Data Center Construction Market

Global Data Center Construction Market Size, Share & Industry Trends Analysis Report By Tier Type (Tier 3, Tier 2), By End-Use, By Type (IT Infrastructure, Electrical Infrastructure and Miscellaneous Expenses & Others), By Regional Outlook and Forecast, 2022 - 2028

Report Id: KBV-14356 Publication Date: March-2023 Number of Pages: 334
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Market Report Description

The Global Data Center Construction Market size is expected to reach $305.3 billion by 2028, rising at a market growth of 7.5% CAGR during the forecast period.

Data center construction is the collective operation of physically building a data center facility. The main goal is to plan and construct a data center with the appropriate capacity, disaster-resilient systems, and an effective layout to carry out all required operations. Backup power sources, data transmission links, security equipment, fire suppression systems, and air conditioning are typically included in the infrastructure.

Data Center Construction Market Size - Global Opportunities and Trends Analysis Report 2018-2028

Construction of data centers as per proper planning ensures that every resource is used to its fullest potential and that every environmental factor is considered. A data center is utilized to address IT-related computer equipment and systems. Under the flooring and the tiles, air can circulate owing to the data center's structure. Data volumes have also increased with a large increase in internet usage, sophisticated software development & installation methods, and a rise in the number of equipment connected to both public and private networks.

In essence, a facility's design, planning, and building are all included in the construction process. IT infrastructure, several ancillary expenditures, power distribution, and cooling solutions are all included in the data center construction. The demand for data center building is expanding due to rising data consumption and industry demand for cloud computing.

Continual investments in building hyperscale structures, which house cooling equipment, IT infrastructure, and power products, are also predicted to occur in the market. The industry for data center building is expected to increase as public cloud providers like Facebook, Google, and Amazon continue to spend on modernizing their current infrastructure.

COVID-19 Impact Analysis

The COVID-19 pandemic negatively impacted the market for data center building. However, the COVID-19 outbreak came when demand for data center capacity was rising quickly, which stopped the development of new facilities. In addition, the market had a specific effect, such as increased data network traffic due to more people using programs like Microsoft Office and Zoom. A data center's construction was further complicated by the pandemic's supply chain interruption, which hindered the market's expansion. The need for data capacity has almost tripled since the pandemic, and many businesses are moving toward hybrid cloud infrastructure. As a result, the market has witnessed a rise in data center construction.

Market Growth Factors

Increasing number of connected IoT devices

The Internet of Things (IoT) is a setting in which various electronic gadgets, including computers, electric meters, televisions, air conditioners, and mobile phones, are connected to computers and networks. Due to minimal human involvement, gadgets can now consume, exchange, and generate data. One element anticipated to propel the data center construction market is IoT device creation and rising use. Data centers have emerged to meet the need to store this data due to the substantial information exchange among devices. Many billions of connected IoT devices contribute to the production of more data and are anticipated to increase the demand for data center construction. Therefore, in the coming years, the expansion of the IoT industry will directly influence the expansion of the data center construction market.

Increasing number of data center expansion projects

The number of data centers being created worldwide has significantly increased due to large investments being made in new expansion and construction by top data center service providers. Real estate, as well as investment firms, are encouraged to purchase data centers by the developed nations' data center industry. Such purchases typically result in expansion plans, which strengthen market growth. With unanticipated demand from both existing as well as new clients in data centers, the majority of expenditures will be concentrated on the expansion of the edge data center sector. Hence, the increasing number of data center projects worldwide and the improved battery technology are propelling the market's growth.

Market Restraining Factors

Limitations of data center services and providers

The effects on the environment are extensive, affecting biodiversity, climate change, pollution, and natural resources. Despite the complexity of the problems, there are several chances for growth and long-lasting beneficial effects. Small and medium-sized businesses might not establish a new data center because of the high expense of building one. The vendor's attention is directed at areas with lower construction prices. Therefore, these limitations may restrict the growth of the data center construction market in the coming years.

Type Outlook

On the basis of type, the data center construction market is divided into IT infrastructure, electrical infrastructure, and miscellaneous expenses & others. The miscellaneous expenses and others segment witnessed a substantial revenue share in the data center construction market in 2021. The costs of the security infrastructure, the property, the building, and the shell construction, among other charges, are included in other expenses. Physical and digital security of the data center is included in the security expenditures. The increasing frequency of cybercrime and data breaches drives service providers to invest aggressively in highly advanced security solutions.

Data Center Construction Market Share and Industry Analysis Report 2021

Tier Type Outlook

Based on tier type, the data center construction market is segmented into tier 2, tier 3, and others. The others segment garnered a remarkable growth rate in the data center construction market in 2021. The other segment consists of tier 1 and tier 4. Tier 1 infrastructure has enough power and cooling to handle IT demand. These facilities have only one path for electricity and cooling, and no important systems are redundant. Additionally, tier 4 is essentially a data center with every component redundant and entirely fault-tolerant.

End-Use Outlook

On the basis of end-use, the data center construction market is divided into IT & telecom, BFSI, government & defense, healthcare, energy, and others. The IT and telecom segment procured the highest revenue share in the data center construction market in 2021. The segment is expanding as a consequence of the spread of smartphones as well as the increase in the number of people using the internet activity around the world. In addition, the segment led due to the rollout of 5G networks, and the trend is anticipated to persist during the forecast period.

Data Center Construction Market Report Coverage
Report Attribute Details
Market size value in 2021 USD 185.7 Billion
Market size forecast in 2028 USD 305.3 Billion
Base Year 2021
Historical Period 2018 to 2020
Forecast Period 2022 to 2028
Revenue Growth Rate CAGR of 7.5% from 2022 to 2028
Number of Pages 334
Number of Table 554
Report coverage Market Trends, Revenue Estimation and Forecast, Segmentation Analysis, Regional and Country Breakdown, Competitive Landscape, Companies Strategic Developments, Company Profiling
Segments covered Tier Type, End-Use, Type, Region
Country scope US, Canada, Mexico, Germany, UK, France, Russia, Spain, Italy, China, Japan, India, South Korea, Singapore, Malaysia, Brazil, Argentina, UAE, Saudi Arabia, South Africa, Nigeria
Growth Drivers
  • Increasing number of connected IoT devices
  • Increasing number of data center expansion projects
  • Limitations of data center services and providers

Regional Outlook

Region wise, the data center construction market is analyzed across North America, Europe, Asia Pacific, and LAMEA. The North America region witnessed the largest revenue share in the data center construction market in 2021. Strong investment in data center construction projects has contributed to North America's high revenue share. Since the US has a developed economy, it already has a well-established, high-tech network infrastructure. In addition, major cloud service companies, including Amazon, Google, and Facebook, are also based there. Such businesses are investing in building mega facilities to increase their processing power and data storage. As a result, the market for data center construction has fresh growth prospects.

Free Valuable Insights: Global Data Center Construction Market size to reach USD 305.3 Billion by 2028

KBV Cardinal Matrix - Data Center Construction Market Competition Analysis

Data Center Construction Market - Competitive Landscape and Trends by Forecast 2028

The major strategies followed by the market participants are Partnerships. Based on the Analysis presented in the Cardinal matrix; Cisco Systems, Inc. and Huawei Technologies Co., Ltd. are the forerunners in the Data Center Construction Market. Companies such as Schneider Electric SE, ABB Group and Oracle Corporation are some of the key innovators in Data Center Construction Market.

The market research report covers the analysis of key stake holders of the market. Key companies profiled in the report include Hewlett-Packard enterprise Company (HP Development Company L.P.), IBM Corporation, ABB Ltd., Schneider Electric SE, Oracle Corporation, Cisco Systems, Inc., Vertiv Holdings Co., Huawei Technologies Co., Ltd. (Huawei Investment & Holding Co., Ltd.), Fujitsu Limited and Equinix, Inc.

Strategies deployed in Data Center Construction Market

» Partnerships, Collaborations and Agreements:

  • Mar-2023: Equinix expanded its collaboration with Colt, a provider of the global network and voice services. With this collaboration, Enterprise would have access to Colt’s On Demand infrastructure interconnecting with Equinix Fabric™ across Spain, Italy, and Sweden, also in the Netherlands, Singapore, the UK, Germany, France, and Hong Kong. Additionally, this collaboration would aim to meet the rising demand across key regions.
  • Jan-2023: Schneider Electric announced an expanded partnership with Tech Data, a distributor of technology products, solutions, and services. Following this partnership, Schneider Electric would make value-added sustainable data solutions highly accessible to enterprises and contributes to appreciable efforts in greening the complete value chain.
  • Aug-2022: ABB signed an agreement with ATS Global, a provider of independent solutions for Smart Digital Transformation. This partnership aims to broaden the reach of the ABB Ability Data Center Automation business. This agreement would grow through a network of channel partners.
  • Aug-2022: IBM teamed up with Vmware, a cloud computing and virtualization technology. This partnership would support enterprises in regulated sectors including healthcare and the public sector and financial services.
  • Jun-2022: Oracle announced a partnership with Vodafone, the European and African technology Communications Company. This partnership would advance the operator's European IT infrastructure and boost its transformation to the cloud. Additionally, Vodafone would modernize and move a large number of its systems to OCI dedicated region, a completely managed cloud region
  • Jun-2022: Oracle partnered with Kyndryl, a provider of IT infrastructure services. The partnership would help customers boost their journey to the cloud by offering managed cloud solutions to businesses across the world. The key area of focus would be Network and Edge computing capabilities that leverage Oracle's data center presence using kyndryl managed services and Oracle's Roving Edge Infrastructure.
  • Mar-2022: Vertiv entered into a partnership with Elea Digital, a data center infrastructure platform. Following this partnership, Elea would provide edge data center services across Brazil. In addition, Vertiv would offer maintenance and operation services for Elea Digital data centers in major metro areas including Curitiba, Brasilia, and Porto Alegre.
  • Feb-2022: IBM partnered with SAP, a software technology company. Following this acquisition, IBM aims to deliver technology and consulting specialization to make it simple for clients to embrace a hybrid cloud approach and move critical workloads from SAP solutions to the cloud for non-regulated and regulated industries. Moreover, moving to SAP S/4HANA on IBM Cloud from on-premise data centers can provide various benefits.
  • Feb-2022: Hewlett Packard Enterprise collaborated with Ayar Labs, a leader in chip-to-chip optical connectivity. Following this collaboration, both companies would innovate data centers by developing silicon photo
  • Jan-2022: Huawei announced a partnership with Hatten Land, the property development arm of the Hatten Group. Under this partnership, both companies would develop data centers and other digital infrastructure in the country.
  • Aug-2021: ABB Group joined hands with ST Telemedia Global Data centers, the fastest-growing global data center operator. Under this collaboration, the companies aimed to conduct an Artificial Intelligence energy optimization pilot across Singapore to leverage Machine Learning and AI technology along with advanced analytics to optimize energy use within a data center.
  • Jul-2021: Hewlett Packard Enterprise signed an agreement with HanmiGlobal, a construction project management organization. Under this agreement, Hewlett Packard Enterprise would deliver the technology and consultations needed to create the centers and HanmiGlobal would offer project management services.
  • May-2021: Huawei came into an agreement with Moro Hub, a subsidiary of Digital DEWA. With this agreement, the companies aimed to construct the biggest solar-powered Uptime TIER III-Certified Data Centre across the Middle East and Africa at the Mohammed bin Rashid Al Maktoum Solar Park.

» Product Launches and Product Expansions:

  • Feb-2023: Vertiv unveiled the Vertiv™ MegaMod™ and Vertiv™ MegaMod™ Plus, a turnkey prefabricated modular (PFM) data center solution. The products are combined and tested with thermal management solutions, IT equipment racks, Vertiv™ power management systems, and remote monitoring. Moreover, the solution capacity is standardized for medium size data centers and can be simply broadened and deployed as the business needs to grow.
  • Sep-2022: Schneider Electric rolled out Easy Modular "all-in-one" data centers, a standardized and pre-tested mobile container data center solution. The latest solution fulfills the demand of countries in need of ready-made, modular solutions that could offer cost predictability, and fulfill strict deadlines and productivity.
  • Dec-2021: Schneider introduced enhancements in its data center and digital transformation capacity. With this product expansion, the company aimed to fulfill the increasing domestic demand of its customers for increased digitization and automation capabilities to enhance and futureproof the security of their operations.
  • Oct-2021: Schneider launched Easy Micro Data Center Series, a Micro Data Center solutions range for standard IT and commercial environments. The new product range is developed to comprise and deliver all computing, storage, and necessary infrastructure to support edge computing applications, reliability, combining speed, and affordability.
  • Sep-2021: Vertiv rolled out the Liebert RXA remote power panel and Liebert MBX busway system. The new Liebert RXA is a safe and flexible solution for high-density power applications, while the new Liebert MBX enables reliable overhead power distribution across data centers of multiple sizes.
  • Jun-2021: Schneider introduced EcoStruxure Modular Data Center, a liquid-cooled all-in-one module. The new solution aimed to enable the most GPU and CPU-intensive high-performance computing edge applications to be installed with more reliability in a rough and remote environment.
  • Mar-2021: Vertiv unveiled Vertiv Liebert EXM2, an advanced UPS design. The new product aimed to provide industry-leading reliability, efficiency, and performance with power capacities spanning from 100 to 250 kVA and a flexible and compact footprint. In addition, the new product is developed for a broad range of applications and is currently available across Australia & New Zealand, and Southeast Asia.
  • Mar-2021: Huawei introduced FusionModule500, FusionModule800, and FusionModule2000, advanced Data Center and Power Supply Solutions. The new solutions are developed to meet distinct industrial requirements. Moreover, these solutions would also enable enterprises to turn any room into a data center.

» Acquisitions and Mergers :

  • an-2023: Schneider Electric completed the acquisition of Aveva, Britain's technology company. Through this acquisition, Schneider Electric would improve the potential advantages for customers and meet the demands faster with a stronger offering of solutions.
  • Nov-2021: Vertiv took over E&I Engineering Ireland and its affiliate, Powerbar Gulf. With this acquisition, the company aimed to integrate the robust capabilities of the E&I team into its portfolio. Moreover, the companies would also amplify their integrated ability to bring value to employees, customers, and shareholders.
  • Sep-2021: Equinix, Inc. completed the acquisition of GPX Global Systems, Inc., a provider of a secure, neutral environment within each GPX facility. Through this acquisition, Equinix would broaden into India and unlock opportunities for Indian companies expanding globally, as well as for multinational corporations pursuing innovation and growth in the Indian Market.

» Geographical Expansions:

  • Oct-2022: Equinix expanded its geographical footprint in Indonesia. Following this Expansion, Equinix would allow Indonesian enterprises, as well as global players with a presence in Indonesia, to leverage its platform to bring together and connect the basic infrastructure to power their business.
  • Mar-2021: Cisco expanded its geographical footprint in Germany with the introduction of a new data center in Frankfurt. This geographical footprint aimed to allow the company to better serve its customers by leveraging its Collaboration platform Webex across the European Union, Europe, the Middle East, Africa, and Russia.

Scope of the Study

Market Segments Covered in the Report:

By Tier Type

  • Tier 3
  • Tier 2
  • Others

By End-Use

  • IT & Telecom
  • BFSI
  • Healthcare
  • Government & Defense
  • Energy
  • Others

By Type

  • IT Infrastructure
    • Server
    • Networking Equipment
    • Storage
  • Electrical Infrastructure
    • Cooling
    • Power Distribution
  • Miscellaneous Expenses & Others

By Geography

  • North America
    • US
    • Canada
    • Mexico
    • Rest of North America
  • Europe
    • Germany
    • UK
    • France
    • Russia
    • Spain
    • Italy
    • Rest of Europe
  • Asia Pacific
    • China
    • Japan
    • India
    • South Korea
    • Singapore
    • Malaysia
    • Rest of Asia Pacific
    • Brazil
    • Argentina
    • UAE
    • Saudi Arabia
    • South Africa
    • Nigeria
    • Rest of LAMEA

Key Market Players

List of Companies Profiled in the Report:

  • Hewlett-Packard enterprise Company (HP Development Company L.P.)
  • IBM Corporation
  • ABB Ltd.
  • Schneider Electric SE
  • Oracle Corporation
  • Cisco Systems, Inc.
  • Vertiv Holdings Co.
  • Huawei Technologies Co., Ltd. (Huawei Investment & Holding Co., Ltd.)
  • Fujitsu Limited
  • Equinix, Inc.
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Frequently Asked Questions About This Report

The global Data Center Construction Market size is expected to reach $305.3 billion by 2028.

Increasing number of data center expansion projects are driving the market in coming years, however, Limitations of data center services and providers restraints the growth of the market.

Hewlett-Packard enterprise Company (HP Development Company L.P.), IBM Corporation, ABB Ltd., Schneider Electric SE, Oracle Corporation, Cisco Systems, Inc., Vertiv Holdings Co., Huawei Technologies Co., Ltd. (Huawei Investment & Holding Co., Ltd.), Fujitsu Limited and Equinix, Inc.

The Tier 3 segment acquired maximum revenue share in the Global Data Center Construction Market by Tier Type in 2021 thereby, achieving a market value of $154.2 billion by 2028.

The IT Infrastructure segment is leading the Global Data Center Construction Market by Type in 2021 thereby, achieving a market value of $172.1 billion by 2028.

The North America market dominated the Global Data Center Construction Market by Region in 2021, and would continue to be a dominant market till 2028; thereby, achieving a market value of $112 billion by 2028.



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