Sustainability to push datacentre infrastructure spend to $31bn by 2026

• Datacentre physical infrastructure revenue is to exceed $31bn in 2026, according to a new Dell’Oro Group report
• Demand will remain resilient despite macroeconomic headwinds
• Uptake of sustainability initiatives is seen as a driving force for the market segment growth
• Datacentres increasingly use thermal management systems, such as liquid cooling, to minimise environmental impact

Datacentre physical infrastructure (DCPI) is expected to surpass $31bn in revenue by 2026, with the growth largely driven by expansion from players who place sustainability on top of their agenda, according to market analysis and research company Dell’Oro Group.

The firm’s latest report covers hardware equipment, such as uninterruptible power supply (UPS), thermal management, IT racks and containment, as well as software and service (primarily related to the maintenance of UPS and thermal management systems).

Growing at a compound annual growth rate (CAGR) of 8% to 2026, the revenue in the segment is related to resilient demand, despite the developing macroeconomic uncertainties and near-term supply chain constraints, stated Lucas Beran, principal analyst at Dell’Oro Group.

The fastest growth rate is expected in China, followed by the Asia-Pacific region (excluding China), and Europe, the Middle East and Africa. It is predicted to be largely driven by the service providers customer segment (including cloud, colocation and telecoms players), which is set for a double-digit CAGR in the period.

The rise of sustainability efforts

Apart from the bullish prognosis on revenue, another important emerging trend relates to what is considered the most pressing challenge of our time: Tackling climate change by reducing the overall environmental impact from companies’ operations (and those of people, for that matter).

“Most importantly, datacentre sustainability has risen to the top of decision-making criteria in the industry, opening the door for significant technology transitions during this forecast period. The most exciting is the acceleration of datacentre liquid cooling, as both direct liquid cooling (DLC) and immersion cooling (single-phase and two-phase) are forecast to grow significantly and surpass $1bn in market revenue by 2026,” explained Beran.

The fastest growth rate is forecast for the value of the total datacentre thermal management market (which includes air-based thermal management, such as perimeter cooling, air handling units and chillers), which is expected to reach $6bn in 2026.

Beran told TelecomTV that liquid cooling is seen as the technology “with the greatest potential impact in datacentre sustainability, increasing datacentre thermal management efficiency (reducing energy usage) and reducing water usage”, though there are trends for datacentre providers to utilise other methods as well.

For instance, the UPS is moving into a grid-interactive system where it can provide backup power to the datacentre in case of a mains power failure, but now allows for proactive use of the energy storage assets of a datacentre. “Peak shaving, frequency regulation and demand response are a few notable applications of a grid-interactive UPS. These types of activities can help decarbonise the grid by supporting easier integration of renewables and can prevent the utility needing to fire up emergency generation (carbon emitting)”, the analyst noted.

Another trend is the adoption of sensors and management software to improve the industry’s ability to measure, monitor and manage energy use and, as a result, reduce energy usage and waste.

However, the analyst clarified that energy consumed by datacentres will still grow, but not “as much as it would have otherwise”.

In terms of cost for datacentre companies to use technologies such as liquid cooling for enhanced environmental sustainability, Beran explained that it depends on the type of the facility. “In a greenfield datacentre deployment, it’s possible to reduce capex [capital expenditure] and opex [operating expenses] associated with deploying datacentre liquid cooling. In reality, these systems are often retrofitted into existing datacentres, so there is less of a capex benefit but the opex benefit is significant”, the analyst added.

Telehouse Europe recently announced that it is trialling a real-time monitoring tool to check if some of the cooling units are not performing well enough and to suggest the required adjustments – see Telehouse turns to cutting-edge tech to make its datacentres more energy efficient.

Concerns over the energy efficiency of datacentres have been around for a while but seem more valid than ever as the demand for such facilities is booming in accordance with the rise in data traffic – see How many hyperscale datacentres does the world need? Hundreds more, it seems.

- Yanitsa Boyadzhieva, Deputy Editor, TelecomTV