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The Data Center Construction Market size is forecast to increase by USD 37.66 billion, at a CAGR of 8.75% between 2023 and 2028. The growth rate of the market depends on several factors, including the rising demand for data center colocation facilities, the increasing data center investments and center modernization, and the increasing demand for cloud-based services. This involves the establishment of an entire facility. It includes investments in general, electrical, and mechanical construction. General involves planning the architectural design according to the client's requirements and constructing the building shell. Electrical includes the installation of electrical equipment such as uninterruptible power supply (UPS), generators, transfer switches and switchgear, and power distribution units (PDUs). Mechanical type includes the installation of equipment such as cooling solutions, racks, and server rail kits.
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One of the key factors driving the market growth is the increasing data center investments and data center modernization. The demand is increasing due to a rise in the adoption of cloud services and the generation of a considerable volume, variety, veracity, and velocity across enterprises. In addition, companies such as Google, Amazon.com, Apple, and Facebook are investing significantly in building their own centers.
Moreover, these companies are clients of the service providers. In addition, they approach service providers for design, engineering, and mechanical services. Therefore, an increase in investments by enterprises to build their own centers will have a positive impact on the market growth. Hence, such factors are driving the market growth during the forecast period.
A key factor shaping the market is the growth in investments in hyperscale data centers. The market is steadily growing fuelled by the Smart Revolution, which includes the development of smart cities, smart grids, and smart homes which in turn generate a large amount of information. In addition, processing this information has become a priority, which has led to an increase in the number of hyperscale centers.
Moreover, the development of cloud computing platforms has been one of the major reasons underlying an increase in the need for hyperscale centers. In addition, large numbers of hyperscale centers are being constructed to manage the increasing amount of information being generated. Hence, such factors are positively impacting the market which in turn drives the market during the forecast period.
Consolidation of data centers is one of the key challenges hindering market. Several enterprises are focusing on reducing the size of facilities. In addition, infrastructure-as-a-service (IaaS) is an important concept wherein several companies implement IaaS, which results in consolidation.
Moreover, the major reason for consolidation is lowering the operating cost. In addition, the need for individual facilities is reducing as several software companies are adopting a common cloud platform. Furthermore, network equipment providers are launching hyper-converged equipment, which is increasing the demand for virtualization. Hence, such factors are negatively impacting the market which in turn hinders the market growth during the forecast period.
The enterprise segment is estimated to witness significant growth during the forecast period. The growth in the segment is fuelled by the increase in business traffic. Therefore, there is a need to scale up center infrastructure. Most business and consumer-based applications generate a large volume of structured and unstructured type. In addition, some information are also stored on-premise in enterprises, and some information are stored in these facilities.
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The enterprise segment was the largest segment and was valued at USD 19.03 billion in 2018. Moreover, the increasing adoption of high-performance computing in enterprises improves the performance of applications. In addition, high-performance computing systems help in the extensive transformation of existing infrastructure, including network, cooling, and storage. For instance, all businesses must process a large volume of information to derive insights and solve problems. Furthermore, processing, performing analytics, and solving engineering equations necessitate the use of high-performance computing systems. Therefore, to process a large volume of structured and unstructured information, enterprises are investing in high-performance and high-capacity centers, which is driving the market during the forecast period.
The advantages of the electrical construction segment will increase the market. The electrical construction segment of information centers comprises the installation of the generator's UPS Transfer switches, which include automatic transfer switch (ATS) static transfer switch (STS), and switchgear PDUs Generators. In addition, the market for generators is growing due to the increasing need for a backup power supply when the primary power supply is lost. Furthermore, enterprises can choose generators based on the fuel option for reducing the operating cost. Moreover, the market for generators is growing because they are the ideal deployment option for long backup periods. Hence, such factors are fuelling this segment which in turn drives the market during the forecast period.
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North America is estimated to contribute 34% to global market during the forecast period. Technavio's analysts have provided extensive insight into the market forecast, detailing the regional trends and drivers influencing the market's trajectory throughout the forecast period. The demand in North America is fuelled by the increasing consumer and enterprise traffic. In addition, factors such as the growing demand for IoT devices, the implementation of autonomous technologies by several enterprises, the rising investments in AI, and the growing investments in autonomous vehicles. Moreover, the major reason for the dominance of North America is the increasing establishments in the region. Hence, such factors are driving the market in North America 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.
ABB Ltd: The company offers solutions such as intelligent grid and connections, data center power distribution, data center power protection, data center smart automation, data center cooling, server room solutions, and others.
AECOM: The company offers such as Sentinel Data Centers that provide construction management services over a three-phase delivery.
AMETEK Inc: The company offers solutions such as Data Acquisition Units that seamlessly interface with multi-function cockpit displays, EICAS, voice recorders, flight data recorders, FADECs, air data computers, maintenance computers, fluid management systems, autopilot, engine data collection units, aircraft mission management computers and much more.
The Market growth and forecasting report also includes detailed analyses of the competitive landscape of the market and information about 21 market companies, including:
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. Data 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 to 2028.
The Market is experiencing rapid growth driven by increasing demand for public cloud providers and colocation services. Multi-tenant facilities cater to diverse industries like BFSI, manufacturing, healthcare, and energy, requiring robust IT infrastructure and security infrastructure to handle data consumption efficiently. With the rise of artificial intelligence and edge computing, data centers are evolving to incorporate advanced technologies like 5G networks, IoT, and intelligent computing. Tier 3 segments ensure reliability and uptime, while hyperscale facilities meet the needs of large-scale operations. Construction costs encompass building and shell construction, cooling equipment, and networking infrastructure, reflecting the critical importance of power distribution and cooling solutions in this dynamic and expanding market.
The Global Data Center Construction Market is witnessing rapid growth propelled by the increasing demand for data center outsourcing and the proliferation of servers and networking equipment. With the integration of cutting-edge technologies such as artificial intelligence (AI), Internet of Things (IoT), network function virtualization (NFV), and software-defined networks (SDN), data center infrastructure is evolving to meet the demands of modern digital ecosystems.
The cooling segment, which includes miscellaneous expenses, security infrastructure costs, property costs, and building and shell construction costs, is a critical component of data center construction, ensuring optimal performance and reliability. As the volume of data continues to soar, investments in IT and telecom segments are surging, driving innovation and efficiency in data management and storage. AI is playing a pivotal role in enhancing data center operations, optimizing resource allocation, and improving energy efficiency. With advancements in AI-driven automation and predictive analytics, data centers can deliver higher performance and scalability while reducing operational costs. Overall, the global data center construction market is poised for significant expansion, driven by the increasing adoption of AI and other advanced technologies to meet the growing demands of the digital economy.
Data Center Construction Market Scope |
|
Report Coverage |
Details |
Page number |
186 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 8.75% |
Market Growth 2024-2028 |
USD 37.66 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
8.55 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
North America at 34% |
Key countries |
US, China, Japan, UK, and Germany |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
ABB Ltd., AECOM, AMETEK Inc., Arup Group Ltd., Asetek AS, Clune Construction Co., Delta Electronics Inc., DPR Construction, Eaton Corp. Plc, Emerson Electric Co., FORTIS CONSTRUCTION Inc., Gilbane Inc., HDR Inc., Hensel Phelps, HITT CONTRACTING INC., Iron Mountain Inc., J.E. Dunn Construction Co., Nippon Telegraph And Telephone Corp., SAS Institute Inc., 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, Market condition analysis for the forecast period |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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