Data Center Construction - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2024 - 2029)

The Data Center Construction Market size is estimated at USD 262.20 billion in 2024, and is expected to reach USD 355.80 billion by 2030, growing at a CAGR of 7.30% during the forecast period (2024-2030).

Key Highlights

• Under Construction IT Load Capacity: The upcoming IT load capacity of the Global data center market is expected to reach above 73,000 MW by 2029.
• Under Construction Raised Floor Space: The global construction of raised floor areas is expected to exceed 285 million sq. ft. by 2029.
• Planned Racks: The total number of racks to be installed is expected to reach more than 14 million units by 2029. North America is expected to house the maximum number of racks by 2029.
• Hyper-scale data centers are being built more often worldwide to store massive volumes of data, opening up lucrative opportunities for business players. Many industries use hyper-scale data centers to increase computing power, memory, networking capabilities, and storage resources. The ability to effectively scale up computer workloads at a large scale and the physical infrastructure and distribution systems supporting the data centers are two of the many components of hyper-scale data centers.
• Moreover, According to Flexera State of the Cloud Report 2023, 72% of companies' respondents stated they had deployed a hybrid cloud in their business. Migrating to hybrid cloud solutions often comes at the expense of operating private and public clouds.

Data Center Construction Market Trends

Growing Adoption of Tier 4 Data Center Facilities is Driving the Market's Growth

• The Tier-IV certification is currently the highest classification among data center facilities. These facilities are equivalent to data centers used by the US government. They are highly secure, reliable, and redundant. Tier-IV providers have redundancies (2N+1) for every process and the data protection stream. No single outage or error can shut down the system, and it provides 99.995% uptime per annum, which is the highest guaranteed uptime. However, the level IV infrastructure should have at least 96 hours of independent power to qualify for this tier. This power must not be connected with any outside source and is entirely proprietary.
• This tier also ensures optimized efficiency. The servers are housed in the most physically advantageous locations. This drastically extends the life of the hardware if temperature and humidity levels are kept consistent. Even the backups and dual power sources are treated like primaries. The Tier-IV data center can require up to 3 to 1 of the space required to facilitate the IT footprint. For tier IV, the kW Cost Component is USD 25,000/kW of redundant UPS capacity for IT.
• Moreover, market players are investing in hyperscale data centers, which is, in turn, driving segment growth. For instance, in May 2023, Kazuna Data Centers (Kazuna), the largest hyperscale Tier 4 data center network in the Middle East and North Africa, announced its plans to partner with Benya Group, a leading provider of integrated solutions, digital transformation, and ICT infrastructure in Egypt to enter the markets of the Middle East and Africa and Egypt region. The new USD 250 million state-of-the-art data center will be Egypt's first hyperscale data center built in Maadi Technology Park, Egypt's first dedicated investment area.
• In July 2023, Digital Realty, a leading provider of carrier- and cloud-neutral data center, interconnection, and colocation solutions, announced its partnership with GI Partners in order to start a corporation for the sale of a 65% interest in two hyperscale data Tier 4 center buildings, which are stabilized. The company will receive around USD 743 million in gross proceeds from the joint venture and the associated financing.
• As with technological advancements such as AI, IoT, and 5G leading the digital transformation, various industry sectors, such as government, finance, media, and manufacturing, are starting to demand advanced data centers with high reliability. A few prominent technological vendors in the region, leveraging their years of expertise, are launching services that allow the end user to manage data center operations better.

North America Accounts for a Major Share

• North America dominates the global market for building data centers. A strong economy and cutting-edge network infrastructure are critical drivers for the market's expansion. The United States dominates the regional market and has many significant cloud service providers, including Amazon.com, Google Inc., and Facebook. These businesses invest in building massive data centers and increased data storage and processing capabilities, which present enormous market prospects.
• Furthermore, the growing demand for data security and privacy is driving the demand for data centers. According to the Identity Theft Resource Center, the count of data breaches in the United States in 2022 was 1,802. However, around 422 million individuals were affected by data breaches in the same year, including data leaks, breaches, and exposures. Although these are three separate events, they have one feature. An unauthorized malicious actor can access sensitive data under three circumstances. With the rise of data breaches and cyber threats, organizations and businesses seek secure and reliable data handling and storage solutions that only advanced data centers can offer.
• The United States is analyzed to hold a significant share. The rise in the new data centers in the country would drive the market. For instance, in May 2023, Polish software organization Comarch launched a data center of around 32,000 square feet (3,000 sqm) in the city of Phoenix, Arizona. The new data center is anticipated to be fully active starting the year of its announcement. The proposed data center comprises four server rooms with 160 racks and is expected to offer services with managed services, colocation, cloud hosting, disaster recovery, and backup services. It is also projected to provide meet-me rooms (MMR). Such developments are creating growth opportunities for the data center power market in the United States.
• Moreover, in January 2024, Vertiv Group Corp. announced that it increased the production capacity of its switchgear, busway, and integrated modular solutions (IMS) business by more than 100% since it acquired E&I Engineering and PowerBar Gulf LLC, switchgear, busway, and IMS business in 2021 and further, it is planning to expand its existing facilities through the end of 2025.
• The demand for Unified Communications-as-a-Service (UCaaS) solutions from telecom and business technology resellers in North America is also a factor in the market's expansion. To maximize system resilience to MSPs, VARs, ISPs, and interconnects, a player like SkySwitch offers white-label UCaaS from geographically varied sites.

Data Center Construction Industry Overview

The data center construction market is fragmented, consisting of several major players. With technological advancements and product innovations, many companies are increasing their presence in the market by securing new contracts and tapping new markets that cater to an intense rivalry. A few of the key players are AECOM, Whiting-Turner Contracting Company, and DPR Construction.

May 2023: Data4 Group, the French leader in data center operations and investments in Europe, announced that it would build a new data center campus on the former Nokia site in Nosee, Essonne, France. The project, which plans to invest around EUR 1 billion by 2030, aims to revitalize 22 hectares of industrial and office land and underscore the Group's strong presence in Paris.

April 2023: Microsoft announced the opening of its newest trusted cloud center in Poland, which will be the first in Central and Eastern Europe. Microsoft Poland's cloud region consists of three physical locations around Warsaw, each consisting of a single or several data centers. It ensures that data are stored in a country that is in compliance with the highest standards of security, privacy, and regulatory compliance.

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