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The Data Center General Construction Market size is estimated to increase by USD 19.95 billion, at a CAGR of 10.39% between 2023 and 2028. Market expansion hinges on various factors, including heightened investment in data centers, increased adoption of colocation services, and soaring demand for cloud-based solutions. The rise in data center investment reflects the growing need for infrastructure to support digital operations, data storage, and processing requirements. Additionally, the uptake of colocation services offers businesses cost-effective solutions for housing their IT infrastructure while accessing shared resources and expertise. Moreover, the high demand for cloud-based services underscores a shift towards scalable and flexible computing solutions, driving market growth as organizations seek to leverage cloud technologies for agility and efficiency. These interconnected factors collectively shape the trajectory of the market, driving innovation and investment in data center and cloud infrastructure to meet evolving business needs.
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The BFSI segment is estimated to witness significant growth during the forecast period. The increasing digitization of core processes and the generation of a considerable amount of data across various sectors are the main factors that will fuel the growth of this segment. In addition, the number of digital transactions and the addition of new users are increasing in the BFSI sector. Furthermore, in this situation, to improve operational efficiency, financial organizations are demanding data center infrastructure to store financial data safely.
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The BFSI segment was the largest segment and was valued at USD 5.77 billion in 2018. Moreover, a large volume of customer behavior content is being generated as organizations move toward customer-centricity. In addition, data center infrastructure allows financial institutions to meet compliance requirements, data management, security, and transparency challenges. Furthermore, increasing government emphasis on the importance of creating a cloud warehouse for the safe and secure storage of huge amounts of financial data is expected to drive the demand for data center infrastructure. Hence, such factors are fuelling the growth of this segment which in turn will drive the market during the forecast period.
The rise in investment in data center construction will fuel the base building shell construction segment which will increase the market. The base building shell construction segment comprises building permits, local taxes, land excavation and grading, roadways, tie-ins to utilities, and building shell costs. In addition, these are the cost factors to be considered while constructing a base building shell construction. Moreover, partnering with general construction service providers will provide the following benefits in commissioning facility management by minimizing initial capital investment. Furthermore, reducing errors and delivering seamless execution by following procedures prepared during the planning process are some of the benefits provided by general service providers while constructing a data center. Hence, such factors are fuelling the growth of this segment which in turn will drive the market growth during the forecast period.
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North America is estimated to contribute 31% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The growth of the market in North America is fuelled by an increase in consumer and enterprise data traffic owing to factors such as growing demand for IoT devices, increasing implementation of autonomous technologies across enterprises, rising investments in artificial intelligence (AI), and growing investments in autonomous vehicles. In addition, North America has been dominated by two hubs in data center construction: the US and Canada. In Canada, Toronto is the dominating location for data centers because of its fiber connectivity, cool ambient temperature, low electricity tariffs, tax-friendly environment, and low risk of natural disasters. Hence, such factors are driving the market growth in North America during the forecast period.
The market thrives within the Information Technology Sector, driven by the exponential growth of IoT, Big Data Analytics, and Artificial Intelligence. As the demand for IoT Devices and Data Centers escalates, the need for robust Data Exchange, Data Storage, and efficient Data Flow becomes imperative. Data Center Architecture evolves to accommodate computing economics and optimize data consumption. Hyperscale facilities and Multi-tenant facilities dominate the landscape, with Public cloud providers and Colocation services leading the charge. Strategic Mergers, Partnerships, and Acquisitions shape the market dynamics, while advancements in Servers, Edge computing, and IT equipment drive innovation. Efficient cooling equipment addresses temperature and humidity levels, mitigating miscellaneous expenses and security infrastructure costs. Amidst escalating property costs, the industry remains resilient, fostering growth and sustainability in data center construction.
The market experiences notable growth driven by increased investment in data centers. This surge stems from the rising adoption of cloud services and the generation of substantial data volumes across enterprises. Major players like Google, Amazon.com, Apple, and Facebook heavily invest in constructing their data centers, often collaborating with general construction providers for design and engineering services.
For example, Facebook partnered with DPR Construction to build a data center in Central Oregon. Enterprises' heightened investments in constructing their data centers, like Amazon's announcement of cloud data centers in Indonesia, positively impact the global market. This trend fuels demand for design and construction management services, propelling market growth during the forecast period.
The growing focus on the construction of green data centers is a key trend influencing market growth. Green data centers are energy efficient and are built to reduce environmental impact. They use low-emission building materials to create sustainable ecosystems through efficient waste recycling. The construction and operation of green data centers include advanced technologies and strategies. Enterprises are focusing on constructing green data centers.
For instance, in April 2019, Flipkart announced its plan to open a second green data center in Telangana, India, to strengthen its technological infrastructure. Increased power consumption by data centers results in higher pricing of services offered to end-users as well as the OPEX of enterprises. The use of renewable energy sources, free cooling, and waste recycling are some of the measures being implemented in data centers to improve efficiency and performance. Thus, growing interest in green data centers will support the growth of the global market during the forecast period
Delays in delivering the projects on time may impede the data center's general construction market growth. One of the main challenges is to meet the contractual schedule and performance requirement that the companies in the market have guaranteed, which severely affects the operating results. In addition, the scheduled delays will generally exceed a project's projected cost.
Moreover, project performance can be affected by numerous factors beyond vendor control, including unavoidable delays from governmental inaction, public opposition, inability to obtain financing, weather conditions, unavailability of supply materials, changes in the project scope of services requested by clients, industrial accidents, environmental hazards, and labor disruptions. Hence, such factors are hindering the market growth during the forecast period.
The market report includes the adoption lifecycle of the market, 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 growth strategies.
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.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
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 provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments
The market is buoyed by the exponential growth in the Information Technology Sector and the proliferation of Internet of Things (IoT) devices. With Big Data Analytics driving demand for robust Data Exchange, Storage, and efficient Data Flow, the importance of Data Center Architecture is paramount. Cloud Computing and IP-Based Networking further enhance connectivity and scalability. Industries ranging from Healthcare to Banking, Manufacturing to Energy, rely on Data Center Design for efficient operations. The BFSI and Healthcare sectors prioritize Security Infrastructure and Data Storage capabilities. Cooling solutions and Power backup are critical for Hyperscale facilities and Multi-tenant facilities ensuring Cooling efficiency and Redundancy. Edge computing and High-performance computing cater to evolving needs, while Colocation service providers and Telecommunications service providers play vital roles in Data center outsourcing. As Media providers and E-commerce companies demand increased Storage capacity and Balanced workload, the Data Center General Construction market remains integral to modern infrastructure development.
Furthermore, the market experiences significant traction across various sectors including Healthcare, Automation, Banking, and Manufacturing, driven by the exponential growth of data consumption. As demand surges, IT & Telecommunication, Oil & Energy, and Media & Entertainment industries invest in robust computing economics to bolster infrastructure. Public cloud providers and social networking giants expand their data centers, necessitating meticulous construction to meet Tier 3 standards. Construction entails precision in electrical and mechanical aspects, ensuring optimal airflow and cooling equipment efficiency while adhering to security and humidity regulations. Property and building costs are factored alongside miscellaneous and security infrastructure expenses in the BFSI and healthcare sectors. With an emphasis on financial and service industries, the data center construction market evolves to accommodate the evolving landscape of digital infrastructure. The healthcare sector, automation sector, banking sector, and manufacturers are key players in today's economy. With increasing reliance on automation, these sectors are evolving rapidly to meet demand. Additionally, power plants and electrical construction play pivotal roles in infrastructure development, ensuring sustainable energy sources and efficient electrical systems for industries worldwide.
Data Center General Construction Market Scope |
|
Report Coverage |
Details |
Page number |
178 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 10.39% |
Market Growth 2024-2028 |
USD 19.95 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
10.14 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
North America at 31% |
Key countries |
US, Canada, China, UK, and Germany |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
ABB Ltd., ACS Actividades de Construccion Y Servicios SA, AECOM, Arup Group Ltd., Brasfield and Gorrie LLC, CORGAN, CyrusOne LLC, Digital Realty Trust Inc., DPR Construction, HDR Inc., Jacobs Solutions Inc., Jones Engineering Holdings Ltd., Legrand SA, M. A. Mortenson Co., Page Southerland Page Inc., Schneider Electric SE, Skanska AB, STO Building Group, The Walsh Group, and Vertiv Holdings Co. |
Market dynamics |
Parent market analysis, Market forecasting, 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 market forecast period. |
Customization purview |
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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 End-user
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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