Global Data Center Construction Market Report and Forecast 2024-2032

Key Takeaways

• In 2023, the United States had 5375 data centers, followed by Germany (522), Britain (517), and China (448 ).

• World’s biggest data centers by power consumption are situated in Northern Virginia, Beijing, London, Singapore, and other global cities.

• In November 2023, Microsoft is investing $500 million in Canada to construct new data centers and increase its local cloud footprint by 750%.

Data center construction refers to the process of building a physical facility to maintain essential IT infrastructure that is responsible for storing, managing, and running various applications and services. It is supported by a robust network of uninterruptible power supplies, security systems, and proper ventilation and cooling systems, among others, to ensure its smooth functioning. It provides multiple benefits to businesses, including operational flexibility and significant cost savings.

The market is being driven by developments in cloud-based technologies, the rise of remote working culture, and the proliferation of IoT devices. Hyperscalers such as Google, Meta and Microsoft are witnessing a surge in demand for their services, which is positively influencing the data center construction market.

Business productivity has steadily improved with time as the construction of data centers has enabled people to collaborate on important projects remotely. Besides, the increasing popularity of smart devices is also favouring the demand for data centers.

Key Trends and Developments

Improvements in energy efficiency; establishment of high load capacity; rising development of weather-resistant data centers; and the growing popularity of modular data centers are the major trends impacting the data center construction market growth.

Global Data Center Construction Market Trends

A data center consumes 205 terawatt hours + of electricity each year. This is more than the annual energy consumption of Ireland, Denmark, or Taiwan. Many companies, including Intel and Dell, are developing modular data centers, which can enable them to extend the life of their computing ecosystems by merely changing the HPU (Host Processing Unit).

AI compute differs from traditional compute in terms of power consumption, heat emission, and space requirements. The design of high load capacity data centers requires extensive consultations with stakeholders during the designing stage to ensure smooth collaboration between operations, security, and other teams, which prevents the company from financial pitfalls.

Besides, with the usage of high quality materials and by leveraging AI for data center monitoring operations, companies can expect significant gains from constructing data centers in the forecast period.

Market Segmentation

“Global Data Center Construction Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Electrical infrastructure is further divided based on type into UPS systems and others, whereas mechanical infrastructure is further classified on type into cooling systems and racks, among others.

Small and medium scale data centers are expected to dominate the data center construction market share in the coming years.

Small and medium scale data centres are expected to constitute a major market share in the coming years. This can be attributed to the proliferation of latency-sensitive services provided digitally, which are necessitating the need for establishing edge computing data centers at locations which are the closest to the consumer.

Over the forecast period, thousands of small and medium scale data centers are expected to be established by companies, which can impact the data center construction market growth favourably. As the challenges surrounding manpower shortages and supply chain delays ease, the construction of large scale data centers is also expected to register a significant growth. Such data centers play a critical role in storing and processing large amounts of data which are required by multinational companies.

The BFSI sector is a significant end-user of data center construction due to the digitisation of banking services

The banking, financial services, and insurance sector is expected to lead the market in the coming years. The digitalisation of banking services and products has created the need for maintaining an online customer profile with records of their previous interactions with the bank. Data centers have also become important for storing sensitive customer information, including video KYCs and ATM card details, aiding the data center construction market expansion.

The IT and telecommunications industry is also expected to remain a significant end-user of data centers. Data centers enable high speed processing and connectivity of data, while ensuring data safety and security of transmission. A similar trend of growth is also expected to occur for the healthcare, and government and defence sectors, among others.

Competitive Landscape

Major market players are making significant investments in land acquisition and creating sustainable data centers

Other key players in the global data center construction market include HITT Contracting Inc., Hensel Phelps, PCL Constructors Inc., Clune Construction Company, J.E. Dunn Construction Company, Turner Construction Company, Holder Construction Group, LLC, and DPR Construction, among others.

Data Center Construction Market Analysis by Region

Europe is expected to dominate the market in the coming years amid increasing investments in data centres by end-use sectors. For instance, in September 2023, Virtus Data Centers announced an investment of 3 billion euros in Germany for establishing a data center campus.

Similarly, in September 2023, Australia’s largest pension fund provider, AustralianSuper, announced an investment of 1.5 billion euros into the Vantage Data Center’s operations in Europe, Middle East, and Africa. With increasing demand for services provided by major cloud based companies, the global data center construction market demand is expected to grow significantly in the forecast period.

Key Highlights of the Report

Data Center Construction Market Report Snapshots

Data Center Construction Market Size

Data Center Construction Market Trends

Data Center Construction Market Share

Data Center Construction Companies

Data Center Construction Market Regional Analysis