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. In a recent study by IHS, it was found that row/rack revenues fell by roughly 5% to 6% in 2013 compared to a perimeter cooling market decline of 2% to 3%.

“There are a few reasons for the decline of row/rack revenue,” Elizabeth Cruz, the author of Data Center Cooling - 2014 explains. “These products are used either as stand-alone 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 second use-case, as a supplementary cooling option for high-density areas of a data center, is not posing much opportunity for growth either. Row/rack products offer significant energy savings once rack densities approach the 8-10kW range. At that point, it becomes more efficient to install a row/rack product than to increase the flow of air from a CRAC or CRAH unit to cool down a hot spot 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.

In addition to these two specific struggles for row/rack products, there is the broader issue of a sluggish data center market. IHS tracks nearly all segments of the data center infrastructure market and has witnessed continued contraction of revenue over the last two years. Cruz explains “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 and 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 compute performance per watt, which then requires less power and cooling backup.”

In the medium term, IHS projects a return to growth in the data center market, as consolidation and technology improvements can no longer absorb the increased digitization and resulting compute, storage, and processing needs. Cruz concludes 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.”

IHS regularly analyzes all aspects of the data center infrastructure market. Data Center Cooling – World  – 2014 provides in-depth analysis across a number of segmentations. Revenues are estimated for 2013 and forecast through 2018. The market is segmented by country, product type, heat rejection method, application, vertical market, and distribution channel. Supplier market share estimates for 2013, and an analysis of the competitive environment, are also provided.