Green Data Center Market Size, Share & Industry Analysis, By Component (Solution and Services), By User (Colocation Providers, Cloud Service Providers (CSPs), and Enterprises), and Regional Forecast, 2024 – 2032

The global green data center market size was valued at USD 70.58 billion in 2023. The market is projected to grow from USD 81.75 billion in 2024 to USD 307.52 billion by 2032, exhibiting a CAGR of 18.0% during the forecast period.

A green data center is a service facility that hosts servers to store, manage, and distribute data using energy-efficient technologies. The data centers do not comprise outdated systems and use newer and resource-efficient technologies. With the growing demand for data storage, operators have witnessed an increase in the deployment of power and cooling systems. As a result, green or sustainable data centers presents a viable solution for a greener future.

Key plyers such as Cisco Systems, Inc., HP Inc. (U.S.), Hitachi Ltd (Japan), and Schneider Electric SE (France) are adopting are offering ECO modes in UPS that helping to drive the adoption of green data centers globally.

The COVID-19 pandemic forced many businesses around the world to gradually adjust to a new normal. With the increasing popularity of work-from-home culture, hyperscale companies such as Google, AWS, Microsoft, and others have been working tirelessly to meet the high demand for cloud infrastructure. A large amount of data has been generated due to online learning, remote working, and the increasing consumption of digital technology. This has led to an increased demand for data centers to support growing online businesses, including e-commerce, video conferencing, and OTT streaming.

Impact of Generative AI

Implementing Gen-AI in Green Data Center to Optimize Energy Consumption to Bolster Market Growth

Generative AI can analyze historical energy consumption data to predict future usage patterns, enabling data centers to optimize energy consumption and reduce waste. AI can generate models that predict temperature fluctuations and adjust cooling systems accordingly, minimizing energy consumption while maintaining optimal operating conditions. The integration of Gen-AI benefits data centers and aligns with broader sustainability goals within the tech industry.

MARKET TRENDS

Increasing Adoption of Renewable Energy Resources to Reduce Carbon Footprint to Bolster Market Growth

The growing need for energy-efficient infrastructure and increasing adoption of renewable energy resources, such as solar, wind, hydroelectric, and geothermal energy will drive the green data center market growth. By relying on clean energy, sustainable data centers can significantly reduce their carbon emissions compared to conventional data centers that heavily rely on fossil fuels.

Moreover, these data centers often seek certifications from recognized environmental standards, such as LEED (Leadership in Energy and Environmental Design) or BREEAM (Building Research Establishment Environmental Assessment Method). Companies are deploying energy-efficient green technologies in their data centers to tap into the untapped potential of sustainability. For instance,

• In September 2022, Nxtra (a subsidiary of Bharati Airtel) joined Bloom Energy to install a fuel cell with a low environmental impact in the Karnataka data center. The company aimed to reduce its carbon footprint through a cleaner, hydrogen-ready fuel supply.

MARKET DYNAMICS

Market Drivers

Rapid Emergence of Artificial Intelligence in Power & Cooling Technologies to Drive Market Growth

Using emerging technologies, such as Artificial intelligence (AI) and Machine Learning (ML), in green data centers aids in automating various processes and reducing the carbon footprint. With digital transformation gaining momentum across industries, the demand for data services is increasing rapidly. The operators are addressing these problems by deploying AI in their infrastructure coupled with IoT and ML. In addition, digital twins with AI and ML aid data centers in reducing their carbon footprint. For instance,

• In May 2023, Huawei launched the Fan Wall Chilled Water Cooling Solution and PowerPOD 3.0 at the Huawei Green Data Center Summit. The company launched Artificial intelligence (AI) -based power and cooling products in the Asia Pacific market that aid the data centers in the region in improving their sustainability.

These factors are the key market drivers that will aid in the adoption of green data centers.

Market Restraints

Cost Considerations Associated with Initial Investment & Modifying Existing Infrastructure to Impede Market Progress

The initial investment in building a sustainable data center with energy-efficient technologies is higher than that of a traditional one. The energy costs of these data centers exceed the overall investments in IT infrastructure, making it difficult for small and mid-sized data center operators to deploy such solutions. However, companies are investing in these data centers owing to the long-term payback from their initial investments.

Market Opportunities

Rising Environmental Sustainability Initiatives Creating Excessive Opportunities for the Market

The rise of environmental sustainability initiatives is a major driver for the adoption of green data center solutions worldwide. One of the key drivers for organizations is the growing desire to align with sustainability goals. Many companies have set ambitious goals to reduce greenhouse gas emissions and minimize their environmental impact.

Green data centers, designed to be energy efficient and environmentally friendly, play a key role in helping businesses achieve these goals. By optimizing energy consumption, cooling systems, and resource management, these data centers significantly lower the energy consumption and reduce carbon emissions.

The above chart indicates environmental sustainability for professional practices. A total of 55% of participants agreed that environmental sustainability is essential in their daily professional practice, while only 1% of participants disagreed with this statement.

SEGMENTATION

By Component Analysis

Increasing Need for Expert Services Fuels the Services Segment Growth

Based on component, the market is divided into solution and services.

The solutions segment is further divided into power systems, monitoring & management systems, cooling/HVAC systems, and networking systems. The solutions segment holds the largest share in the market owing to the rising demand for efficient power and cooling systems required for sustainable data centers. Cooling solutions are in charge of maintaining and running adequate technologies for IT equipment. Moreover, the power system in these data centers involves using high-efficiency Power Distribution Units (PDUs) and uninterruptible power supplies that minimize overall electricity consumption.

The services segment is expected to record the highest CAGR due to their growing demand for green technologies. Professional service providers offer expertise in customized solutions and best practices for energy efficiency, cooling, and renewable data integration.

By User Analysis

Growing Prioritization of Environmental Responsibility and Sustainability Helping In Enterprise  Demand and Market Growth

Based on user, the market is categorized into colocation providers, Cloud Service Providers (CSPs), and enterprises.

The enterprise segment holds the largest share in the market due to the growing prioritization of environmental responsibility and sustainability among enterprise owners in their operations.

The colocation providers segment is expected to register the fastest CAGR during the forecast period owing to its growing popularity among green and sustainable data center businesses. Colocation providers serve multiple clients by consolidating their IT infrastructure in a shared facility. Their services result in better efficiency and reduced environmental impact compared to individual enterprise data centers. Moreover, businesses with budget constraints can optimize the services offered by colocation providers.

GREEN DATA CENTER MARKET REGIONAL OUTOOK

Based on geography, the market is studied across North America, Europe, Asia Pacific, the Middle East & Africa, and South America.

North America

North America holds the largest green data center market share owing to the large number of data centers in the region. North America is witnessing high investments by colocation providers and hyperscale data center operators. For instance,

• As per industry experts, the U.S. colocation data center has doubled in just the last four years, with the total number of data centers increased by 95% in the U.S. since 2020.

Moreover, the presence of key players presents ample growth opportunities for market growth. Many colocation providers in the region are signing Power Purchase Agreements (PPAs) and utilizing renewable energy to power their facilities.

In North America, the U.S. holds the largest market share due to its advanced technology infrastructure and stringent environmental regulations. The country is adopting green data center practices as businesses look to reduce operating costs and environmental impact.

Asia Pacific

Asia Pacific is expected to record the highest CAGR during the forecast period owing to the burgeoning IT sector and rapid utilization of digital technologies. Several countries in the Asia Pacific region have introduced regulations and incentives to promote green initiatives and reduce carbon emissions. Moreover, many data center companies have set sustainable goals and are increasingly offering solutions that are environment-friendly. For instance,

• In July 2023, Huawei unveiled three green data center facility solutions at the Global Smart Data Center Summit. Some of the solutions include AeroTurbo fans, IceCube polymer heat exchangers, and iCooling AI energy efficiency cooling solutions.

South America

South America is witnessing an increasing demand for sustainable data center services in Argentina, Chile, Brazil, and others. As per Cloudscene, a data-driven marketplace platform, Brazil has more than 120 data centers. Factors such as government regulations, environmental policies, adoption of advanced technologies, and corporate sustainability initiatives also drive the regional market development.

Europe

Europe is likely to grow significantly over the years owing to the region's rising environmental initiatives and data center regulatory policies. Data center operators must adhere to the European regulatory bodies, including the Ecodesign Regulation for data storage, the EU Code of Conduct for Energy Efficiency, and the EU Green Public Procurement standards for server rooms, data centers, and cloud computing services. Thus, due to its commitment to sustainability, the region will witness tremendous growth in the forthcoming years.

Middle East & Africa

The Middle East & Africa region also holds great market potential owing to the abundance of renewable energy across the region. Utilizing energy resources, such as wind and solar to power green data centers aligns with the region’s sustainability goals and can contribute to the growth of these facilities.

COMPETITIVE LANDSCAPE

Key Industry Players

Key Players’ Different Initiatives Helping in Escalating their Sales and Grow the Market

Major players are collaborating and partnering with similar companies to bring significant financial gains to both companies. Partnerships aid companies in escalating their sales and cutting down costs by sharing or combining resources. For instance,

• June 2023: Cyberlink, an ICT infrastructure service provider, partnered with Green, a data center provider, to expand its data center backbone. The partnership aided Cyberlink in offering its infrastructure services to three green data centers in Lupfig, Dielsdorf, and Schlieren.

List of Companies Studied:

• Dell EMC Inc. (U.S.)


• Fujitsu Ltd (Japan)


• Cisco Systems, Inc. (U.S.)


• HP Inc. (U.S.)


• Hitachi Ltd (Japan)


• Schneider Electric SE (France)


• IBM Corporation (U.S.)


• Eaton Corporation (Ireland)


• Vertiv Corporation (U.S.)


• Green Revolution Cooling, Inc. (U.S.)


• HCL Technologies Limited (India)


• Iron Mountain, Inc. (U.S.)


• Ark Data Centers (U.K.)


• TATA Consultancy Services Limited (India)


• Adobe Systems (U.S.)


• Delta Electronics (Taiwan)


• Nortek Solutions (U.S.)


• Tripp Lite (U.S.)


• Inspur (China)


• Araner (Dubai)

KEY INDUSTRY DEVELOPMENTS:

• June 2024: Hewlett Packard Enterprise and Danfoss partnered to offer HPE IT Sustainability Services – Data Center Heat Recovery. This ready-to-use heat recovery module helps organizations manage and recover excess heat as they move to more sustainable IT installations.


• May 2024: Microsoft announced the availability of its first data center region in Mexico and Central Mexico to all organizations worldwide, offering local access to scalable, vastly available, and resilient cloud services.


• December 2023:  Vertiv acquired CoolTera Ltd., a provider of liquid cooling solutions for high-density computing/AI. The addition of CoolTerra strengthened Vertiv's expertise in high-density cooling solutions and enhanced its ability to serve global data center customers and their needs for AI at scale.


• December 2023: Liberation Technology Services (LTS) partnered with E-New Data Corp. to revolutionize the data center landscape by building a state-of-the-art, environmentally friendly facility in 2024. The partnership between LTS and E-New Data Co., Ltd. helped reduce power and water consumption compared to traditional data centers.


• October 2023: SAP SE announced that SAP cloud solutions are expected to be available in a local data center based in India starting mid-2024. The new SAP presence would help promote and ensure a resilient, trusted, and risk-mitigated environment for business-critical applications.


• May 2023: Sonic Edge, a U.K.-based modular data center firm, partnered with Deep Green to offer its customers low power costs through immersion cooling technologies. The partnership would aid Sonic Edge in launching 50 new HPC/EdgePods across the U.K. by 2024.

INVESTMENT ANALYSIS AND OPPORTUNITIES

Increasing awareness of climate change and environmental degradation is prompting companies to seek sustainable practices. Data centers, being significant energy consumers, are under pressure to reduce their carbon footprints. Utilizing data analytics to monitor energy usage and optimize performance can enhance efficiencies. The shift toward green data centers is not just a green data center market trend; it is a crucial component of a modern business strategy focused on sustainability and efficiency.

REPORT COVERAGE

The report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product/service types, and leading applications of the product. Besides, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that contributed to the growth of the market in recent years.

REPORT SCOPE & SEGMENTATION

ATTRIBUTE	DETAILS
Study Period	2019-2032
Base Year	2023
Estimated Year	2024
Forecast Period	2024-2032
Historical Period	2019-2022
Growth Rate	CAGR of 18.0% from 2024 to 2032
Unit	Value (USD Billion)
Segmentation	By Component Solution Power System Monitoring & Management System Cooling/HVAC System Networking System Services Professional Managed By User Colocation Providers Cloud Service Providers (CSPs) Enterprises By Region North America (By Component, User, and Country) U.S. (By User) Canada (By User) Mexico (By User) South America (By Component, User, and Country) Brazil (By User) Argentina (By User) Rest of South America Europe (By Component, User, and Country) U.K. (By User) Germany (By User) France (By User) Italy (By User) Spain (By User) Russia (By User) Benelux (By User) Nordics (By User) Rest of Europe Middle East & Africa (By Component, User, and Country) Turkey (By User) Israel (By User) GCC (By User) North Africa (By User) South Africa (By User) Rest of the Middle East & Africa Asia Pacific (By Component, User, and Country)   China (By User) India (By User) Japan (By User) South Korea (By User) ASEAN (By User) Oceania (By User) Rest of Asia Pacific
Companies Profiled in the Report	Dell EMC Inc. (U.S.), Fujitsu Ltd (Japan), Cisco Systems Inc. (U.S.), HP Inc. (U.S.), Hitachi Ltd (Japan), Schneider Electric SE (France), IBM Corporation (U.S.), Eaton Corporation (Ireland), Vertiv Corporation (U.S.), and Green Revolution Cooling, Inc. (U.S.)