Data Center Power Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2024 - 2030)

Data Center Power Market Size

Data Center Power Market Trends & Growth Drivers

Deployment of 5G Networks Is Major Market Trend

• 5G networks are projected to play a critical role in assisting governments and policymakers in transforming cities into smart cities, thereby allowing inhabitants to realize and participate in the socioeconomic benefits provided by an advanced, data-intensive, digital economy.
• Apart from merely smart cities, 5G will drive all crucial data-intensive applications in the future, such as video conferencing, connected factories, self-driving vehicles, satellite communications, and digital health.
• As per reports, by 2028, 5G data traffic would reach 2,600 Exabytes, which would be more than 75% of all the technology data traffic.
• Further, the GSM Association expects a third of the worldwide population to have access to 5G.
• By the end of 2023, 300 services had already been launched across the globe, according to Ericsson.
• Thus, authorities are building and upgrading passive assets, such as fiber networks and data centers.

Enormous Growth in Data Generation Drives Market

• One of the primary factors driving the growth of the industry is the fast-expanding data generation.
• In 2020, about 64.2 zettabytes of data were generated, a 314% increase over 2015. 
• Furthermore, 2.5 quintillion bytes of data are generated globally every day, and this number is expected to cross 147 ZB by the end of 2024.
• With the introduction of IoT and the widespread adoption of social media platforms, nearly 90% of the world's data was created in the last four to five years.
• The increase in data generation is being driven mostly by the massive usage of machine-to-machine, embedded, and IoT devices.
• Other sources include videos and images, content for entertainment and functional applications, such as security and advertising, as well as productivity-driven data, such as the log files on computer systems and servers.
• This data is used by businesses to improve their products and services, maintain consumer relations, and increase profitability.

Emission Concerns with Gensets Are Biggest Restraint for Market

• The biggest restraint in the growth of the market is the emission concerns associated with generators.
• There is no limit to the power output of the gensets used in these facilities, which depends on the size of the data center and its tier, number of servers and other electrical appliances, and the allover electrical load.
• Since diesel gensets are used as the preferred backup power source, data centers are a prominent source of GHG emissions around the world.
• Although these facilities only account for 1% of the total emissions, when considering the total amount, their contribution is quite significant.
• This is why they must use gensets compliant with the latest emission regulations around the world for non-road engines.
• The models that comply with these regulations have advanced technologies and additional components to reduce emissions, which makes them expensive.
• Further, depending on the data center tier, a duplicate set of generators might be required to maintain the mandated redundancy, thus further increasing operational costs.

Data Center Power Market Analysis

Data Center Tier Insights

The tier III & tier IV category leads the market, with 70% revenue share, in 2024. It will also witness the higher CAGR, of 6.8%, during the forecast period. This is largely due to the fact that these categories offer N+1 and 2N redundancy, which means the architecture can sustain the entire IT load, while also including extra components for power backup, thus ensuring that performance is not harmed if a single component fails. During a disturbance, redundant systems take over, to ensure operations are not affected.

Some other benefits of tier III & tier IV variants include 99.982% and 99.995% uptime, respectively, a maximum of 26.3 minutes to 1.6 hours of downtime per year, N+1 fault tolerance, ensuring at least 72-hour power outage protection, and power-packed arrangement to deal with undesirable events, such as component failures, power fluctuations, and catastrophes.

Data centers of the following tiers have been analyzed:

• Tier I & Tier II
• Tier III & Tier IV (Larger and Faster-Growing Category)

Equipment Type Insights

UPS systems dominate the market in 2024, with 40% share. This is because they ensure the continuous operations of large data centers and protect critical equipment across the facility. They include multiple configurations and dual-bus capabilities to ensure critical systems continue to operate in the event of power outages, blackouts, sags, and surges. UPS systems for the modular creation of a fully redundant power and control system can be sized to meet the critical equipment's power requirement. When power needs change, the capacity may be simply added, without expanding the system footprint. Owing to such factors, the installation of UPS systems in the data center power infrastructure is significantly high.

The PDUs category will grow the fastest, with 7.2% CAGR, during the forecast period. They receive power from the grid and distribute it to various data center systems via individual sockets. Moreover, modern PDUs integrated with IoT provide real-time power consumption insights and operational data, allowing operators to predict malfunctions before they occur.

The following equipment types have been covered:

• UPS Systems (Largest Category)
• Generators
• Transfer Switches & Switchgears
• PDUs (Fastest-Growing Category)
• Others

Data Center Size Insights

The large category is the larger in 2024, and the faster-growing over this decade, with 7.0% CAGR. Facilities over 25,000 square feet in floor area fall in this category, and they have multiple servers, network switches, lighting panels, HVAC systems, fire and intrusion alarms, and other electrical systems. Therefore, their electricity requirement is much more than that of small and mid-sized facilities. Additionally, the growing focus on hyperscale data centers, which are huge facilities that can operate more cost-effectively due to economies of scale, drives the market in this category.

The segment is bifurcated as follows:

• Small and Medium
• Large (Larger and Faster-Growing Category)

Vertical Insights

The IT and telecom category is expected to dominate the vertical segment with a share of 35% in 2030. It will also witness the highest CAGR during the forecast period. Huge amounts of data are being generated as a result of the extensive use of advanced technologies, such as IoT, cloud computing, and AI. This data originates from mobile internet usage, personnel records, network equipment, server logs, billing activity, and social networks.

The report covers the below-mentioned verticals:

• BFSI
• IT and Telecommunications (Largest and Fastest-Growing Category)
• Healthcare
• Government and Defense
• Retail and E-Commerce
• Others

Geographical Analysis

In 2024, North America holds the largest revenue share in the data center power market, of 40%. This is ascribed to the region's substantial investment in R&D, which is resulting in the establishment of next-generation facilities, which are more technologically advanced and efficient in terms of power management. It is also home to a number of data center developers, which is expected to have a positive impact on the market. The U.S. has a massive lead in the number of data centers around the world, with over 5,300, which is almost 10 times more than the next contender—Germany—which has around 520.

Moreover, APAC is projected to be the fastest-growing region in the coming years, with 7.5% CAGR, due to the deployment of edge computing locations across many countries, including India, Japan, and China. Furthermore, the government of these countries is promoting data centers, as well as investing heavily in infrastructure development.

In February 2021, under a 10-year plan aimed at developing Malaysia's digital economy, the Malaysian government planned to spend up to USD 13 billion (RM 56 billion) on infrastructure, for faster and wider internet connectivity.

In September 2020, India's Ministry of Electronics and Information Technology declared that it is working to increase the digital economy's contribution to 20% of the GDP in the next five years.

These regions and countries have been studied:

• North America (Largest Regional Market)
  • U.S. (Larger and Faster-Growing Country Market)
  • Canada
• Europe
  • U.K.
  • Germany (Largest Country Market)
  • France
  • Italy
  • Spain
  • Netherlands (Fastest-Growing Country Market)
  • Rest of Europe
• Asia-Pacific (APAC) (Fastest-Growing Region)
  • China (Largest Country Market)
  • India (Fastest-Growing Country Market)
  • Japan
  • South Korea
  • Australia
  • Rest of APAC
• Latin America (LATAM)
  • Brazil (Largest and Fastest-Growing Country Market)
  • Mexico
  • Rest of LATAM
• Middle East and Africa (MEA)
  • Saudi Arabia (Largest Country Market)
  • U.A.E. (Fastest-Growing Country Market)
  • South Africa
  • Rest of MEA

Data Center Power Market Share

The data center power market is fragmented as a large variety of components and pieces of equipment is available for various purposes. Since the basics of electricity distribution are the same everywhere, these components do not require massive investments in R&D and manufacturing, thus lowering the entry barriers for smaller players. Further, depending on the size and load, data centers require power distribution, conversion, and transmission systems of different power ratings, which allows companies with the capacity to produce low-power components to be in business too.

Data Center Power Market News

• In July 2024, Toshiba Corporation launched the TCKE9 Series of eight high-voltage electronic fuses to protect power supply lines. These compact fuses, rated from 3.3 to 20 Volts, have diverse applications, including servers, laptop PCs, SSDs, AR/VR, and gaming consoles.
• In June 2024, Legrand SA announced the acquisition of Davenham, an Irish manufacturer of low-voltage power distribution systems, such as switching, protection, energy distribution, and metering; and VASS, an Australian company offering busbars. Both the acquired companies majorly cater to data centers.
• In May 2024, Schneider Electric SE operationalized a new 28,000-square-meter smart factory in Dunavecse, Hungary. This green, engineered-to-order factory will manufacture SF6-free medium-voltage switchgear for export across Europe.
• In March 2024, Delta Electronics Inc. exhibited its HPR 33-kW power shelf and open-rack version 3 (ORV3) 1OU 18-kW power shelf for AI infrastructure at Data Center World London, organized on March 6 and 7.