Global Data Center Energy Storage Market Size, Share & Trends Analysis Report By Type (Tier 3, Tier 4, Tier 2, and Tier 1), By Application, By Regional Outlook and Forecast, 2024 - 2031

Global Data Center Energy Storage Market Size, Share & Trends Analysis Report By Type (Tier 3, Tier 4, Tier 2, and Tier 1), By Application, By Regional Outlook and Forecast, 2024 - 2031

The Global Data Center Energy Storage Market size is expected to reach $2.6 billion by 2031, rising at a market growth of 8.8% CAGR during the forecast period.

The North America region witnessed 39% revenue share in this market in 2023. This leadership position can be attributed to several key factors, including the region's advanced technological infrastructure and high adoption rates of innovative technologies. North America is home to many of the world's leading data centers and tech giants, such as Google, Amazon, and Microsoft, which continuously invest in expanding their data storage and processing capabilities.

The major strategies followed by the market participants are Product Launches as the key developmental strategy to keep pace with the changing demands of end users. For instance, In July, 2024, Siemens AG has launched a new Center of Competence for Data Centers in Chennai, India, uniting over 200 experts. This facility aims to enhance innovation and support the rapidly growing APAC Data Center market, focusing on modular, scalable power solutions. Moreover, In July, 2024, ABB Group has launched a new range of innovative switches and sockets in Vietnam, enhancing safety, convenience, and smart integration for residential and commercial buildings. The ORIGEN, INORA, and ZENIT lines prioritize user-friendly features while meeting high safety standards.

KBV Cardinal Matrix - Data Center Energy Storage Market Competition Analysis

Based on the Analysis presented in the KBV Cardinal matrix; General Electric Company and Huawei Technologies Co., Ltd. are the forerunners in the Data Center Energy Storage Market. In March, 2021, Huawei Technologies Co., Ltd. introduced new modular data center and power solutions, including the FusionModule series and the ultra-high-density UPS5000-H, which supports up to one megawatt of power per rack. The solutions feature compact designs, smart battery systems, and integrated power management to enhance efficiency and adaptability in edge and small data centers. Companies such as Schneider Electric SE, Siemens AG, and ABB Group are some of the key innovators in Data Center Energy Storage Market.

Market Growth Factors

The demand for uninterrupted power supply in data centers is a primary driver for the energy storage market. Data centers house critical infrastructure for businesses and service providers, making continuous operation essential. Any power disruption can lead to significant financial losses, data corruption, and operational downtimes, necessitating robust energy storage solutions that ensure seamless power backup. In conclusion, the rising demand for uninterrupted power supply in data centers propels the market's growth.

Additionally, The rising energy costs are a significant concern for data center operators, as energy consumption is among the highest operating expenses. Energy storage systems offer a solution by enabling data centers to store energy during off-peak hours when electricity rates are lower and use it during peak hours, thus reducing energy costs. This cost optimization is critical for maintaining profitability and competitiveness in the industry. Therefore, increasing energy costs and the need for cost optimization propel the market's growth.

Market Restraining Factors

However, One of the primary restraints on this market is the high initial investment required to deploy energy storage systems. The costs associated with purchasing, installing, and maintaining these systems can be substantial, posing a significant barrier to adoption, especially for small and medium-sized data centers with limited budgets. Thus, high investment costs for energy storage systems hamper the market's growth.

The leading players in the market are competing with diverse innovative offerings to remain competitive in the market. The above illustration shows the percentage of revenue shared by some of the leading companies in the market. The leading players of the market are adopting various strategies in order to cater demand coming from the different industries. The key developmental strategies in the market are Product Launches and Product Expansions.

Type Outlook

Based on type, the data center energy storage market is divided into tier 3, tier 4, tier 2, and tier 1. The tier 4 segment attained 30% revenue share in this market in 2023. Tier 4 data centers are designed to offer the highest levels of reliability and performance, with an uptime of 99.995%, translating to approximately 26.3 minutes of downtime annually. Characterized by their 2N+1 fully redundant infrastructure, tier 4 data centers ensure that all systems have at least two independent power sources and cooling, enabling continuous operation even if multiple components fail.

Application Outlook

On the basis of application, the data center energy storage market is segmented into BFSI, manufacturing, retail & e-commerce, healthcare, entertainment & media, and others. In 2023, the manufacturing segment attained 21% revenue share in this market. The sector's reliance on advanced automation, real-time data analytics, and IoT technologies drives the need for robust and efficient energy storage solutions. Modern manufacturing processes increasingly depend on continuous data flow for monitoring production lines, optimizing operations, and ensuring quality control.

Regional Outlook

Region-wise, the data center energy storage market is analyzed across North America, Europe, Asia Pacific, and LAMEA. The Asia Pacific region generated 30% revenue share in this market in 2023. Rapid digital transformation and increasing internet penetration across countries such as China, India, and Japan drive the demand for robust data storage and processing infrastructure. The region's expanding IT sector, coupled with the rise of e-commerce, social media, and cloud computing, necessitates the development of advanced data centers equipped with reliable energy storage solutions to support the growing data traffic and ensure seamless operations.

Market Competition and Attributes

The Data Center Energy Storage Market remains competitive, with numerous emerging players offering innovative solutions. Companies focus on enhancing energy efficiency, scalability, and sustainability to meet growing demand. Market growth is driven by advancements in battery technologies, energy optimization strategies, and increased investments in green energy. The absence of dominant players allows for a diverse range of solutions and dynamic competition.

Recent Strategies Deployed in the Market

• Oct-2024: Siemens AG has formed a strategic partnership with Alliander to improve flexible grid management in the Netherlands. By implementing the Gridscale X platform, the collaboration aims to boost grid utilization by up to 30%, effectively addressing energy transition challenges and enhancing reliability for 3.5 million customers.
• Jun-2024: Schneider Electric SE has signed an agreement with Compass Data Centers, specializing in data center design and construction. This five-year deal addresses the increased demand for data centers driven by the AI boom. The collaboration extends their joint venture to deliver prefabricated modular data center equipment from a new manufacturing facility in Texas, enhancing construction efficiency and quality across the U.S.
• May-2024: Eaton Corporation plc acquired Exertherm, a U.K.-based provider of thermal monitoring solutions for electrical equipment. This acquisition enhances Eaton's capabilities in continuous thermal monitoring, improving safety and reliability in critical markets such as data centers. By integrating Exertherm's innovative technology into its Brightlayer software suites, Eaton aims to help customers optimize operations and enhance business performance through effective data utilization.
• Mar-2024: Eaton Corporation plc has launched its SmartRack modular data center solution, designed to accommodate up to 150kW of equipment load, catering to the rising demand for edge computing and AI. The modular units can be rapidly deployed in various facilities, enabling organizations to meet the challenges of modern computing needs efficiently. This offering integrates seamlessly with Eaton's cooling systems, PDUs, UPSs, and Brightlayer software for enhanced management and monitoring.
• Apr-2024: Schneider Electric SE has launched the EasySet MV, a new compact and sustainable air-insulated indoor switchgear. Designed for ease of installation and maintenance, it features vacuum circuit breaker technology, enhanced monitoring capabilities, and improved reliability, setting a new standard in electrical distribution.

List of Key Companies Profiled

• Schneider Electric SE
• Siemens AG
• General Electric Company
• Eaton Corporation plc
• ABB Group
• Huawei Technologies Co., Ltd. (Huawei Investment & Holding Co., Ltd.)
• Delta Electronics, Inc.
• Mitsubishi Electric Corporation
• Legrand S.A. (Legrand Group)
• Vertiv Holdings Co.

Global Data Center Energy Storage Market Report Segmentation

By Type

• Tier 3
• Tier 4
• Tier 2
• Tier 1

By Application

• BFSI
• Manufacturing
• Retail & E-commerce
• Healthcare
• Entertainment & Media
• Other Application

By Geography

• North America
• US
• Canada
• Mexico
• Rest of North America
• Europe
• Germany
• UK
• France
• Russia
• Spain
• Italy
• Rest of Europe
• Asia Pacific
• China
• Japan
• India
• South Korea
• Australia
• Malaysia
• Rest of Asia Pacific
• LAMEA
• Brazil
• Argentina
• UAE
• Saudi Arabia
• South Africa
• Nigeria
• Rest of LAMEA