Carbon Neutral Data Center Market - A Global and Regional Analysis: Focus on Product, Application and Country Analysis - Analysis and Forecast, 2022-2027

Carbon Neutral Data Center Market - A Global and Regional Analysis: Focus on Product, Application and Country Analysis - Analysis and Forecast, 2022-2027

Global Carbon Neutral Data Center Market Industry Overview

The global carbon neutral data center market was valued at $5.02 billion in 2021 and is projected to reach $16.53 billion in 2027, growing at a CAGR of 22.19% during the forecast period 2022-2027. The growth in the global carbon neutral data center market is expected to be driven by increasing government regulations on carbon emissions, emphasis on renewable energy, energy-efficient alternatives for data center cooling, electricity tariffs globally, efforts in sustainable developments, and CSR activities.

Market Lifecycle Stage

The carbon neutral data center market is still in a growing phase. The growth is attributed to the various environmental-friendly policies and government regulations. Increased research and development activities are underway to develop carbon neutral data center technologies and products, which are expected to increase due to the increased demand for data storage and digital transformation.

Impact

• With an increased worldwide focus on achieving climate-neutral goals and managing the demand for data storage, the shift from non-renewable energy sources to renewable energy sources in the data center industry brings significant opportunities.
• The shift is more prominent in regions such as Europe and North America. This is because countries in these regions which have natural colder climates almost throughout the year have the highest potential in the market.

Impact of COVID-19

Since 2019, the data center industry has witnessed a growth in the carbon neutrality of data centers. Even though other sectors have been adversely affected by the COVID-19 pandemic, data center operators have seen demand for data storage double and redouble, driven by increasing digitalization, cloud, AI, and 5G adoption, and the pandemic itself. The growth in remote work, video conferencing, and internet traffic alone caused by the pandemic have been the major factors for the boost of data center capacity, which increases the accelerating transition of regions such as Asia-Pacific and Middle-East and Africa toward fully digital economies.

In contrast, data center operators find themselves reshaping data centers more extensively and faster than ever before. Corporations and big technology companies are increasingly pledging to become carbon neutral, with companies across all sectors making bold carbon reduction commitments, such as the Climate Neutral Data Centre Pact announced in 2020.

Market Segmentation:

Segmentation 1: by Industry

• IT and Telecom
• Banking, Financial Services, and Insurance (BFSI)
• Government or Public Sector
• Healthcare
• Manufacturing
• Retail
• Others

The global carbon neutral data center market in the application segment is expected to be dominated by the IT and telecom industry. This is because the telecom industry is the largest consumer of data centers. Data centers are a crucial part of the ICT industry, as data transmission and data delivery operations require better connectivity.

Segmentation 2: by Data Center Type

• Hyperscale Data Centers
• Enterprise Data Centers
• Colocation Data Centers
• Others

The global carbon neutral data center market (by product, by data center type) is expected to be dominated by hyperscale data centers. This is because most of the leading hyperscale and cloud service providers have committed to going carbon neutral. These companies include Google LLC, Facebook, Microsoft, and Amazon AWS.

Segmentation 3: by Carbon Neutral Solutions

• Hardware
• Software and Platforms
• Support Services

The hardware segment dominates the global carbon neutral data center market based on solutions. This is because the data centers require specialized hardware that includes servers, racks, cooling systems, and others, and these devices are crucial for data center deployment and thus have the highest capital expenditure in a data center infrastructure.

Segmentation 4: by Region

• North America - U.S., Canada, and Mexico
• Europe - Germany, France, Netherlands, Sweden, Norway, Denmark, Finland, Iceland, Switzerland, and Rest-of-Europe
• U.K.
• China
• Asia-Pacific- Japan, Singapore, South Korea, and Rest-of-Asia-Pacific
• Rest-of-the-World - Middle East and Africa, and South America

Europe generated the highest revenue of $3.09 billion in 2021, which is attributed to the R&D advancements and supporting government regulations in the region. Europe is an attractive region for the carbon neutral data center market because of the availability of a favorable climate for the use of renewable sources of energy.

Recent Developments in Global Carbon Neutral Data Center Market

• In March 2022, Normative, a Swedish start-up sponsored by Google, released a free version of its carbon emissions tracker as businesses around the world struggled to figure out ways of managing their carbon impacts.
• In March 2022, Amazon Web Services (AWS) allowed customers to access a tool that measures the carbon footprint of cloud usage and compares it to the expected footprint of a data center located on-site.
• In May 2022, Alibaba Cloud, the foundation of Alibaba Group's digital technology and innovation efforts, announced the opening of its third sustainable data center in Germany to meet the growing demand for digital transformation from clients across Europe.
• In May 2022, nZero, a carbon management platform, and Corscale, the Patrinely Group's data center platform, partnered to provide customers with a sustainability solution that enables 24x7 carbon accounting and emission tracking.

Demand – Drivers and Limitations

Following are the demand drivers for the carbon neutral data center market:

• Government Regulations on Carbon Emissions and Rising Emphasis on Renewable Energy
• Growing Energy-Efficient Alternatives for Data Center Cooling
• Sustainable Development Efforts and CSR Activities
• Rising Electricity Tariffs Globally

The market is expected to face some limitations too due to the following challenges:

• High Dependence on Non-Renewable Energy for Running Data Center Operations
• Higher Costs of Implementation and Compatibility Issues

How can this report add value to an organization?

Product/Innovation Strategy: The product segment helps the reader understand the different types of carbon neutral data center technologies available for deployment in the data center sector and their potential globally. Moreover, the study provides the reader with a detailed understanding of different carbon neutral data center products by industry, by data center type, and by carbon neutral solutions.

Growth/Marketing Strategy: The global carbon neutral data center market has seen major development by key players operating in the market, such as business expansion, partnership, collaboration, and joint venture. The favored strategy for the companies has been partnerships and collaborations to strengthen their position in the carbon neutral data center market. For instance, in February 2022, Merkle Standard and BITMAIN formed a collaboration to build up to 500 MW of sustainable data center infrastructure.

Competitive Strategy: Key players in the global carbon neutral data center market analyzed and profiled in the study involve cloud service providers, power and cooling service provider, data center provider, and infrastructure manufacturers. Moreover, a detailed competitive benchmarking of the players operating in the global carbon neutral data center market has been done to help the reader understand how players stack against each other, presenting a clear market landscape. Additionally, comprehensive competitive strategies such as partnerships, agreements, and collaborations will aid the reader in understanding the untapped revenue pockets in the market.

Key Market Players and Competition Synopsis

The companies that are profiled have been selected based on inputs gathered from primary experts and analyzing company coverage, product portfolio, and market penetration.

Some of the prominent names established in this market are:

• 3M
• ABB Group
• Alibaba Group
• Alphabet Inc.
• Amazon.com, Inc.
• Cisco Systems, Inc.
• Dell Inc.
• Digital Realty Trust
• Eaton Corporation plc
• Equinix, Inc.
• FUJITSU
• Hewlett Packard Enterprise Development LP
• IBM Corporation
• Intel Corporation
• Microsoft
• ANS Group Limited
• NEXTDC LTD.
• CYRUSONE
• DEAC

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