The data center construction market involves the planning, designing, construction of new data storage, transfer, and recovery facilities for storing, managing, and processing large amounts of data. Data centers play a crucial role in cloud computing as they provide data storage and computing power over the internet on-demand. The growing demand for cloud services from large enterprises and consumers has increased the need for data centers to handle massive volumes of data driving investments in new data center projects.
The Global Data Center Construction Market is estimated to be valued at US$ 72,099.62 Mn in 2024 and is expected to exhibit a CAGR of 6.4% over the forecast period 2024 to 2030.
Key Takeaways
Key players operating in the data center construction market include AECOM, Arup, DPR Construction, Holder Construction Company, Jacobs Engineering Group, STRUXURED, and Turner Construction Co. Larger data centers require significant upfront capital investments and specialized expertise in designing energy efficient systems to handle massive computing workloads. Key players are focusing on providing end-to-end project management solutions including planning, design, deployment, and maintenance of hyperscale data centers to address the growing demand from cloud service providers.
The demand for data storage and cloud computing is expanding exponentially driven by the growth of Internet of Things (IoT), big data analytics, artificial intelligence, and 5G rollouts. This massive digital transformation across industries is generating huge volumes of data needing to be stored and processed in large scale facilities. Hyperscale cloud service providers are investing billions of dollars to construct mega data centers globally to cater to this growing demand.
Technological advancements such as modular data center designs, advanced cooling solutions, and use of renewable energy are improving efficiency and capabilities of data centers. Prefabricated modular data center designs can reduce construction timelines significantly. Liquid cooling systems enable higher power densities keeping electricity usage low. Data center operators are also investing in green energy initiatives to power their facilities through solar and wind farms to reduce carbon footprint.
Market Trends
- Colocation providers are investing heavily in developing hyper-scale data center campuses in key growth markets to handle surges in demand from hyperscalers for third-party data center infrastructure.
- Data centers are being designed for flexibility and scalability to smoothly adapt to frequent technology refreshes and workload fluctuations. Modular designs enable easy capacity addition without interrupting operations.
Market Opportunities
- Growth in edge computing and 5G rollouts are expected to drive investments in constructing distributed micro data centers located closer to end users for ultra-low latency applications.
- Adoption of renewable energy sources through on-site green power generation presents significant opportunities for data center operators to reduce electricity costs and meet sustainability goals.
Impact of COVID-19 on Data Center Construction Market
The COVID-19 pandemic has significantly impacted the Data Center Construction Market Growth globally. With lockdowns imposed worldwide, construction activities were halted during the initial months of 2020. This led to delays in project timelines and increased costs for many under-construction data centers. The pandemic also impacted supply chains as movement of materials was restricted. This resulted in shortages of critical components like servers, networking equipment etc required for setting up new data centers.
However, with more people working from home and greater digital transformation among organizations, the demand for data center infrastructure surged post lockdowns. Several data centers fast-tracked their expansion plans to support the exponential growth in demand for cloud services, online streaming, telehealth and other digital services. Hyperscale providers accelerated their investments to add millions of new servers and build exabyte-level storage infrastructure. Edge data centers also gained prominence to enable low-latency applications.
Going forward, data center operators will need to focus on health and safety of on-site workforce. Automation and remote monitoring technologies can help reduce dependency on manpower. Operators also need to build resilient supply chains and choose modular designs to ease capacity additions. Sustainable practices like free cooling, on-site renewable energy integration can help data centers prepare for future uncertainties.
Geographical Regions with High Data Center Construction Value
North America represents the region with the highest value for data center construction market globally. The US hosts over 25% of the world's public cloud data centers and over 2,000 unique third-party data centers. California, Texas, Virginia are some major US markets attracting mega data center builds.
The Asia Pacific region has emerged as the fastest growing market for data center construction driven by the growth of digital economies in countries like China, India, Japan, Australia and New Zealand. Hyperscalers are making large investments in the region to set up cloud infrastructure closer to their client base. Countries providing tax incentives and low-cost renewable power are attracting global data center operators.
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