At AHR this year, I spoke to multiple cooling tower manufacturers who described themselves almost identically:
"We're really in the steel business."
Historically, that made perfect sense. Cooling towers were engineered products sold on mechanical reliability, thermal performance, and installed cost. The value sat in the physical asset itself.
But the market surrounding cooling infrastructure is changing rapidly. And many OEMs are still operating as though the next decade will look like the last one.
It will not.
The rise of AI infrastructure, hyperscale computing, advanced manufacturing, and energy-intensive facilities is quietly changing what customers expect from cooling systems — and what they are ultimately willing to pay for.
Cooling towers are no longer viewed purely as fabricated mechanical equipment. Increasingly, they are becoming operational infrastructure. That distinction matters enormously — because it creates long-term value far beyond the initial hardware sale.
The global expansion of AI and data center infrastructure is accelerating demand for cooling capacity at an unprecedented scale. Analysts project data center power consumption will more than double by 2030, with cooling representing the single largest non-compute operating cost in hyperscale facilities.
In these environments, cooling systems are directly tied to uptime, operational continuity, energy efficiency, and financial risk. A cooling failure inside a hyperscale facility is not treated like a routine maintenance issue — it becomes an operational and commercial event.
As a result, procurement decisions that once centered on thermal capability, equipment lifespan, and installed cost increasingly also require confidence around predictability, proactive maintenance, remote visibility, and risk reduction.
That changes the nature of the relationship between OEM and customer. The opportunity is no longer just to sell equipment. It is to help guarantee operational outcomes.
Most first-generation IoT initiatives across HVAC focused on visibility: a dashboard, some alarms, basic telemetry. But dashboards are not the strategic end state.
The real value emerges when continuous data allows manufacturers to reduce uncertainty around equipment performance itself. Once a cooling tower is continuously monitored, entirely new capabilities become possible: proactive fault detection, predictive maintenance, remote diagnostics, fleet benchmarking, and continuous optimization.
At that point, the discussion shifts from connectivity features to operational confidence — and confidence is commercially valuable in a way that equipment alone is not.
This is where the financial model becomes strategically interesting. Traditionally, OEMs carried substantial exposure when offering aggressive warranties or performance guarantees, because real-world visibility into equipment operation was limited. Connected infrastructure changes that equation entirely.
With sufficient fleet data and predictive analytics across an installed fleet, manufacturers can understand how equipment is performing, when failure conditions are emerging, and where operational risk exists — continuously, not reactively. That visibility creates the foundation for entirely new commercial structures: performance-linked service agreements, uptime guarantees, proactive maintenance programs, and energy optimization partnerships.
It also enables something more significant. At Blynk, we're working with cooling tower OEMs at every stage of this transition — from initial fleet connectivity through to the deployment of insured performance models. We're currently building this infrastructure in partnership with one of the world's largest reinsurance groups, whose underwriting capability can sit directly behind OEM performance guarantees once sufficient operational data exists.
That means manufacturers no longer need to absorb all risk internally. Risk can be quantified, managed, and in some cases offset through insured outcome structures supported by live fleet data. At that point, connectivity stops being a support feature. It becomes part of the financial architecture surrounding the equipment itself.
Hearing manufacturers describe themselves as being "in the steel business" was understandable. But long term, competing primarily on fabricated equipment creates structural pressure — because fabricated equipment eventually faces commoditization, especially as global manufacturing competition intensifies.
This week's news around the UK's continued difficulties with its steel industry are a sharp illustration of where commodity manufacturing pressure ultimately leads. Steel is not a warning from history. It is a current event.
Established cooling tower OEMs still possess enormous advantages: trusted brands, engineering credibility, deep installed base, service organizations, and long-standing customer relationships. But those advantages become significantly more defensible when combined with asset intelligence, predictive capability, and financially backed performance guarantees.
Without that layer, the market risks converging toward price-driven competition. And historically, that is rarely where long-term enterprise value is created.
This transition will happen gradually — and then much faster than most expect. Because once continuous fleet visibility exists, entirely different commercial structures become possible: subscription operational services, guaranteed uptime agreements, performance-based contracts, and long-term partnerships where the ongoing relationship is worth more than the initial equipment transaction.
That changes how businesses are valued, how customers are retained, and which companies ultimately lead the market.
The question executives should be asking now is not whether connected operational models are coming to this industry. It is whether their organization will be positioned to lead that shift — or will spend the following decade responding to OEMs who were.
The companies building that layer now are not waiting for the market to force the change.
If you're ready to explore what this looks like for your fleet — let's talk.
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