Data Center Generator Global Market Report 2024

The global data center market has grown strongly in recent years. It will grow from $252.68 billion in 2023 to $274.98 billion in 2024 at a compound annual growth rate (CAGR) of 8.8%. The expansion observed in the historical period can be ascribed to the growth of enterprise IT, widespread adoption of mobile devices, the surge in the internet and digital advancements, increasing demands for business continuity, and the consolidation of data centers.

The global data center market is expected to see strong growth in the next few years. It will grow to $388.41 billion in 2028 at a compound annual growth rate (CAGR) of 9.0%. The anticipated growth in the forecast period can be linked to the rising trend of digitalization, the expanding reach of cloud services, increased adoption of hybrid cloud solutions, a growing focus on sustainability and green initiatives, heightened prioritization of cybersecurity, and the lasting impacts of remote workforce dynamics. Noteworthy trends in the forecast period encompass the expansion of edge computing, the ongoing migration to cloud environments, widespread adoption of hybrid cloud solutions, and the integration of artificial intelligence and machine learning.

The expansion of data center facilities is anticipated to drive growth in the data center generator market. Data centers, comprising interconnected computer servers, are increasingly crucial for data processing, storage, and transfer. The surge in demand for data center capacity, fueled by digital transformation and the proliferation of cloud services, is prompting consumer-focused cloud providers and hyperscale operators to expand their operations, necessitating the use of data center generators. In cases of utility power outages, these generators serve as backup power sources. Notably, Gartner reported a 6% increase in end-user spending on global data center infrastructure, reaching $200 billion in 2021. Additionally, the International Energy Agency (IEA) observed a 260% increase in data center workloads, reaching 650 million in 2021. The growing number of data centers is poised to be a key driver for the data center generator market.

The escalating threat of cyber attacks is expected to fuel the growth of the data center generator market. Cyber threats involve malicious activities in the digital realm, aiming to exploit vulnerabilities in computer systems, networks, or online platforms to compromise data, disrupt operations, or gain unauthorized access to sensitive information. The rising frequency and complexity of cyber attacks underscore the critical need for data center resilience and business continuity. Data centers are increasingly investing in reliable backup power solutions such as generators to ensure uninterrupted operations, protect against cyber threats, and preserve service integrity. As of September 2023, AAG reported that 39% of UK companies experienced cyber attacks in 2022. Moreover, in the first half of 2022, cybercrime impacted 53.35 million individuals in the United States. The surge in cyber threats is a significant driver for the data center generator market.

Leading companies in the data center generator market are embracing a strategic partnership approach to explore technologies enabling the use of hydrogen as an eco-friendly fuel for critical data center infrastructure. Strategic partnerships involve companies leveraging each other's strengths and resources for mutual benefits. In September 2022, Equinix Inc., a US-based Internet services company, collaborated with the center for Energy Research & Technology (CERT), a Singapore-based interdisciplinary energy research center. This partnership aims to launch the world's first research initiative comparing the efficiency of proton-exchange membrane (PEM) fuel cells and fuel-flexible linear generator technologies. PEM fuel cells, known for their prominence in hydrogen energy, and fuel-flexible linear generators, offering flexibility in transitioning between clean fuel choices, have the potential to reduce carbon emissions while meeting the rising demand for data, colocation, and interconnection services. The Equinix-CERT research initiative will comprehensively assess the suitability of these technologies for tropical data centers, considering local climatic conditions, site limitations, power requirements, supply chain considerations, fuel storage capabilities, and adherence to regulatory policies. The adoption of hydrogen-based technologies presents an environmentally conscious solution for the evolving data center landscape.

In the data center generator market, major companies are strategically developing innovative products like diesel generators to expand their customer base, drive increased sales, and boost overall revenue. Diesel generators, which operate using diesel fuel, are a key focus in this endeavor. A notable example is Mitsubishi Heavy Industries Engine & Turbocharger Ltd., a Japan-based company renowned for its product lineup in the engine and turbocharger sectors. In March 2022, they unveiled the MGS-R Series of diesel generator sets. Tailored to meet the escalating demands of the digital economy, with a primary emphasis on data centers in Asian and Middle Eastern markets, this new series serves as a reliable backup power solution for commercial establishments, including data centers. With outputs ranging from 500 to 2,750 kVA for 50Hz and 460 to 2,000 kVA for 60Hz in standby configurations, the series incorporates recent enhancements in turbocharger specifications, fuel systems, and exhaust systems across all models to ensure a swift 10-second startup. Noteworthy is the introduction of a compact and high-power 12-cylinder engine, manufactured by MHIET, for the 1,500 kVA rating at 50Hz, the best-selling option in the lineup resulting in the smallest-in-class installation area. Furthermore, the series significantly extends the overhaul interval by more than double through a meticulous examination of operational aspects across various generator set sites.

In November 2021, Caterpillar Inc., a leading US-based construction machinery and equipment company, joined forces with Microsoft and Ballard Power Systems for a three-year project aimed at evaluating hydrogen fuel cell backup generators. This collaboration, based in Quincy, Washington, USA, involves Caterpillar providing overall system integration, power electronics, and controls for the core of the power solution. Microsoft hosts the demonstration project at its business data center in Quincy, Washington, while Ballard contributes an advanced hydrogen fuel cell module. The project focuses on assessing the affordability and performance of fuel cell systems powered by low carbon-intensity hydrogen on a larger scale, showcasing the commitment of these industry leaders to sustainable and innovative energy solutions.

Major companies operating in the data center generator market report are Alphabet Inc., Amazon.com Inc., Equinix Inc., Microsoft Corp., NTT DATA Corp., Oracle Corp., SAP SE, International Business Machines Corp., Cisco Systems Inc., Huawei Investment & Holding Co. Ltd., Google LLC, Meta Platforms Inc., Digital Realty, CyrusOne, GDS Holdings Limited, KDDI’s Telehouse, Hewlett Packard Enterprise Company LP, Dell Technologies Inc., Lenovo Group Limited, Fujitsu Limited, Schneider Electric SE, Eaton Corporation, Vertiv Co., Delta Electronics Inc., Rittal GmbH & Co. KG, ABB Ltd., Siemens AG, Hitachi Ltd., NEC Corporation, VMware Inc., Citrix Systems Inc., Red Hat Inc.

North America was the largest region in the data center generator market share in 2023. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the data center generator market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the data center generator market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The primary product categories for data center generators include diesel, gas, and other options, categorized by capacity as < 1 MW, 1 MW-2 MW, and >2 MW. Diesel, also known as distillate fuel oil, is the fuel of choice for running diesel generators in data centers. These generators adhere to tier standards, namely tier I & II, tier III, and tier IV, signifying varying levels of reliability and redundancy.

This report provides data center generator market statistics, including data center generator industry global market size, regional shares, competitors with a data center generator market share, detailed data center generator market segments, market trends and opportunities, and any further data you may need to thrive in the data center generator industry. This data center generator market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The data center generator market consists of sales of backup power controls, redundant data connections, and communications, server room cooling units, and security controls. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.


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