Sustainability will be a major driver of the data center physical infrastructure market in the next five years despite expected macroeconomic headwinds and ongoing supply chain disruption, according to Dell'Oro analyst Lucas Beran.

The market research firm predicts data center physical infrastructure revenues will climb by an 8% compound annual growth rate to reach $31 billion, driven primarily by the environmental consciences of cloud and colocation service providers.

For the enterprise segment, Beran expects environmental sustainability will maintain its position as a growth driver. And for cloud and data center colocation providers, many of which tout ambitious climate targets for 2025 or 2030, Beran doesn't expect macroeconomic headwinds will have much of an effect on sustainability agendas, even as overall budgets may tighten.

Other decision-making criteria data center customers consider in addition to sustainability are reliability and uptime; climate as it relates to thermal management, availability of electricity and how it's generated; latency requirements; and scalability.

Data center thermal management is at the center of the industry's biggest sustainability push, and Dell'Oro expects the market segment to reach $6 billion in market revenue by 2026, with liquid cooling accounting for 20% of the market.

Beran noted this level of liquid cooling adoption "will signal that liquid cooling is a tried and tested technology for the mission critical data center industry, giving confidence to others to adopt data center liquid cooling," he wrote in an email to SDxCentral. This legitimacy will pave the path for continued development of data center cooling beyond 2026, he added.

Apart from liquid cooling, Beran cited the rise in heat reuse tech, grid-interactive uninterrupted power supply (UPS), and sensors and management software as emerging data center sustainability solutions.

Heat generated by data center operations can be collected and reused to heat greenhouses, swimming pools, or connect to district heating networks, for example, instead of rejecting it into the atmosphere, Beran said, adding that these heat reuse has successfully been used on smaller scales.

Grip-interactive UPS also shows potential for environmental sustainability use cases — where the UPS serves its primary function of providing backup power to data centers in the case of power outages, but also "allows for proactive use of a data centers energy storage assets," Beran explained.

Microsoft recently announced its own grid-interactive UPS program to allow its data centers to provide uninterrupted service when demand exceeds the available renewable energy supply.

“In areas where municipalities or utilities are trying to get away from fossil-based solutions, if there is a dip in renewable reserves, what we can do as a company is take our large amount of load and we can reduce our load by putting our own batteries to use,” Microsoft principal program manager Mycah Gambrell-Ermak explained.

This grid service “is a way for us to unlock the value of the data center,” Nur Bernhardt, senior energy program manager at Microsoft, added.

"These types of activities can help decarbonize the grid by supporting easier integration of renewables and can prevent the utility from firing up carbon emitting emergency generation," Beran said.

Another rising trend he identified is the adoption of sensors and management software (DCIM) that improve the industry's ability to measure, monitor, and manage energy use, reduce wasted energy, and lower overall energy consumption. Beran noted that data center overall energy consumption may still grow, but not at the rate it otherwise might have.

Data center providers are seeing an increase in customer demand for sustainable practices, and this is accelerating the transition to sustainable data center tech.

Enterprises don't have the expertise or scale to impact the sustainability of the data center industry in the way service providers do, which means enterprises are increasingly choosing service providers based on their sustainability initiatives.

However, the lack of standardization in the realm of sustainability reporting can make it difficult for enterprises to understand the holistic sustainability impact of different service providers.

"The primary way this has materialized for service providers is adoption of renewable energy through PPA (power purchase agreements) or RECs (renewable energy certificates) have been used and are continuing to grow. Otherwise, commitments to reduce water usage and waste, increase energy efficiency, and achieve carbon neutrality are strong discussion points between data center service providers and their customers," Beran explained.