| REPORT ATTRIBUTE |
DETAILS |
| Historical Period |
2019-2022 |
| Base Year |
2023 |
| Forecast Period |
2024-2032 |
| Australia and New Zealand Data Center Cooling Market Size 2023 |
USD 134.81 Million |
| Australia and New Zealand Data Center Cooling Market, CAGR |
13.32% |
| Australia and New Zealand Data Center Cooling Market Size 2032 |
USD 502.33 Million |
Market Overview
The Australia and New Zealand Data Center Cooling Market is projected to grow from USD 134.81 million in 2023 to an estimated USD 502.33 million by 2032, registering a compound annual growth rate (CAGR) of 13.32% from 2024 to 2032. The market growth is driven by the rapid expansion of data centers, fueled by increasing cloud adoption, big data analytics, and the surge in digital transformation initiatives.
Key drivers of this market include the escalating demand for energy-efficient cooling technologies to reduce operational costs and carbon footprints. Additionally, trends such as the adoption of liquid cooling systems and innovative cooling methods like immersion cooling are gaining traction as data centers aim to optimize performance and sustainability.
Geographically, Australia dominates the market due to its well-established data center infrastructure and growing investments in hyperscale facilities. New Zealand, while smaller, is witnessing increased activity driven by expanding digital services. Key players in the market include Schneider Electric, Vertiv Group Corp, STULZ GmbH, and ABB Ltd., all actively contributing to the development of advanced cooling solutions.
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Market Drivers
Rising Demand for Data Centers and Digital Infrastructure
The rapid growth of digital infrastructure and data centers is a key driver of the data center cooling market in Australia and New Zealand. For instance, according to the Australian Government’s Digital Economy Strategy, the country aims to be a leading digital economy by 2030, which is fueling investments in data center infrastructure. In New Zealand, the government’s Cloud First policy is accelerating the adoption of cloud services across public sector agencies, driving demand for data center capacity. Major cloud providers like AWS, Microsoft, and Google have been expanding their presence in the region, establishing new data centers to meet growing customer needs. Colocation providers are also rapidly expanding, with companies like NEXTDC and DCI Data Centres announcing new facilities. This surge in data center development is creating significant demand for advanced cooling solutions to manage the increasing heat loads generated by high-density computing environments. As data volumes continue to grow exponentially, driven by emerging technologies like 5G, IoT, and AI, the need for efficient and scalable cooling infrastructure is becoming ever more critical for data center operators in the region.
Emphasis on Energy Efficiency and Sustainable Solutions
Energy efficiency and sustainability have become top priorities for data center operators in Australia and New Zealand, driving innovation in cooling technologies. For instance, the Australian Government’s National Energy Productivity Plan aims to improve energy productivity by 40% by 2030, encouraging data centers to adopt more efficient cooling solutions. In New Zealand, the government has set a target of 100% renewable electricity generation by 2030, pushing data center operators to seek greener cooling options. Industry initiatives like the National Australian Built Environment Rating System (NABERS) for data centers are also promoting energy efficiency. Data center operators are increasingly adopting free cooling techniques, leveraging the cooler climate in certain regions to reduce reliance on mechanical cooling. Liquid cooling solutions are gaining traction, particularly for high-performance computing applications. For example, some facilities are implementing direct-to-chip liquid cooling to manage heat from AI and machine learning workloads more efficiently. The push for sustainability is also driving interest in waste heat recovery systems, where the heat generated by data centers is repurposed for other uses, such as district heating or greenhouse agriculture, further improving overall energy efficiency.
Technological Advancements in Cooling Solutions
Technological innovations are reshaping the data center cooling landscape in Australia and New Zealand. For instance, the adoption of artificial intelligence and machine learning for optimizing cooling systems is on the rise. These technologies enable predictive maintenance and real-time adjustments to cooling parameters, improving efficiency and reducing downtime. Modular and scalable cooling solutions are gaining popularity, allowing data center operators to flexibly expand their cooling capacity as needed. Some facilities are experimenting with immersion cooling, where servers are submerged in dielectric fluid, offering superior heat transfer capabilities. Advanced airflow management techniques, such as computational fluid dynamics modeling, are being used to optimize cooling distribution within data centers. Edge computing is driving the development of compact, self-contained cooling solutions for smaller, distributed data centers. Additionally, there’s growing interest in renewable cooling technologies, such as using seawater or geothermal resources for data center cooling in coastal or geothermally active areas. These technological advancements are enabling data center operators to achieve higher cooling efficiency, reduce energy consumption, and improve overall performance in increasingly demanding computing environments.
Growth of Colocation and Hyperscale Data Centers
The growth of colocation and hyperscale data centers in Australia and New Zealand is another key factor driving the demand for advanced cooling solutions. Colocation data centers, which offer shared infrastructure to multiple customers, have become increasingly popular as businesses seek to reduce capital expenditures and improve operational efficiency. Hyperscale data centers, on the other hand, are large-scale facilities built to accommodate the massive computing and storage needs of cloud service providers and tech giants. Both colocation and hyperscale data centers require efficient and scalable cooling solutions to ensure optimal performance and uptime.In recent years, Australia and New Zealand have witnessed significant investments in the development of hyperscale data centers, driven by global tech companies such as Amazon Web Services (AWS), Google Cloud, and Microsoft Azure. These facilities, which house thousands of servers, require sophisticated cooling systems capable of handling high-density computing environments. As the demand for hyperscale data centers grows, so too does the need for innovative cooling technologies that can manage heat loads effectively while minimizing energy consumption. Colocation providers are also focusing on enhancing the energy efficiency of their cooling infrastructure to remain competitive in a market where clients are increasingly prioritizing sustainability and cost savings. This has led to the adoption of advanced cooling solutions such as in-row cooling, chilled water systems, and adiabatic cooling, which offer improved energy efficiency and reduced operational costs. The continued growth of colocation and hyperscale data centers is expected to fuel the demand for efficient, scalable, and environmentally-friendly cooling solutions in the coming years.
Market Trends
Increased Adoption of Liquid Cooling Systems
The Australia and New Zealand data center cooling market is witnessing a significant shift towards liquid cooling systems. This trend is driven by the increasing power density demands of modern data centers, particularly those handling high-performance computing and AI workloads. Liquid cooling solutions, including direct-to-chip and immersion cooling, are gaining traction due to their superior heat dissipation capabilities compared to traditional air-based systems. For instance, Macquarie Data Centres has introduced liquid cooling in their facilities, optimizing both air and liquid cooling systems in their Macquarie Park Data Centre Campus. Similarly, Equinix Australia has noted a substantial increase in cooling densities driven by AI requirements, leading to a greater adoption of liquid cooling technologies. This trend is expected to continue as data centers strive to manage higher heat loads more efficiently while reducing their overall energy consumption.
Focus on Energy Efficiency and Sustainability
Energy efficiency and sustainability have become paramount concerns in the Australia and New Zealand data center cooling market. Data center operators are increasingly adopting cooling technologies that minimize energy consumption and environmental impact. According to a report by the Equipment Energy Efficiency (E3) Program, data centers in Australia consumed 7.3TWh of electricity in 2013, accounting for 3.9% of national consumption. To address this, operators are implementing innovative cooling solutions such as free cooling, adiabatic cooling, and airside economization. For example, Macquarie Data Centres is using automation and real-time monitoring to improve sustainability, employing variable speed fans in their computer room air conditioning units that automatically adjust to current temperature. The push towards green data centers is further supported by government initiatives and corporate sustainability goals, driving the adoption of more energy-efficient cooling technologies across the region.
Market Restraints and Challenges
High Initial Investment and Operational Costs
A significant restraint in the Australia and New Zealand data center cooling market is the high initial capital expenditure required for advanced cooling solutions. Implementing state-of-the-art technologies like liquid cooling systems or immersion cooling demands substantial investment in specialized equipment and infrastructure modifications. Small and medium-sized data center operators may find it financially challenging to adopt these technologies due to budget constraints. Additionally, operational costs such as energy consumption, regular maintenance, and the need for skilled personnel to manage complex systems add to the financial burden. For instance, a survey that cooling costs account for a substantial portion of operational expenses for data centers in the region. These factors can slow down the adoption rate of advanced cooling solutions, limiting market growth and innovation, especially among smaller industry players who cannot leverage economies of scale.
Energy Infrastructure Limitations and Rising Energy Costs
Another challenge facing the data center cooling market in Australia and New Zealand is the limitation of existing energy infrastructure and the rising cost of electricity. Data centers are energy-intensive facilities, and their cooling systems contribute significantly to overall energy consumption. In some regions, the electrical grid may not support the additional load required by expanding data center operations, leading to potential reliability issues. Upgrading energy infrastructure can be both time-consuming and costly, posing a hurdle for data center development. For instance, a government report on energy infrastructure in Australia highlighted the need for significant investments to support the growing power demands of data centers. Moreover, the increasing cost of electricity adds to operational expenses, making it more expensive to run energy-hungry cooling systems. This situation compels data center operators to seek more energy-efficient cooling solutions, but the initial investment required for such technologies can be prohibitive. Balancing the need for efficient cooling with energy consumption and costs remains a critical challenge that could impede market growth.
Market Segmentation Analysis
By Component
The Australia and New Zealand data center cooling market is segmented into solutions and services. Solutions dominate the market share, driven by the growing need for advanced cooling technologies to manage increasing heat densities in modern data centers. These solutions include air conditioners, precision air conditioners, chillers, and air handling units designed to maintain optimal temperatures for critical infrastructure. For instance, a majority of data center operators in the region are investing in next-generation cooling solutions to improve energy efficiency and reduce operational costs. Services, including installation, deployment, support, and maintenance, are also gaining importance as the complexity of cooling systems increases. A government report highlighted that many organizations are outsourcing cooling system management to specialized service providers to ensure optimal performance and reliability.
By Application
The market is categorized into Telecom & IT, Retail & BFSI, Healthcare, Energy, and Others. The Telecom & IT sector leads the market, fueled by the rapid expansion of cloud computing, big data analytics, and IoT applications. For example, a major telecommunications company in Australia reported a significant increase in data center cooling investments to support their expanding 5G network infrastructure. The Retail & BFSI segment is experiencing substantial growth due to the increasing reliance on digital transactions and data management solutions. A survey of financial institutions in New Zealand indicated a rising trend in adopting liquid cooling technologies to manage high-density computing environments. The Healthcare sector is also driving market growth, with hospitals and research institutions investing in robust cooling systems to support their digital transformation initiatives. For instance, a leading healthcare provider in Australia recently upgraded its data center cooling infrastructure to accommodate the growing demands of telemedicine and electronic health records.
Segments
Based on Component
Based on Application
- Telecom & IT
- Retail & BFSI
- Healthcare
- Energy
- Others
Based on Solution
- Air Conditioners
- Precision Air Conditioners
- Chillers
- Air Handling Units
- Others
Based on Containment
- Raised Floor with Containment
- Hot Aisle Containment (HAC)
- Cold Aisle Containment (CAC)
- Raised Floor without Containment
Based on Services
- Installation & Deployment
- Support & Consulting
- Maintenance Services
Based on Cooling Type
- Raised Floor
- Non-Raised Floors
Based on Structure
- Rack-based Cooling
- Row-based Cooling
- Room-based Cooling
Based on Region
- Australia
- Sydney
- Melbourne
- New Zealand
Regional Analysis
Australia (80-85%):
Australia is estimated to hold approximately 80-85% of the data center cooling market share in the region. Major global cloud service providers have established a strong presence in Australian cities like Sydney, Melbourne, and Perth. For instance, over 70% of enterprises in the country are planning to increase their data center cooling investments in the next two years. The Australian government’s digital transformation initiatives have further accelerated the adoption of advanced cooling solutions, with a particular focus on energy efficiency and sustainability.
New Zealand (15-20%):
New Zealand accounts for about 15-20% of the regional market share, is experiencing steady growth in data center investments. Cities like Auckland and Wellington are emerging as key locations for data center expansion. For instance, according to a report from the New Zealand Ministry of Business, Innovation and Employment, the country’s data center capacity is expected to double by 2025, driving demand for efficient cooling solutions. New Zealand’s commitment to sustainability is reflected in its data center industry, over 80% of data center operators in the country prioritize energy-efficient cooling technologies. This focus on green technologies aligns with strict environmental regulations and supports the implementation of advanced cooling systems.
Key players
- STULZ GmbH
- Mitsubishi Australia Pty
- Schneider Electric SE
- Asetek AS
- Johnson Controls
- Alfa Laval Corporate AB
- Rittal GmbH & Co. KG
- Daikin Australia Pty Limited
- Munters Group AB
- Trane Technologies International Limited
- Fujitsu General Limited
- Danfoss A/S
- Emerson Electric Co.
- Delta Electronics Inc
Competitive Analysis
The data center cooling market in Australia and New Zealand is highly competitive, featuring a mix of global giants and regional specialists. Schneider Electric SE leads with its extensive portfolio of energy-efficient cooling solutions and a strong regional presence, catering to the growing demand for sustainable technologies. Emerson Electric Co. and Johnson Controls are significant competitors, offering advanced cooling systems and comprehensive service networks that enhance reliability and operational efficiency. Companies like STULZ GmbH and Rittal GmbH & Co. KG specialize in precision cooling solutions, addressing the need for high-performance cooling in increasingly dense data center environments. Mitsubishi Australia Pty and Daikin Australia Pty Limited leverage their expertise in HVAC systems to provide innovative, customized cooling solutions suited to local climate conditions. Emerging players such as Asetek AS focus on liquid cooling technologies, aligning with industry trends toward higher efficiency and reduced energy consumption.The competitive landscape is marked by continuous innovation, strategic partnerships, and a strong emphasis on sustainability. Firms are investing in research and development to introduce cutting-edge cooling technologies that meet the evolving needs of data center operators, positioning themselves favorably in a market that values energy efficiency and reliability.
Recent Developments
- In March 2023, STULZ announced a significant milestone for its CyberAir 3PRO DX series. Certain units within this series are now equipped to utilize the low-global warming potential refrigerant R513A, demonstrating the company’s commitment to environmentally sustainable air conditioning systems for data centers.
- In September 2024, Munters formed a strategic alliance with ZutaCore to integrate Munters SyCool systems with ZutaCore’s advanced 2-phase liquid cooling technology. This collaboration aims to tackle the challenges of managing AI-generated heat more efficiently and sustainably in data centers.
- In May 2023, Trane Technologies acquired MTA, an Italian-based manufacturer and distributor of sustainable solutions in industrial process cooling, air conditioning, and air treatment. This acquisition strengthens Trane’s capabilities in providing efficient sustainable solutions to various industries, including data centers.
- In 2024, Daikin enhanced its product and services offer for data center cooling in response to soaring demand from the sector. The company expanded its offering of chillers and air side solutions, including free cooling systems and air-cooled chillers specifically designed for data centers.
- In March 2024, Schneider Electric launched a new cooling facility in Bangalore, India, with an investment of INR 100 crores. While not specifically in Australia or New Zealand, this development is significant for the Asia-Pacific region and may impact the company’s offerings in nearby markets.
Market Concentration and Characteristics
The Australia and New Zealand data center cooling market exhibits a moderate level of market concentration, characterized by the presence of both global leaders and regional specialists. Key players such as Schneider Electric SE, Emerson Electric Co., Johnson Controls, and STULZ GmbH dominate significant market shares, contributing to a competitive landscape where innovation is paramount. The market is defined by a strong emphasis on energy efficiency and sustainability, driven by the growing demand for advanced cooling solutions to support expanding data center infrastructures. Companies are actively investing in research and development to introduce cutting-edge technologies like liquid cooling and precision air conditioning. This focus on innovation, coupled with tailored solutions to meet regional needs, fosters a dynamic environment where providers strive to offer efficient, reliable, and environmentally friendly cooling systems to data center operators across Australia and New Zealand.
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Report Coverage
The research report offers an in-depth analysis based on Component, Application, Solution, Containment, Services, Cooling Type, Structure and Region. It details leading market players, providing an overview of their business, product offerings, investments, revenue streams, and key applications. Additionally, the report includes insights into the competitive environment, SWOT analysis, current market trends, as well as the primary drivers and constraints. Furthermore, it discusses various factors that have driven market expansion in recent years. The report also explores market dynamics, regulatory scenarios, and technological advancements that are shaping the industry. It assesses the impact of external factors and global economic changes on market growth. Lastly, it provides strategic recommendations for new entrants and established companies to navigate the complexities of the market.
Future Outlook
- The data center cooling market in Australia and New Zealand is projected to sustain robust growth, fueled by escalating demand for data storage and processing across industries such as finance, healthcare, and telecommunications. This expansion necessitates advanced cooling solutions to manage increasing heat loads effectively.
- There will be a significant shift toward adopting innovative cooling technologies like liquid cooling and immersion cooling. These methods offer superior efficiency in heat dissipation, making them ideal for high-density computing environments and helping data centers reduce energy consumption.
- Energy efficiency will remain a critical focus area. Data center operators are expected to invest in energy-efficient cooling systems to lower operational costs and meet sustainability goals, aligning with global efforts to reduce carbon footprints and adhere to stricter environmental regulations.
- Environmental concerns will drive the adoption of eco-friendly cooling technologies. The use of renewable energy sources and natural cooling methods, such as free cooling and adiabatic cooling, will become more prevalent to minimize environmental impact.
- Supportive government policies and incentives for sustainable practices are anticipated to encourage the adoption of advanced, energy-efficient cooling solutions. Regulatory frameworks may increasingly mandate energy consumption standards, pushing the industry toward greener technologies.
- The rise of edge computing will lead to the development of smaller, decentralized data centers closer to end-users. This trend will create demand for compact and efficient cooling solutions tailored to these micro data centers, emphasizing scalability and flexibility.
- Significant investments from both domestic and international players are expected to boost data center infrastructure. The construction of new hyperscale and colocation facilities will drive demand for sophisticated cooling systems capable of handling large-scale operations.
- Integration of Internet of Things (IoT) devices and artificial intelligence (AI) in cooling systems will enhance automation and monitoring capabilities. Predictive analytics will enable proactive maintenance, optimizing cooling efficiency and reducing downtime.
- Energy infrastructure limitations and rising electricity costs may present challenges. Data center operators will likely explore alternative energy sources and more efficient cooling technologies to mitigate these issues and ensure reliable operations.
- The market is expected to become increasingly competitive, with key players focusing on innovation and strategic partnerships. Mergers and acquisitions may occur as companies aim to expand their product portfolios and strengthen their positions to meet the evolving needs of data center operators.
