December 8, 2024
Data Center Construction Market

The Global Data Center Construction Growth Is Projected To Propelled By Increased Adoption Of Cloud Computing

Data centers are facilities that house critical computing infrastructure such as servers, storage, networking, and other supporting infrastructure that are essential for IT operations. Data center construction involves the design, building, and management of data center facilities aimed at housing critical IT infrastructure. Major activities during data center construction include site selection, flooring layout, installation of critical infrastructure such as cooling, power distribution, physical security systems, fire suppression, among others. Data center construction is gaining traction with increasing adoption of cloud computing and outsourcing of IT infrastructure by organizations.

The global data center construction market is estimated to be valued at US$ 72099.62 Mn in 2023 and is expected to exhibit a CAGR of 6.4% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.

Market key trends:

Increased adoption of cloud computing is a key trend fueling growth of the data center construction market. Cloud computing offers on-demand access to shared computing resources such as servers, storage, networking, software, analytics and intelligence over the internet on pay-as-you-go basis. It provides benefits such asscalability, flexibility and lower upfront costs compared to maintaining own on-premise IT infrastructure. According to Synergy Research Group, spending on cloud infrastructure services grew 37% to $49 billion in Q1 2021. Growing reliance of organizations on cloud-based services is increasing the need for construction of cloud-enabled data centers with high scalability and security features. This is driving investments in data center construction activities to support rising needs of cloud infrastructure.

SWOT Analysis

Strength: The data center construction market is growing rapidly due to increasing demand for cloud-based services and digital content. This demand is driving investments in data center infrastructure development and expansion projects.

Weakness: High initial investments and long break-even periods associated with data center construction projects pose major challenges for investors. Rising costs of construction materials and potential delays can negatively impact project budgets and timelines.

Opportunity: Growing demand for high-performance computing and edge infrastructure from sectors like telecom, IT, manufacturing, etc provide numerous opportunities for data center contractors and construction companies to bid for new projects.

Threats: Stringent environmental regulations around energy consumption and emissions from data center operations pose compliance challenges for construction companies. Growing demand for renewable energy sources for powering data centers also increases project costs.

Key Takeaways

The Global Data Center Construction Market Size  is expected to witness high growth over the forecast period from 2024 to 2031 driven by rapid digital transformation across industries. The global data center construction market is estimated to be valued at US$ 72099.62 Mn in 2023 and is expected to exhibit a CAGR of 6.4% over the forecast period 2024 to 2031.

North America currently dominates with the largest share of the market owing to heavy investments by leading cloud and internet companies in the region to develop hyperscale data center parks. The U.S. and Canada are emerging as major hubs for cloud infrastructure. The Asia Pacific region is projected to experience the fastest growth in the coming years led by countries like China, India, Japan, Singapore and Australia. Expanding cloud adoption, 5G deployments, growth of technologies like AI, ML and IoT are driving massive investments in building new data centers as well as expanding and upgrading the existing infrastructure in Asia Pacific.

Key players operating in the data center construction market are Regeneron Pharmaceuticals, Inc., Alimera Sciences, Oxurion NV., Abbvie Inc. and F. Hoffmann-La Roche Ltd. Major data center contractors active in designing, building and managing hypercale data center projects for cloud providers include AECOM, DPR Construction, Holder Construction, Jacobs, and Arup. These companies are focusing on integrating sustainable design and operational practices to build more energy efficient data centers.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it

Money Singh
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Money Singh is a seasoned content writer with over four years of experience in the market research sector. Her expertise spans various industries, including food and beverages, biotechnology, chemicals and materials, defense and aerospace, consumer goods, etc. 

Money Singh

Money Singh is a seasoned content writer with over four years of experience in the market research sector. Her expertise spans various industries, including food and beverages, biotechnology, chemicals and materials, defense and aerospace, consumer goods, etc. 

View all posts by Money Singh →