South Africa Data Center Cooling - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2024 - 2029)

South Africa Data Center Cooling - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2024 - 2029)

The South Africa Data Center Cooling Market size is estimated at USD 202.5 million in 2024, and is expected to reach USD 568.90 million by 2029, growing at a CAGR of 23.20% during the forecast period (2024-2029).

Key Highlights

• The demand for data centers is driven by the increasing demand for cloud computing among SMEs, government regulations for local data security, and growing investment by domestic players.
• Under Construction IT Load Capacity: The Italian data center market's upcoming IT load capacity is expected to reach more than 828.9 MW by 2029.
• Under Construction Raised Floor Space: The country's construction of raised floor areas is expected to exceed 4.4 million sq. ft by 2029.
• Planned Racks: The country's total number of racks to be installed is expected to reach 220,200 units by 2029. Johannesburg is expected to house the maximum number of racks by 2029.
• Planned Submarine Cables: Many are under construction. One such cable, 2Africa, is estimated to start service in 2024. It stretches over 45,000 kilometers and has landing points in Cape Town, Mtunzini, and Port Elizabeth.
• New regional data centers are focusing on implementing state-of-the-art monitoring systems to mitigate the risks associated with extreme weather events. Many would use the latest, more energy-efficient cooling technologies, such as redundant cooling systems, smart monitoring technologies, and backup power generators, to ensure temperature consistency during power interruptions. Another example is direct liquid cooling, which uses a higher thermal transfer of water to a more efficient cooling device.

South Africa Data Center Cooling Market Trends

The IT & Telecom Segment is Expected to Have Significant Market Share

• Telecom and BFSI are expected to contribute the highest market share, while the manufacturing and e-commerce segments will record the highest growth of 21.85% and 22.17%, respectively, during the forecast period. The IT load capacities of the manufacturing and e-commerce segments may reach 66.05 MW and 83.94 MW, respectively, by 2029 due to the increasing Industry 4.0 initiatives in the manufacturing segment and the increasing 5G penetration.
• The telecom segment may continue its dominance due to the growing 5G connections. The 5G mobile data speed is expected to grow significantly and reach 407.59 Mbps by 2029, suggesting increasing data traffic and rising demand for data center servers in the segment.
• Major sectors in the country, such as e-commerce, healthcare, telecommunication, and government, are expected to make a significant impact on the demand for data center services and solutions as more service aggregators are trying to connect the urban population with rural cultures and heritage, giving a platform for MSMEs to grow in the country.
• The COVID-19 pandemic accelerated the confluence of a number of trends in the country's healthcare sector, most notably consumers' preference for accessibility and convenience. Healthcare systems transformed digitally, changing their operations, culture, and use of technology while also becoming more consumer-friendly.

Liquid Cooling is Expected to Have Significant Share

• In data centers, liquid cooling offers many benefits and is an attractive option to cool high-performance computing environments. The use of liquid cooling is more energy efficient than conventional air conditioning. It reduces the need for overcooling and improves the energy efficiency of data centers by providing precise temperature control.
• Technological advances have helped to reduce the data center's water consumption by more than 15% in tropical climates and 80% in green areas, making liquid cooling easier to maintain, scale up, or affordable. Energy used for liquid cooling may be recycled to heat buildings and drinking water, while advanced artificial refrigerants can significantly reduce the carbon footprint of air conditioners.
• Liquid cooling takes advantage of the space constraints and superior heat transfer properties of water or other liquids to provide efficient and cost-effective cooling of high-density racks up to 3,000 times more efficiently than air. Long proven in mainframe and gaming applications, liquid cooling is increasingly used to protect rack servers in regional data centers. Vertiv has introduced the Liebert XDU, a water-efficient liquid cooling solution designed for high-density data centers. This new generation of thermal management systems supports liquid-cooled servers and allows for control of liquid quality, flow, and pressure.
• Also, the government is expected to make more investments to innovate in areas such as quantum computing, artificial intelligence, and applications utilizing 5G and 6G technologies. It aims to attain full 5G coverage, for which it planned a 5G spectrum auction in 2023. Such aspects are expected to complement the growth and demand for data processing facilities in the telecom industry, resulting in the rise of demand for DC cooling infrastructure in the country.
• Along with the growing adoption of digitalization, the increasing concerns over energy efficiency have witnessed more significant reforms in the market, completing the adoption of such facilities. For instance, the South African government has introduced the Renewable Energy Independent Power Producer Procurement Programme to facilitate these needs. From the inception of this program, over 6,000 MW of renewable energy projects, principally in wind and solar, were allocated to bidders. The government strategically invests in renewable energy projects, particularly solar and wind, to achieve this ambitious target.
• In February 2022, South Africa launched a 300 MW renewable energy program. Under this program, the government launched the tender process to procure up to 300 MW of renewable energy capacity. In August 2022, South Africa proposed to solve the country's energy crisis by converting three coal-fired reactors into gas-burning generators and establishing a new state-owned power utility.
• The key players (Equinix, Africa Data Centres, Vantage Data Centers, and NTT Ltd) in the market are planning to establish data centers in Johannesburg with a capacity of up to 270 MW, which is expected to increase the demand for Tier 4 facilities in the market. All the factors above further drive the demand for the segment.

South Africa Data Center Cooling Industry Overview

The South African data center cooling market is consolidated. The benefits offered by the technology and support from the government by imposing efficiency regulations on data centers are expected to help the market grow directly. Market penetration is growing with a strong presence of major players such as Schneider Electric SE, Rittal GMBH & Co.KG, Mitsubishi Electric Hydronics & IT Cooling Systems SpA, Johnson Controls International PLC, and Asetek A/S.

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