The data center colocation market is surging thanks to greater digital consumption and reliance. Cloud and IT providers are leading the charge in terms of capacity uptake, but enterprise companies have come to view colocations as a vital component in their dynamic information technology infrastructure. Unsurprisingly, demand for these data centers keeps rising steadily. According to the Uptime Institute Global Data Center Survey 2022, about one in three businesses use colocations (either retail or wholesale) to augment their footprint and network connectivity. These facilities house large amounts of computer servers, storage devices and other equipment that must be kept at optimal temperatures for maximum efficiency. As enterprises diversify their data center strategies with cloud and edge computing, colocations need to deliver cost-effective, dense computing services to remain competitive. Consequently, colocation providers need to continuously optimize their compute floorspace, footprints, and cooling solutions to maintain a reliable, flexible operational environment.
Colocations that rely on just air-cooling will eventually experience reduced performance and even shutdowns as the inevitable demand for higher compute power accelerates. While many colocation facilities have opted not to address this issue, those who have begun to consider the advantages of direct-to-chip (D2C) liquid cooling are taking a step in the right direction. Unlike air cooling, liquid-cooled servers help colocations support denser computing while saving money on both energy costs and IT infrastructure investments. Let’s explore one of the latest innovative cooling options, direct-to-chip liquid cooling, and how it can benefit colocation facilities.
What is direct-to-chip liquid cooling?
Direct-to-chip liquid cooling circulates fluid or water (coolant) through a cold-plate or heat sink located directly on the chip. An innovative D2C solution is called microconvective cooling®, which targets the hot spots on the chips and creates a much more efficient heat transfer than traditional air cooling. Direct-to-chip cooling can be a closed loop or open loop system depending on the infrastructure and power requirements. Closed-loop D2C liquid cooling has become increasingly popular for colocation facilities as it eliminates the need to upgrade existing infrastructure, enabling tenants to deploy liquid cooling without expensive facility modifications. Furthermore, this method can cool the industry’s highest-power GPUs and CPUs with significantly greater effectiveness than air cooling. This enables lessees to deploy the latest and next-generation chips, leading to improved performance, enhanced reliability, and reduced energy usage in the colocation data center. Consequently, self-contained D2C systems are becoming an increasingly popular choice for modern data centers as they offer tremendous environmental, operational and cost-saving benefits. Let’s expand further into why colocations tenants are adopting this technology.
Reason #1: Drive Cost Savings
Self-contained D2C liquid cooling offers significant cost savings for both the colocation operators and lessees when compared to traditional liquid-cooled systems. How? Colocation facilities no longer have to overhaul existing floorspace while lessees densify compute, cooling up to 50kW air-cooled racks.
These cooling systems also reduce capital costs by eliminating the need for CDUs, chillers, cooling towers, piping, and other cooling infrastructure. These systems are not only more affordable at the outset than traditional liquid and air-cooling solutions, but they also decrease operational costs due to their energy efficiency. Furthermore, these systems can be easily scaled up or down to meet changing demands, helping the colocation facility save money while providing a better service to its customers.
Reason #2: Support High-Density Devices
The move to higher-density devices is already underway. Tech giants, Intel, NVIDIA, and AMD have been releasing high density CPUs and GPUs with max TDPs up to 700W. As average rack density continues to increase from 15 to 20kW by 2025, liquid cooling solutions will be necessary to manage high-density thermal outputs. Self-contained D2C liquid cooling solutions are an ideal way for colocation facilities to maintain their current infrastructure while allowing customers to upgrade to the newest and most advanced chipsets.
Reason #3: Rapid Go-To-Market Deployment
Another key benefit of colocations is the ability to scale or decrease operations quickly. At most enterprises, compute workloads and projects vary from month to month. As a result, enterprises offload workloads to colocations so they can maintain strict project deadlines and schedules. Subsequently, simple, quick, and efficient deployments are essential benefits when selecting a reliable colocation provider. With liquid-assisted air cooling, colocations extend liquid cooling performance to their customers without any plumbing required in their facility. This means colocation lessees can quickly deploy liquid cooling quickly and without complexity.
Reason #4: Maximize Data Center Real Estate and Utilization
Colocations can maximize their data center real estate with self-contained liquid cooling solutions. By packing more compute into less floorspace, colocations can increase utilization while accommodating an increasingly diverse customer base. By upgrading to D2C liquid cooling, colocations maximize their existing campuses across the globe, giving customers more growth opportunities within the facility.
In addition, finding new campuses that meet power, sustainability and location requirements can be a challenging endeavor. Rather than building new campuses, retrofitting existing facilities with modern liquid cooling solutions supports sustainable design and construction as colocations optimize operations, according to Uptime Institute. By retrofitting legacy infrastructure, colocations eliminate the need for land clearing, reduce building materials, and cut GHG emissions associated with a large build. Alternatively, colocations looking to undergo a new facility development can do so easily thanks to a D2C liquid cooling location-agnostic, easily deployable design. As a result, liquid cooling helps colocations optimize their current and future campuses to efficiently support more customers.
Reason #5: Liquid Cooling is the Future of Sustainable Computing
According to a 2022 Uptime Report, improving data center cooling is the biggest factor in improving overall colocation sustainability. This should come to no surprise as cooling accounts for a large percentage of energy usage in data center operations. However, colocations don’t have to choose between sustainability and performance. Direct-to-chip liquid cooling can accommodate dense high-performance server clusters while reducing overall power consumption and water usage.

Figure 1: UpTime Institute’s “Sustainability strategies
in colocation” Report
Simply put, going green helps a colocation become more marketable and competitive. Consequently, modernizing legacy cooling infrastructure with direct-to-chip liquid cooling solutions is one of the best opportunities to improve energy efficiency.
How to Get Started
Migration to liquid-cooled infrastructures can be a lengthy process and there is no single, universal solution.
By investing in a self-contained D2C liquid cooling solution, colocation clients can enjoy the numerous benefits of this innovative technology. These include improved efficiency, enhanced reliability, reduced energy usage and noise pollution, and an overall better computing experience. With all these potential advantages, it’s clear that D2C liquid cooling is a smart choice for modern colocation data centers. Furthermore, the fact that this technology is already being implemented in many large-scale data centers means that colocation facilities can benefit from economies of scale during the conversion process. Ultimately, D2C liquid cooling is a viable option for modern colocation facilities and one that should be seriously considered when optimizing their compute floorspace and footprints.