Data Center Power Market Size and Trends (2025-2029)

The data center power market is forecast to experience substantial growth, with an expected increase of USD 24.05 billion at a CAGR of 10.8% from 2024 to 2029. This expansion is driven by increasing investments in data centers and high-performance computing (HPC) systems, alongside rising demand for digital transformation and cloud services adoption. However, challenges like UPS battery failure and energy efficiency remain key concerns for the industry.

For more details about the industry, get the PDF sample report for free

Market Segmentation

By Product:

• Generators: Expected to witness significant growth, as data centers rely on them as backup power sources during outages. The choice of generator depends on power capacity and backup time requirements.
• UPS: Key to ensuring reliable power delivery and protection against outages.
• Transformers, Transfer Switches, and Switchgears: Integral components of the power management infrastructure.
• Others: Other essential components and technologies supporting power management in data centers.

By End-User:

• IT & Telecommunications
• BFSI (Banking, Financial Services, and Insurance)
• Energy
• Healthcare
• Retail

By Services:

• Design & Consulting
• Integration & Deployment
• Support & Maintenance

By Geography:

• North America
  • Canada
  • US
• Europe
  • Germany
  • UK
  • France
• APAC
  • China
  • India
  • Japan
  • South Korea
• South America
• Middle East and Africa

Key Market Drivers and Trends

• Increasing Investments in Data Centers: The ongoing surge in data generation from sectors like IT & telecommunications, healthcare, retail, banking, financial services, insurance, and government is driving the need for advanced power management solutions, such as Power Distribution Units (PDUs) and Uninterruptible Power Supply (UPS) systems.
• Cloud Computing and HPC Systems: The growing shift toward cloud services and the adoption of HPC systems are pushing the demand for reliable and scalable power solutions in data centers.
• Energy Efficiency and Smart Technologies: The demand for energy-efficient data centers is increasing, with market participants focusing on advanced technologies like lithium-ion batteries, renewable energy sources, and smart grids to optimize energy usage and mitigate consumption-related issues.
• Modular Data Centers: Flexible and scalable modular data centers are becoming increasingly popular, offering solutions to businesses adapting to new work-from-home models and evolving digital transformation requirements.

Key Market Challenges

• UPS Battery Failure: UPS battery failure remains a critical challenge in the market, especially given the importance of UPS systems in providing backup power to data centers. These systems, which include PDUs and UPS batteries, can experience battery malfunctions as their lifespan averages around ten years. These failures can result in significant downtime, leading to costly consequences for data center operators.
• Energy Efficiency Concerns: Data centers consume a substantial amount of the world’s electricity, around 2%, and managing energy efficiency is a top priority for operators. The demand for high-performance solutions, such as lithium-ion batteries and renewable energy sources, is growing, but energy conservation remains a significant challenge.
• High Operational Costs: While energy-efficient technologies and power solutions provide long-term savings, the initial investment in infrastructure can be substantial. Companies must balance these costs with ongoing maintenance and operational expenses to ensure the total cost of ownership (TCO) remains manageable.

Get more details by ordering the complete report

Key Players in the Data Center Power Market

• ABB Ltd
• Active Power Solutions Ltd.
• AEG Power Solutions BV
• Black Box Corp.
• Caterpillar Inc.
• Control Technology Co.
• Cummins Inc.
• Cyber Power Systems Inc.
• Danfoss AS
• Delta Electronics Inc.
• Eaton Corp.
• Exide Technologies
• Generac Holdings Inc.
• Legrand SA
• Panduit Corp.
• Rolls Royce Holdings Plc
• Schneider Electric SE
• Siemens AG
• Toshiba Corp.
• Vertiv Holdings Co.

Latest Market Developments

• Schneider Electric launched a new line of energy-efficient PDUs for data centers in December 2024, featuring real-time energy monitoring and load balancing capabilities.
• Eaton introduced a high-density UPS system for data centers in November 2024, designed to optimize space and energy usage while ensuring reliable power backup.
• Vertiv unveiled a new modular power system for data centers in October 2024, offering scalable power solutions that reduce operational costs and installation time.
• Generac Power Systems launched an upgraded backup generator solution in September 2024, incorporating advanced remote monitoring capabilities to ensure continuous power and system health tracking.

The data center power market is experiencing rapid growth, with increasing investments in infrastructure, innovations in power management technologies, and the adoption of energy-efficient solutions shaping the landscape through 2029.