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The US data center construction market size is projected to increase by USD 11.99 billion at a CAGR of 9.6% between 2023 and 2028. The market's growth rate hinges on several factors, such as the rising number of data centers, increasing merger and acquisition activity among market players, and the ongoing digital transformation of businesses driving demand for data centers. These elements collectively contribute to the market's expansion, reflecting a robust trajectory. The growth is propelled by the necessity for advanced data infrastructure to support evolving digital needs. As businesses seek to optimize their operations and enhance their digital capabilities, the demand for data centers continues to escalate, fostering a favorable environment for market growth.
The market growth and forecasting report includes key player's detailed analyses of the competitive landscape of the market and information about 20 market companies, including AMETEK Inc., Delta Electronics Inc., DPR Construction, Eaton Corp. Plc, Emerson Electric Co., FORTIS CONSTRUCTION Inc., Gilbane Inc., HDR Inc., Hensel Phelps, HITT CONTRACTING INC., International Business Machines Corp., Iron Mountain Inc., J.E. Dunn Construction Co., Nippon Telegraph And Telephone Corp., SAS Institute Inc., Schneider Electric SE, Siemens AG, and Turner Construction Co. Additionally, ABB Ltd. offers solutions such as intelligent grid and connections, power distribution, power protection, smart automation, cooling, server room solutions and others.
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The market is a hub of innovation and infrastructure, with the companies in the United States leading the charge in creating robust electrical infrastructure, including UPS Systems and other vital components. Mechanical infrastructure such as cooling systems ensures optimal performance, while IT and telecommunications support sectors like government and defense and healthcare. Cloud computing, Internet of Things (IoT), and artificial intelligence (AI) drive data generation and demand for advanced data centers. With a focus on data privacy and security amidst cyber threats and data breaches, cloud-based solutions like Electronic Health Records (EHR) and IoT in healthcare require resilient data center infrastructure.
Increasing number of data centers is the key factor driving market growth. The emergence of edge computing, which involves processing closer to the source or end-users to reduce latency and bandwidth usage, requires the deployment of smaller data center outsourcing or micro centers at the edge of the network, leading to increased construction in diverse locations. For instance, in November 2023, Microsoft Inc., the technology giant, announced its plan to build a sixth center in West Des Moines. Further, businesses are increasingly migrating their operations to cloud-based platforms for scalability, flexibility, and cost-efficiency. This trend fuels the need for such center construction to support the infrastructure required for cloud services.
Furthermore, the growing adoption of artificial intelligence (AI) and machine learning (ML) applications requires significant computational power and storage capacity, driving the need for expansion and construction, which is expected to have a positive impact on the market during the forecast period. Additionally, the market is influenced by various factors such as infrastructure, electrical infrastructure, UPS systems, other electrical infrastructure, mechanical infrastructure, cooling systems, racks, IT and telecommunications, and government and defense initiatives.
Increased focus on constructing eco-friendly data centers in US is the primary trend shaping market growth. There is a growing awareness of the environmental impact of data centers among businesses, particularly in terms of energy consumption and carbon emissions. Businesses and consumers are increasingly prioritizing sustainability and seeking eco-friendly alternatives. Eco-friendly centers align with corporate sustainability strategies and help organizations meet their environmental objectives. Energy-efficient centers result in significant cost savings over time by reducing energy bills and operating expenses.
Consequently, the demand for eco-friendly centers in the US is driven by a combination of environmental awareness, regulatory pressures, cost considerations, market demand, and technological innovation. As sustainability continues to be a priority for businesses and society as a whole, the construction of eco-friendly data centers is expected to accelerate, which in turn it will increase the market trends during the forecast period.
Cybersecurity issues is a challenge that affects market growth. Cyber-attacks pose significant threats to the security, integrity, and availability of critical infrastructure and sensitive data. Data centers are prime targets for cybercriminals due to the vast amount of valuable information stored within them and their role in supporting numerous online services and businesses. Distributed denial-of-service (DDoS) attacks involve flooding a data center's network infrastructure with a massive volume of traffic, rendering it inaccessible to legitimate users.
Further, ransomware attacks pose a significant threat to such center construction projects by encrypting critical project files, documents, and communications systems, effectively disrupting project workflows and causing delays. Attackers may demand ransom payments in exchange for decryption keys, further exacerbating the impact on project timelines and budgets. Thus, such factors may impede market growth during the forecast period.
The market share by the enterprise segment will be significant during the forecast period. Enterprises across various industries, such as healthcare, BFSI, and IT, are undergoing digital transformation initiatives to remain competitive in today's digital economy. This transformation involves the adoption of cloud computing, big data analytics, Internet of Things (IoT) devices, artificial intelligence (AI), and other digital technologies, all of which require robust infrastructure to store, process, and analyze vast amounts of information.
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The enterprise segment showed a gradual increase in the market share of USD 5.85 billion in 2018. They plays a critical role in disaster recovery planning by providing redundant infrastructure, backup power supply, and replication services to minimize downtime and loss in the event of disruptions. Overall, the growing demand for centers for enterprises in the US reflects the increasing reliance on digital technologies, the expansion of online services, and the need for scalable, secure, and resilient infrastructure to support business growth, innovation, and competitiveness in the digital age. Hence, the growing demand will have a positive impact on the growth of the data center construction market in US during the forecast period.
Data centers are critical infrastructure for the IT and telecom industry, providing the necessary computing power and storage for a wide range of applications and services. Cloud computing has become a popular way for businesses to access computing resources without having to invest in expensive hardware and infrastructure. They play a crucial role in 5G deployments by providing edge computing capabilities, caching content closer to end-users, and supporting network functions virtualization (NFV) and software-defined networks (SDN) technologies. Further, IoT devices generate vast amounts that need to be processed and stored. These are essential for managing and providing real-time analysis for applications such as smart homes, smart cities, and industrial automation. Thus, such factors will boost the growth of the data center construction market in US during the forecast period.
The market forecasting report includes the adoption lifecycle of the market research and growth, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and trends strategies.
Global Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Market analysis and report of qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Information is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market research report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018-2028
The market is experiencing rapid growth, driven by the demand for hyperscale data centers and advancements in IT infrastructure. With the increasing volume of data consumption and the proliferation of IT projects, organizations are investing in state-of-the-art facilities to meet their needs. Server segment, storage equipment, and cooling segment players have vital roles. Key considerations include power distribution and cooling solutions to maintain optimum temperature and humidity levels alongside security infrastructure to combat cyber threats and ensure data privacy. This market also sees significant activity in mergers, partnerships, and acquisitions among public cloud providers and multi-tenant facilities.
Additionally, industries such as the BFSI industry, manufacturing industry, and energy industry are driving demand for high-performance computing and intelligent computing, while 5G networks and network function virtualization (NFV) are shaping the IT and telecom segment. As deep learning and precision medicine gain traction, the need for robust server, storage, and networking equipment becomes paramount, positioning the market for continued expansion. Furthermore, the market is propelled by advancements such as GPUs and innovations in cloud computing, monitored by organizations like the National Science Foundation.
Furthermore, compliance with regulations like the Health Insurance Portability and Accountability Act of 1996 (HIPAA) governs the management of Electronic Health Records (EHR) and Electronic Medical Records (EMR), safeguarded by security infrastructure investments. Technologies like sensors and wearables enable remote monitors of facilities, crucial for ensuring uptime and compliance. Amidst miscellaneous expenses, the construction of hyperscale facilities and multi-tenant facilities flourishes, integrating redundancy and Tier 3 segment standards to meet growing demands in the market.
However, the cloudscene and the CMS (Office of the Actuary) are closely monitoring the global data center construction market, particularly focusing on multi-tenant or colocation facilities. One of the key considerations in this market is the security infrastructure costs, along with property costs and building and shell construction costs. These factors play a crucial role in determining the viability and success of data center projects. Both Cloudscene and the CMS are actively involved in analyzing and assessing these costs to ensure that data center construction projects meet regulatory standards and are sustainable in the long term.
Market Scope |
|
Report Coverage |
Details |
Page number |
160 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 9.6% |
Market Growth 2024-2028 |
USD 11.99 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
8.88 |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
ABB Ltd., AECOM, AMETEK Inc., Delta Electronics Inc., DPR Construction, Eaton Corp. Plc, Emerson Electric Co., FORTIS CONSTRUCTION Inc., Gilbane Inc., HDR Inc., Hensel Phelps, HITT CONTRACTING INC., International Business Machines Corp., Iron Mountain Inc., J.E. Dunn Construction Co., Nippon Telegraph And Telephone Corp., SAS Institute Inc., Schneider Electric SE, Siemens AG, and Turner Construction Co. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and market condition analysis for the forecast period. |
Customization purview |
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