Analyst: Market for close-coupled data center cooling is, well, cool

June 2, 2014
IHS says in-row- and in-rack cooling market fell 5 to 6 percent in 2013, as few facilities have the high densities where these solutions make the most sense.

The report “Data Center Cooling – World – 2014” authored by IHS senior analyst of data center and critical infrastructure Elizabeth Cruz, says that “despite years of high hopes for growth of the in-row and in-rack data center cooling segment, sales for these close-coupled cooling products are not producing the double-digit growth once hoped for.” The study found that revenues for these close-coupled cooling technologies fell 5 to 6 percent in 2013. It also said the perimeter-cooling market declined 2 to 3 percent last year.

Cruz explained, “There are a few reasons for the decline of row/rack revenue. These products are used either as standalone cooling solutions in small data centers or as supplementary cooling in high-density applications The first issue is that an increasing number of companies are outsourcing their small data centers to colocation or cloud providers, which tend to be large data centers that use traditional room cooling.”

The reason these cooling units haven’t taken off in high-density applications either is that “row/rack products offer significant energy savings once rack densities approach the 8- to 10-kW range,” IHS added. “At that point, it becomes more efficient to install a row/rack product that to increase the flow or air from a CRAC or CRAH unit to cool down a hotspot in a data center. However, with average rack densities still in the sub-5kW range, the operational savings from a row/rack product are not realized, and the justification for the higher investment cost is difficult to make. There are a number of data centers that operate at higher densities, and these are the facilities helping to underpin the moderate growth projections for the next five years. But these are comparatively few relative to the large population of low-power-density data centers.”

IHS and Cruz further explain that the data center market overall is sluggish. “IHS tracks nearly all segments of the data center infrastructure market and has witnessed continued contraction of revenue over the last two years,” IHS said. Cruz added, “We see several reasons for the sluggishness in the data center segment. First is the economy; this is still a major factor in companies putting off large capital investments like data center builds. Second is the fact that companies are consolidating their data center operations by outsourcing to colocation or cloud providers by moving what small data centers they do have into one centralized location. This consolidation leads to more optimized data centers, which maximize efficiency and reduce the need for power and cooling. Third, growing adoption of virtualization and improvements in server technology lead to an increased computer performance per watt, which then requires less power and cooling backup.”

The research firm predicts that in the medium-term, the data center market will return to growth “as consolidation and technology improvements can no longer absorb the increased digitization and resulting compute, storage, and processing needs.” Cruz concluded that “when the market returns, IHS does expect there to be an eventual increase in densities that will again call for high-density cooling solutions like row/rack products. This just might be a little further out than originally expected.”

You can find out more about the report here.

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