Data Center Construction Market size was valued at USD 240 Billion in 2023 and is predicted to exceed USD 546.62 Billion by the end of 2036, registering over 7.1% CAGR during the forecast period i.e., between 2024-2036. In the year 2024, the industry size of data center construction is estimated at USD 257.04 Billion.
The main reason for the growth of the data center construction market is the exponential growth of data generation and consumption. The rapid growth of online services, cloud technology, Internet of Things (IoT) gadgets, and streaming has led to an increase in data creation and use. This in turn translates to a need for more data centers to handle and process all this information. As companies move to cloud-based options, the need for data centers also goes up to keep up with the growing need for cloud services. For example, Amazon Web Services (AWS), a top cloud provider, keeps growing its global setup, adding new data centers to meet the rising demand for its offerings. Data centers offer a place for the ever-increasing number of servers and computers that drive our digital era. They also put in place strong security steps to keep important information safe. The huge amounts of data produced need strong computing power for analysis. Data centers give the needed setup to run complex programs and apps that pull insights from this data.
Growth Drivers
Challenges
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Base Year |
2023 |
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Forecast Year |
2024-2036 |
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CAGR |
7.1% |
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Base Year Market Size (2023) |
USD 240 Billion |
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Forecast Year Market Size (2036) |
USD 546.52 Billion |
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Regional Scope |
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Infrastructure (Electrical, Mechanical, General)
Electrical sub segment is anticipated to hold over 46% data center construction market share by the end of 2036. The segment growth is driven by technological advancements. Advancements in electric and mechanical systems, like energy-saving UPS units, modern cooling methods, and intelligent HVAC systems, are driving the growth of both the electrical and mechanical infrastructure sub segments. The electrical infrastructure segment is set to see a notable growth rate of around 5.4% from 2024 onwards. This sub segment is vital for ensuring dependable power flow and control within data centers.
The mechanical infrastructure sub segment includes cooling mechanisms, racks, and other related components. Cooling mechanisms are key for keeping ideal temperatures inside data centers. The growth of the mechanical infrastructure section is due to the expanding size and complexity of data centers. Effective cooling is essential to avoid overheating and to make sure data center gear works correctly.
Data Center Type (Tier I and II, Tier III, Tier IV)
By the end of 2036, tier III data centers segment is set to capture around 51% data center construction market share. The growth of this segment is because of Tier III data centers offering a more reliable service compared to Tier I and II. They have varied distribution routes for both power and cooling systems, ensuring they can be maintained efficiently without interrupting service. These centers can offer around 99.982% uptime, which translates to about only 1.6 hours of downtime yearly. Tier III data centers are perfect for companies that that require high availability and cannot afford frequent or prolonged outages. Tier III centers are built to keep critical apps and business operations going without any glitches. Tier IV centers push for even higher reliability, targeting about 99.995% uptime. This means that they typically experience under 0.4 hours of downtime annually.
Organization Size (Small, Medium, Large)
In data center construction market, large organization size segment is estimated to capture over 42% revenue share by 2036.The growth of large organization data centers comes from the need for vast data handling and storage, the spread of cloud services, and the expansion of sectors like IT, telecom, and healthcare. These centers allow for the management of huge data sets, support cutting-edge tech like AI and ML, and provide solid groundwork for key tasks of organizations of all sizes. On the other hand, the increase in medium-sized data centers is due to more use of digital technologies, the need for smart data management, and the demand for reliable IT setups. These centers offer organizations the ability to grow their operations while keeping data safe and easy to access. These factors drive the demand for construction of data centers globally.
Our in-depth analysis of the data center construction market includes the following segments:
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Infrastructure |
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Data Center Type |
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Organization Size |
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End User |
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North America Market Statistics
North American in data center construction market is expected to hold over 38.32% revenue share by the end of 2036. The North American market is expected to reach around USD 38 billion by 2030. The market growth in the region is spurred by the rise of digital services, cloud tech, the Internet of Things (IoT) gadgets, and media streaming making it necessary to build more data centers to manage and process this vast amount of information. The demand for network and connectivity solutions that offer faster and more dependable links between data centers is also pushing the construction of facilities that can support strong infrastructure for these needs.
The data center construction market in the United States is forecasted to hit a value of USD 134.2 billion by the end of the forecast period, growing at a CAGR of 6%. The United States leads the market in North America, taking up a revenue share of 43% in 2022. The introduction of the Electronic Medical Records (EMR) Mandate in the United States has pushed the use of cloud-based healthcare systems for storing and safeguarding patient records. This development has boosted the demand for data center construction, fueled by the expansion of digital data in the healthcare industry.
Canada's data center construction market growth is propelled by the increased adoption of cloud computing, the need for more effective data center operations, and the rising demand for data center infrastructure. Factors like significant investments in tech infrastructure, higher data consumption, and the business demand for cloud services are fueling the data center construction market growth in Canada.
APAC Market Analysis
The APAC region will also encounter huge growth for the data center construction market during the forecast period and will hold the second position owing to the increasing digitalization efforts. The market is expected to reach USD 25 billion by 2028 alone, growing at a CAGR of 7%. Several countries in Asia Pacific, such as Singapore, Malaysia, Thailand, and the Philippines, are prioritizing digital advancements. Government support and ongoing digital efforts are significant factors pushing the growth of the data center construction market in this area. The rising demand for cloud services also plays a crucial role in driving market growth. Moreover, the rollout of 5G networks is boosting the need for edge data centers in Asia Pacific. This demand is prompting the building of data centers closer to users, accelerating market growth.
China holds a dominant position in the APAC data center construction market. The Chinese government has issued policy papers advocating for the development of new data center clusters in four areas, as part of the 'Eastern Data, Western Computing' strategy to balance the supply and demand of computing capacity.
Singapore is another crucial player in the Asia Pacific data center construction market, recognized for its sophisticated infrastructure and connectivity. The country has become a central point for data centers in the region, drawing investments and acting as a gateway to Southeast Asia. Singapore's underwater cable connections have played a role in its emergence as a data center hub.
The landscape for companies in the data center construction market is lively and marked by competition. Numerous leading companies are at play, each pushing to bring forward newer solutions to satisfy client needs and upgrade their range of services. These organizations aim relentlessly to stand out by delivering inventive and more efficient offerings in response to evolving market demands.
Author Credits: Abhishek Verma
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