Data Center UPS Market - Global Outlook & Forecast 2025-2030

MARKET OVERVIEW

The global data center UPS market size by investment was valued at USD 8.89 billion in 2024 and is expected to reach USD 20.75 billion by 2030, growing at a CAGR of 15.17% during the forecast period. Data center operators are involved in several innovative practices to improve the power and operations of data centers. This involves shifting from using traditional batteries such as VRLA to modern ones. The new-age battery types advancing in UPS systems are Li-ion, nickel-zinc, and Prussian blue sodium-ion batteries, which have AI in power monitoring and microgrids in data facilities. Furthermore, the rise in demand for data centers continues to drive the expansion of the data center UPS market, leading to increased investments from operators worldwide and creating opportunities for UPS vendors to offer and innovate their products. Implementing new technologies such as IoT, big data, and AI in all sectors like BFSI, education, and government, with growth in 5G networks, has led to an increase in data generation. This has enabled the construction of new data facilities, resulting in demand for UPS systems and batteries.

KEY HIGHLIGHTS

1. It is expected that the Li-ion data center battery market will set a trend by 2025. Li-ion batteries generally offer higher energy density than VRLA batteries, which were being used traditionally. The life span of lithium batteries is longer—up to 10 years in comparison with VRLA, which is around 4-5 years. Finally, lithium batteries occupy less space and are lighter than VRLA.
2. Vendors seek new approaches to keep up with the trends in the data center market. Mainly focusing on developing products that align with current market needs. One important change is the sustainability of data facilities, and because of this, vendors are committed to providing and altering products related to the current market needs and catering them to their clients.
3. The hyperscale operators, which have their market in Tier IV, include operators such as Apple, Meta, Microsoft, Amazon Web Services (AWS), and Google. They are expected to expand further during the forecast period due to the pouring of many investments by these hyperscalers. These operators emphasize UPS systems' efficiency and their advancements as per industry demand and support the data center UPS market growth. At present, these operators invest heavily in this market as we see several new and upcoming projects.

KEY TRENDS

Adoption of Advanced UPS Batteries

1. Advanced battery systems utilized in data centers are essential to guaranteeing uninterrupted power distribution during power loss. Even the best UPS systems are useless without a battery to buffer the power. When the battery gets discharged, disconnected, or dead, and the UPS loses incoming power, the entire system will shut down, underlining the importance of the right battery for each application.
2. The three main batteries trending currently in the data center UPS market are Li-ion, Flywheel, and VRLA. VRLA has been supporting data centers for many years. At present, other types of batteries are in the race due to their reliable nature and focus on sustainability.
3. Li-ion batteries are preferred over traditional VRLA batteries for many reasons, including the ones such as Li-ion batteries being lower in weight, more sustainable and planet-friendly, having a long-expected life, being safer, and having lower OPEX, among other relevant factors.
4. ABB, Schneider Electric, Huawei Technologies, Eaton, and Vertiv, among many others, are some of the prominent battery providers in the data center UPS market that operate and have a significant presence in this market.

Adoption of DC UPS Systems to Mitigate Loss of Power

1. Many data centers consume more than 2.0% of global power produced annually, which they can mitigate power wastage using energy-efficient power infrastructure.
2. Most colocation providers worldwide are involved in the designing of OCP-ready data centers. These data centers are likely to include the deployment of DC power systems. Many enterprises also consider shifting to the data center design of hyperscale operators to reduce OPEX and improve operational efficiency. In terms of power wastage, UPS vendors invest in R&D activities to reduce the power wastage of UPS systems.
3. Although most industrial applications are based on AC power, there is a growing paradigm shift, with an increasing number of data center operators considering implementing DC power for power distribution within data center facilities.
4. Some energy is lost when power is switched between AC and DC in data centers. Fewer conversions ensure less heat is being lost, resulting in lower OPEX. DC power also takes up less space in a data center and is easier to integrate with other energy devices that generate DC power.
5. Thus, most providers are involved in designing OCP-ready data centers, which include the deployment of DC power systems.

SEGMENTATION INSIGHTS

Data center developments across the planet ought to propel the demand for the global data center UPS market, as every facility needs a proper power-redundant infrastructure in place. Almost every year or so, new companies enter the market for building data centers. Hyperscale data center operators have a common habit of increasing their market presence with investments in cloud regions.

1. After the rise of cloud and edge computing, the construction of data centers has increased, but data centers are introducing Li-ion batteries in their facilities, and currently, the trend toward sustainable batteries has witnessed a rise in 2024 in the data center UPS market.
2. Data center operators have shifted the trend toward sustainable batteries such as Li-ion batteries, even though flywheel UPS and VRLA-based systems are readily available. The acceptability of these units is greater than that of standalone flywheel UPS units.
3. Li-ion batteries are the most widely used form of energy storage in mobile phones. Almost all suppliers provide Li-ion-based UPS systems for data centers, supporting the expansion of the market.
4. Earlier, the dominant technology in UPS systems was lead-acid batteries, which were used but had limitations such as shorter lifespan, longer recharge times, and larger physical size. They require excessive maintenance and have a lower energy density compared to newer technologies. But at present, Li-ion has gained momentum due to its higher energy density, longer lifespan, faster recharge times, and greater efficiency than lead batteries. This can also take up to 80% less space in the facilities.
5. Nickel-zinc and sodium-ion are two emerging battery technologies currently evolving in the data center UPS market. The adoption of these batteries is expected to attract data center investors during the forecast period, potentially disrupting the market share of Li-ion and VRLA technologies.
6. While the development of data centers primarily concentrates on prominent cities worldwide, the progress in Tier II and III cities is still in its early stages. The increased adoption of the latest technologies in smaller locations relatively distant from major urban centers gains momentum, particularly in deploying edge data centers. Tier I and II data center developments are declining quite rapidly worldwide. In contrast, the number of Tier III and IV data center facilities is on the rise, and it is quite common to find them almost anywhere on the planet.

GEOGRAPHICAL ANALYSIS

Americas: An Innovative Market Landscape Focusing on Cutting-Edge Technologies

Speaking about the Americas, North America leads the way, followed by Latin America. The North American data center market is considered among the developed and established data center markets and has set a high benchmark to follow for other regions such as Europe and APAC. Latin America is an emerging and developing data center market with a lot of potential to be discovered during the forecast period. This potential is likely to drive up the growth of the data center UPS market. This region has witnessed a lot of investments from both hyperscalers and colocation operators with the new construction of data centers and announcements along with power capacities, which opens the door for UPS providers to utilize such opportunities.

Europe: Most Emerging Area in the Data Center Market

Europe consists of many established markets, which include the UK, Germany, France, Ireland, and the Netherlands. This region experiences growth in markets such as Spain, Poland, Italy, Belgium, Denmark, and Sweden. This rapid investment and growing market contribute to more redundant UPS systems, thereby driving the data center UPS market growth.

MEA: An Evolving Market Scenario with Above-Par Potential

This region has promising potential, quite untapped in certain markets, for growth in terms of data center development as well as for the adoption of sophisticated UPS infrastructure. Markets here experience a lot of power outages and lower redundancy at times. Data center operators here are focused on installing highly redundant UPS systems and other power-related infrastructure to curtail downtime to the very least.

APAC: A Growing Marketplace for Opportunities

APAC is considered one of the fastest-growing markets for various reasons, including increased digitalization among internet users, a rise in internet penetration, and data generation. This growth drives a great demand for data storage and processing facilities. The region caters to the largest markets, such as China, India, Australia, Japan, Hong Kong, and Singapore. In addition, emerging markets like Indonesia, Malaysia, South Korea, the Philippines, New Zealand, and Thailand show great growth potential. Like the MEA region, APAC has experienced numerous UPS failures and power outages in recent years. Therefore, data center companies in this region need to look after reliable and efficient UPS infrastructure to mitigate these issues and minimize downtime, thereby supporting the data center UPS market growth and enabling them to compete effectively with their counterparts in the Americas and Europe.

VENDOR LANDSCAPE

1. Prominent UPS vendors in the data center UPS market include ABB, Eaton, Vertiv, Schneider Electric, Delta Electronics, Legrand, Piller Power Systems, and Mitsubishi Electric, among others. These vendors dominate the data center UPS industry by introducing several new innovative UPS products to their customers. Emerging vendors such as Canovate, Cyber Power Systems, Enersys, Rittal, and THYCON are also showing great enthusiasm for developing UPS products.
2. ZincFive is a leading company that has been dedicated to promoting and providing nickel-zinc batteries for over a decade. In June 2024, the company announced that it had surpassed the delivery of over 1 gigawatt (GW) of nickel-zinc batteries, driven by the increasing demand for data center infrastructure and the recent boom in AI.
3. Natron Energy, one of the prominent manufacturers of sodium-ion battery technology, announced its plan to invest around USD 1.4 billion toward the development of a new giga-scale factory in Edgecombe County, North Carolina, which will produce around 24 GW of sodium-ion batteries annually at full capacity.
4. Battery providers play a vital role in the data center UPS market, as batteries are an essential component of UPS systems. Every UPS system includes at least one string of batteries, depending on its DC voltage requirements. These batteries are important during power outages and aid when the main power source fails. Key players in the battery market include Enersys, Exide Technologies, Haze Battery, UNIPOWER, Power Sonic, and ZAF Energy Systems, among others.
5. The demand for reliable and innovative UPS infrastructure is increasing in data centers, pushing vendors to develop solutions for it. Minimizing downtime is critical for managing power outages and ensuring smooth operations within facilities. Therefore, UPS systems are the lifelines in shaping the power infrastructure of data centers.
6. Companies that focus on creating and advancing innovative UPS systems and battery technologies, particularly those that enhance performance while prioritizing sustainability, are positioned to capture a larger data center UPS market share throughout the forecast period. This trend suggests that investment in R&D to improve both efficiency and eco-friendliness could be key drivers for success in the evolving marketplace. In addition, incorporating renewable energy sources and smart technologies into these systems could further enhance their market presence.