Market Trends of North America Data Center Power Industry
IT and Telecom to Hold Significant Share
- The need for high-performance computing in technologies like cloud computing has led to the development of scalable, efficient, and flexible business operations, prompting many mid-sized companies to establish effective data centers like web hosting clouds and colocation centers. As a result, the increasing use of data centers has sparked a growing interest in cloud and mega data centers, which require massive amounts of power for data-intensive operations, thus creating a high demand for PDUs and UPSs.
- An additional 30 million smartphone connections are expected by 2025, which will drive the ongoing shift away from outdated networks (2G and 3G) and fuel smartphone growth in the coming years. The projected more-than-threefold increase in mobile data traffic in North America by 2027 will be largely driven by the growing number of smartphone users.
- The post-pandemic economic rebound, combined with robust sales of 5G smartphones and targeted marketing efforts, have collectively contributed to a surge in momentum. There is a growing consumer appetite to upgrade to 5G, with existing 5G customers demonstrating a heightened interest in augmenting their plans to encompass additional features such as video and music streaming, online gaming, live sports, and cloud storage.
- As the 5G network continues to expand and improve, it is expected to facilitate the growth of emerging edge applications that require fast and high-capacity data transfer. To accommodate this shift, large-scale service providers are looking to upgrade their automation with next-generation power distribution units (PDUs) that prioritize modularity and safety in design, given the increasing capacity and limited space.
- The growth of the data center power market is directly related to the launch of data centers and various market players investing in the data center expansion in the country. The data center power market is anticipated to flourish. For instance, in 2023, NetActuate, a prominent worldwide provider of network and infrastructure solutions, publicized the launch of a new data center location in Montreal. In addition to NetActuate’s existing location in Toronto, this location gives its clientele new opportunities for in-country redundancy and disaster recovery.
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United States to Hold Significant Growth
- The US internet penetration rate stood at 97.1% of the total population at the start of 2024, and such a factor focuses on the significant digitization trend. Recent economic incentives and tax benefits have been significant drivers of data center construction in the country. Approximately 27 states leverage these factors to attract data center projects. Sweeping Data Center Tax Exemptions were passed in Illinois as part of its USD 45 billion capital construction budget. The law exempts qualifying data centers from state and local sales tax on the equipment front for the next ten years.
- In 2023, around 1 in 4 dollars was invested in startups across the region; AI is generating more buzz compared to the previous years and has seen a plethora of enormous financings recently looking for companies in the space, including those to OpenAI and Anthropic.
- The increasing power consumption and IT load capacities from the data center resulted in increasing the adoption of new power infrastructure solutions across the region. For instance, Dominion, a US utility, expects to connect 15 data centers to the grid in Virginia throughout 2024 after connecting 15 facilities in 2023, totaling almost a gigawatt of capacity. The utility stated that individual facility demand is growing from around 30MW to 60-90MW, and campus requests now range from 300MW to several GW.
- In order to serve the growing requirement for data center power solutions, key players in the country are focusing on expanding production capacities and developing new products based on evolving market trends. For instance, Schneider Electric introduced the industry's first 4-in-1 combination outlets, APC NetShelter Rack PDU Advanced, which provides up to 50% more power with double the outlets per Rack PDU to support high-density applications and rising server rack densities.
- Schneider Electric plans to expand its manufacturing facilities with an investment of around USD 140 million in 2024. The new plant in Mt. Juliet is expected to begin operations, including product shipping, by 2024 and be fully operational by 2025. Thus, rising investment in data centers and upcoming innovation would boost the demand for the country's data center power market.
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