers due to their proximity to end users and greater processing, moving, and storing capacity. Edge computing is evolving more quickly than before, and its application calls for prompt, astute responses.

Data Centre Power Market Restraint:

High investment

Businesses face a major obstacle in the form of the substantial initial investment required in the data center power sector. Adopting modern power systems in data centers requires transitioning from antiquated to contemporary data center components. This requires labor, new hardware and software installation, and infrastructure upgrades. This changeover process requires a large initial investment. Most organizations, including SMEs with tight budgets, usually aren't able to update their data centers because of this requirement. The initial outlay needed to implement conventional power solutions is significantly less than that of energy-efficient ones. As a result, many businesses are reluctant to implement cutting-edge data center power systems that use less energy.

Data Centre Power Market Geographical Outlook

North America is expected to hold a significant share during the forecast period

North America holds a significant share of the data centre power market, and the market growth in this region is majorly attributed to the presence of many data centres here. The availability of state-of-the-art infrastructure in countries like the United States and Canada attracts investments by major industry players into data centre expansion projects. Europe also holds a fairly large share of this market. The market growth in this region is driven by stringent regulations regarding data protection, which continue to have enterprises’ trust. As a result, many enterprises are pumping investments into data centres in this region owing to the high reliability offered by the vendors.

Data Centre Power Market Developments:

• In December 2023, TEPCO Power Grid, Inc. (TEPCO PG) and NTT Global Data Centers Japan (NTT GDCJ), a division of NTT DATA Group Corporation, have decided to form a new business to collaboratively develop and run data centers in the Inzai-Shiroi neighborhood of Greater Tokyo, Japan. To secure power and connectivity jointly and support the development of data centers, primarily in Greater Tokyo, NTT GDCJ and TEPCO PG investigate the strategic placement of data centers. As the partnership's first project, the joint venture will purchase land in the Inzai-Shiroi area. This area is one of the Asia-Pacific region's main hubs for large-scale data centers.
• In October 2022, Equinix, Inc. - a digital infrastructure company - showed a blueprint of its plan to establish an International Business Exchange (IBX) data Centre in the middle of Jakarta. This will cost $74m, which will be its value at startup. This will enable firms in Indonesia and any other foreign organization operating within the nation’s boundaries to integrate and connect their businesses through a solid, trustworthy platform, thus making it easier for them to operate their organizations smoothly.

Data Centre Power Key Market Segmentation:

Data centre power Market is segmented and analyzed as below:

By Solution

• Power Distribution Unit
• UPS
• Busway

By End-User

• Colocation Providers
• Cloud Providers
• Enterprises

By Geography

• North America
• USA
• Canada
• Mexico
• South America
• Brazil
• Argentina
• Others
• Europe
• Germany
• France
• United Kingdom
• Spain
• Others
• Middle East and Africa
• Saudi Arabia
• Israel
• UAE
• Others
• Asia Pacific
• China
• Japan
• South Korea
• India
• Taiwan
• Thailand
• Indonesia
• Others