July 22, 2024

Hyperscale Data Center Segment Is The Largest Segment Driving The Growth Of Data Center Construction Market

Market Overview:

Data center construction involves building infrastructure to accommodate servers, storage, networking, and other related data center components. It includes installation of electrical and mechanical systems such as chillers, uninterrupted power supply (UPS) systems, computer room air conditioning (CRAC) units, and others. The increasing demand for hyperscale data centers from cloud, content providers, and co-location service providers is driving the growth of the market.

The global Data Center Construction Market Size is estimated to be valued at US$ 62586.47 Mn in 2023 and is expected to exhibit a CAGR of 7.4% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market key trends:

One of the key trends in the data center construction market is the increasing adoption of cloud-based services by enterprises across industries. This has led to hyperscale data center developments by cloud service providers such as Amazon Web Services, Microsoft Azure, Google Cloud, IBM Cloud, and Alibaba Cloud globally. For example, in January 2022, Amazon Web Services announced plans to build new data center regions in Switzerland and Israel to support increasing customer demand for AWS in these nations. Another significant trend impacting the market growth is the increasing deployment of modular data center solutions among organizations to address space constraints and reduce construction time. These modular data centers provide flexibility, scalability, and lower costs compared to traditional data center builds.

SWOT Analysis

Strength: The Data Center Construction Market is driven by rising demand for cloud-based services and increased digitalization. With more companies moving online, the need for data centers has increased significantly.

Weakness: High initial investment and long payback periods associated with data center construction projects pose challenges. Large capital expenditures have to be made just to set up the basic infrastructure facilities.

Opportunity: Expanding applications of technologies such as artificial intelligence, 5G, and edge computing are creating new opportunities. This is spurring more data center development globally to support additional processing and storage needs.

Threats: Intense competition among major data center operators puts pressure on profit margins. Rising energy costs and strict carbon emission norms also threaten the sustainability and growth prospects of the industry.

Key Takeaways

The global Data Center Construction Market is expected to witness high growth, exhibiting CAGR of 7.4% over the forecast period, due to increasing digital transformation across industries. Rapid uptake of cloud computing and digital services by enterprises is driving the demand for data storage and processing infrastructure worldwide.

North America dominates the global market currently, due to heavy investments by tech giants such as Amazon Web Services, Microsoft, Google and Facebook in the region. The US and Canada are mature as well as lucrative markets. However, Asia Pacific is emerging as the fastest growing regional market, led by China, India, Japan and Singapore. Countries in this region are aggressively expanding their digital infrastructure to attract global hyperscalers and support their own indigenous digital economy goals.

Key players operating in the Data Center Construction market are DPR Construction, Inc., Turner Construction Co., Holder Construction Company, Hensel Phelps Construction Co, Balfour Beatty US, Helix Electric, Sudlows, Kraus Anderson Construction, The Beck Group, PCL Construction Enterprises, The Walsh Group, Hill International, and Engineered Structures, Inc. (ESI). The market is characterized by the presence of both global engineering contractors as well as regional specialist construction firms. Comprehensive offerings ranging from design to commissioning are enabling leading firms to gain share.

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