The global data center construction market size was USD 59.7 billion in 2021. It is estimated to reach USD 163.2 billion by 2030, registering a CAGR of 13.47% during 2022-2030. Datacenter construction is a complex task that requires extensive planning of electrical, location, and mechanical requirements. Moreover, the data centers carry out mission tasks. Any imperfection in power management to building design could be catastrophic and increase costs to the companies. According to the Cloud Infrastructure Report 2021, 57% of respondents said more than half of their infrastructure is in the cloud, and 64% believe they will be fully in the public cloud in the next five years.
Like the release of the General Data Protection Regulation (GDPR) act, the regulations around privacy concerns have compelled many vendors to increase data center construction within Europe. This is in line with the storage of confidential and sensitive information of European citizens locally. Furthermore, the impact of edge computing on data center construction is expected to be significant. Such disruption is fueled by a rollout of 5G and would reduce reliance on the construction of 60MW hyper-scale data centers in the future.
Global Data Center Construction Market Definition
Data center construction is the collective set of processes used to construct a data center facility physically. It combines construction standards data center operational environment requirements. Data centers are an essential component of any business, providing data storage, management, backup, recovery, big data, machine learning, productivity applications, and artificial intelligence.
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Global Data Center Construction Market Covid-19 Impact
The COVID-19 pandemic led to disruptions in the supply chain to construct data centers. The lockdowns delayed the completion of projects and caused a decline in demand from severely hit industries such as hospitality, entertainment, and construction activities. According to a recent report by the Uptime Institute on COVID-19 risks, there are supply chain disruptions and the potential for long-term shortages for critical spares and consumables. The data center operators with standardized supply chains uniformed the build processes, prefabricated components, and supplier contracts to withstand temporary disruptions.
Some major developers of wholesale data centers such as Digital Reality and Cyrus One have close relationships with vendors to pre-order equipment like generators and UPS units. They also have inventory to support 8 to 12 months of active development. Such relations help target the supply chain disruptions in the pandemic era.
Dynamics of Global Data Center Construction Market
Drivers: Growing Demand for SMAC (social, mobile, analytics, and cloud) Applications
The growing demand for social, mobile, analytics, and cloud is propelling the demand for data centers across the globe. The usage of social media platforms increased significantly over the past few years, creating the need to store data, ultimately leading to the construction of new data centers. According to the State of Social Media report 2021 by Sprout Social, consumers increased their social media use significantly (27 % ) or slightly (27 % ) compared to one year ago. 91 % of executives anticipate that their company’s social media marketing budget is expected to increase over three years. The majority expect it would increase by more than 50%. 78 % of consumers showed a willingness to buy from one brand, and 77 % would choose a brand over a competitor after a positive experience with that brand on social media. Such factors promote the growth of the data center construction market.
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In addition, with the growth in 5G technology, smart cities, and industrial automation application, the adoption of smart devices is further expected to grow, leading to the generation of new data. Big data is poised to impact data center storage infrastructure. The data centers were designed to store relational data. But currently, data centers are supposed to store different data types (like: structured, unstructured and semi-structured, etc.).