Data Center Construction Market Report
Data Center Construction Market by IT Infrastructure (Networking Equipment, Server, and Storage), Power Distribution & Cooling Infrastructure (Power Distribution, Cooling, Miscellaneous Expenses, and Miscellaneous Expenses), Tier Type (Tier 1, Tier 2, and Tier 3), End-Use Outlook (IT & Telecom, BFSI, Government & Defense, Healthcare, Energy, and Others), and Region (North America, Europe, Asia-Pacific, and LAMEA): Opportunity Analysis and Industry Forecast, 2023-2032
Data Center Construction Overview
The process of planning, designing, and constructing physical facilities to house data processing and storage equipment as well as other essential infrastructural components is known as data centre construction. These buildings were specifically designed to offer a safe, dependable, and expandable setting for data centre operations. Finding a suitable location is the first stage in building a data centre. During site selection, elements including closeness to power supplies, fibre optic networks, availability of water for cooling, and potential dangers from natural disasters are taken into account.
Global Data Center Construction Market Analysis
The global data center construction market size was $216.7 billion in 2022 and is predicted to grow with a CAGR of 4.4%, by generating a revenue of $331.3 billion by 2032.
COVID-19 Impact on Global Data Center Construction Market
The reliance on digital services, cloud computing, and online communication greatly expanded as a result of widespread lockdowns and limitations. Data centres were therefore becoming increasingly necessary to support the infrastructure needed to satisfy the expanding demand for digital services. With the rise of telecommuting and remote work, there is a greater need for data centres to accommodate the connectivity, data storage, and security requirements of remote workers accessing corporate resources from a distance.
The rise of hybrid work patterns, which combine in-office and remote work, may have an impact on data centre needs. To meet the diverse needs of on-premises and remote workloads, data centres may need to be more adaptable. It is anticipated that edge computing, which moves data processing and storage closer to the device or end-user, would continue to grow.
Increasing Demand for Digital Services to Drive the Market Growth
The demand for data centres is being driven by the growing reliance on digital services, cloud computing, and internet-based applications. In order to store, manage, and process the ever-increasing volumes of data, businesses and organizations need a strong data centre architecture. Data centres to host cloud infrastructure are in high demand as a result of the wide use of cloud computing services by businesses and consumers. To support their cloud services, businesses and cloud providers alike need data centres with scalability and dependability. A large data explosion has been caused by the growth of data-generating devices, IoT devices, social media, and online commerce. This data must be stored and managed, which necessitates the development of more data centres. All these factors are predicted to boost the growth of the global data center construction market during the forecast period.
High Capital Investment to Restrain Market Growth
The cost of acquiring land, creating infrastructure, purchasing equipment, and hiring trained labor are all substantial upfront capital expenditures associated with the creation of data centres. The construction process may take longer and cost more money as a result of navigating these complicated compliance standards. It can be difficult to locate and secure suitable sites for the development of data centres. The availability of suitable locations may be constrained by the specialized requirements for data centres, which include access to power and fibre optic networks, proximity to end users or crucial infrastructure, and geographic stability.
Growing Demand for Edge Data Centers to Drive Excellent Opportunities
Construction of data centres at the network's edge is made possible by the rising use of edge computing, which is fueled by the growth of IoT devices and 5G networks. By bringing data processing closer to end users, edge data centres lower latency and enhance the functionality of applications and services. To accommodate the increasing data traffic and low-latency demands of 5G applications, the implementation of 5G networks will require a dense network of data centres. All these factors are predicted to create growth opportunities for the data center construction market.
Global Data Center Construction Market Share, by IT Infrastructure, 2022
The server sub-segment accounted for the highest share in 2022. The demand for servers with more processing power and storage capacity is driven by the growing amount of data that individuals, businesses, and organizations are producing. Server technology must keep up with these processing and storage requirements as data centres manage enormous amounts of data. Due to the extensive use of cloud computing and virtualization technologies, data centres must install strong servers that can manage cloud-based workloads and run many virtual machines.
Global Data Center Construction Market Share, by Power Distribution & Cooling Infrastructure, 2022
The cooling sub-segment accounted for the highest market size in 2022. More effective and reliable cooling solutions are needed due to the rising heat density of current IT equipment, such as high-performance servers and GPUs utilised in AI and HPC applications. Cooling solutions must be installed in data centres to withstand the heat produced by tightly packed servers.
Global Data Center Construction Market Share, by Tier Type, 2022
The Tier 3 sub-segment accounted for the highest market share in 2022. High availability is the main goal of Tier 3 data centre construction. Tier 3 data centres are built to have a 99.982% or higher uptime guarantee. Critical IT activities and applications experience the least amount of downtime possible at this level of availability. Tier 3 data centres need redundant components for network connectivity, cooling, and electricity to prevent single points of failure.
Global Data Center Construction Market Share, by End-Use Outlook, 2022
The IT & telecom sub-segment accounted for the highest market share in 2022. Data centres must be able to handle the increasing data traffic and low-latency demands of 5G applications for 5G networks to be deployed. Data centers are essential to provide the necessary infrastructure for 5G networks. Data centres that can manage the enormous amounts of data created by these connected devices and enable real-time processing and analysis at the network’s edge are required due to the IoT devices and applications that are becoming more and more prevalent.
Global Data Center Construction Market Share, by Region, 2022
The North America data center construction market accounted for the highest market share in 2022. Businesses in the region from a range of industries are undergoing digital transformation to improve consumer experiences, streamline processes, and maintain competitiveness in the digital world. With numerous well-known cloud providers and data centre operators setting up shop in the region, North America has become a key hub for cloud computing services.
Competitive Scenario in the Global Data Center Construction Market
Partnerships and investment are the common strategies followed by the major players of the market. For instance, in April 2022, Kasi Cloud Ltd started the first of the multiple planned data centre campuses in Nigeria to design, develop, and manage hyperscale cloud data centres in order to provide dynamic space, power, and connectivity at scale. The business aims to buy about 4 hectares of property in Nigeria's Lekki region's Maiyegun neighborhood.
Some of the leading data center construction market players are Acer Inc., Cisco Systems, Inc., Huawei Technologies Co., Ltd., Dell Inc., Fujitsu, Oracle, Hewlett Packard Enterprise Development LP, IBM, Inspur, and Lenovo.
Historical Market Estimations
Base Year for Market Estimation
Forecast Timeline for Market Projection
North America, Europe, Asia-Pacific, and LAMEA
Segmentation by IT Infrastructure
Segmentation by Power Distribution & Cooling Infrastructure
Segmentation by Tier Type
Segmentation by End-Use Outlook
Key Companies Profiled
Q1. What is the size of the data center construction market?
A. The size of the data center construction market was over $216.7 billion in 2022 and is expected to reach $331.3 billion by 2032.
Q2. Which are the major companies in the data center construction market?
A. Lenovo and IBM are some of the key players in the global data center construction market.
Q3. Which region, among others, possesses greater investment opportunities in the near future?
A. The Asia-Pacific region possesses great investment opportunities for investors to witness the most promising growth in the future.
Q4. What are the strategies opted by the leading players in this market?
A. Partnerships and investment are the two key strategies opted by the operating companies in this market.
Q5. Which companies are investing more on R&D practices?
A. Lenovo and IBM are the companies investing more on R&D activities for developing new products and technologies.