Data Center Construction Market - By Data Center Type (Small, Medium, Large), By Infrastructure (Electrical, Mechanical, Networking), By End use (BFSI, Energy, Government, Healthcare, IT & Telecommunication, Manufacturing), Forecast 2024 – 2032

Data Center Construction Market Size

Data Center Construction Market was valued at USD 212.7 billion in 2023 and is estimated to register a CAGR of over 6% between 2024 & 2032. This growth is driven by the expanding initiatives from leading companies to bolster their data center infrastructure. With the increasing reliance on digital services and the proliferation of cloud computing, companies are prioritizing the expansion and enhancement of their data center capabilities. For instance, in April 2024, Microsoft was reportedly increasing its investment in data centers and had over 5 gigawatts (GW) of capacity at its disposal. The tech giant acquired more than 500 megawatts (MW) of additional data center space since July 2023.
 

Leading firms are investing significantly in building new data centers or upgrading existing ones to meet the growing demand for storage, processing power, and connectivity. This expansion is fueled by the need for greater scalability, reliability, and efficiency in managing vast amounts of data. As a result, the market is experiencing robust growth as companies recognize the strategic importance of a robust and resilient data infrastructure in today's digital economy.
 

The data center construction market is experiencing a surge in demand due to rising building projects from leading companies expanding their regional reach. As companies strive to expand their operations into new regions, the need for robust data infrastructure follows suit. Leading firms are investing heavily in constructing new data centers or expanding existing ones to support their growing operations and customer base. This expansion is driven by the increasing demand for digital services and the adoption of cloud computing technologies. With data becoming the backbone of modern business operations, companies recognize the importance of reliable and scalable data center infrastructure. Consequently, the data center construction industry is witnessing significant growth as companies prioritize expanding their regional reach and strengthening their digital capabilities. For instance, in February 2024, CtrlS Datacenters, an Indian operator, was constructing a new data center campus in Chennai. The company revealed its plan to invest Rs 4000 crore ($482.5 million) in the 72MW project, which is already under construction.
 

The explosion of data generated by various sources such as social media, mobile devices, and IoT devices is driving the need for more data center capacity. As the volume of data grows exponentially, companies require larger and more efficient data centers to store and process this data. Data centers play a crucial role in managing and analyzing the massive amounts of data generated daily, leading to increased demand for construction projects.
 

While the data center construction industry is experiencing significant growth, it also faces several restraints. One major restraint is the high upfront cost associated with building data centers. Constructing a data center requires substantial investment in land, infrastructure, equipment, and skilled labor, making it a capital-intensive endeavor. Additionally, regulatory hurdles and permitting processes can further delay construction projects, increasing costs and affecting time-to-market. Another restraint is the limited availability of suitable locations for data center construction, especially in densely populated urban areas where land is scarce and expensive. Moreover, environmental concerns related to energy consumption and carbon emissions pose challenges for data center operators. Balancing the need for expansion with environmental sustainability remains a key challenge for the market.
 

Data Center Construction Market Trends

The data center construction industry is witnessing significant trends driven by rising investments from leading companies. One prominent trend is the increasing focus on hyperscale data centers, fueled by the exponential growth of data and the demand for cloud services. Leading tech companies like Google, Amazon, and Microsoft are investing heavily in hyperscale data centers to support their expanding cloud infrastructure. Additionally, there's a growing emphasis on energy efficiency and sustainability in data center construction, with companies investing in innovative cooling technologies and renewable energy sources to reduce environmental impact.
 

Moreover, there is a trend towards modular and prefabricated data center construction, allowing for faster deployment and scalability. Overall, these trends reflect the evolving landscape of data center construction driven by the strategic investments of leading companies. To cite an instance, in April 2024, Blackstone, a US equity firm, was planning to acquire the Northumberland Energy Park (NEP3) site to develop a hyperscale data center. The site, located in Cambois, UK, was intended to be purchased by Blackstone on behalf of its data center landlord QTS.
 

Data Center Construction Market Analysis

Based on data center type, the market is divided into small data center, medium data center, and large data center. In 2023, the large data center segment was valued at over USD 90 billion in 2023. The segment is expected to register a commendable CAGR through 2024-2032. As data becomes increasingly pivotal for businesses, large companies are investing heavily in expanding their data center infrastructure. These expansions are motivated by the growing volume of digital data, the demand for cloud services, and the need for high-performance computing. Large data centers are crucial for storing, processing, and managing vast amounts of information, supporting critical operations, and enabling digital innovation. Consequently, the demand for data center construction services continues to grow as companies prioritize the development of robust and scalable data infrastructure to meet their evolving needs.
 

Based on the infrastructure, the market is categorized into electrical infrastructure, mechanical infrastructure, networking infrastructure, and others. The electrical infrastructure segment is anticipated to register a CAGR of over 5% from 2024 to 2032. As data centers continue to grow in size and complexity, the demand for reliable power distribution and management systems is increasing. Electrical infrastructure, including power distribution units, uninterruptible power supplies (UPS), and backup generators, is crucial for ensuring continuous operation and minimizing downtime. With the rise of hyperscale data centers and the adoption of high-density computing technologies, the need for robust electrical infrastructure has become even more pronounced. Consequently, the market is experiencing heightened demand as companies prioritize the development of resilient electrical systems to support their critical operations.
 

North America dominated the global data center construction market with a major share of over 40% in 2023. With North America being a global hub for technology and innovation, there's a consistent need for data center infrastructure to support the digital economy. The region's increasing reliance on cloud computing, IoT, and big data analytics is driving the demand for data centers. Moreover, the expansion of e-commerce, streaming services, and online gaming further boosts the need for robust data infrastructure. Besides, stringent data protection regulations push companies to invest in secure and compliant data center facilities. Overall, North America's dynamic tech landscape ensures sustained demand for data center construction.
 

The data center construction industry in the U.S. is experiencing robust demand driven by various factors. As one of the world's largest economies and a global leader in technology, the U.S. continuously requires advanced data infrastructure. With the proliferation of digital services, cloud computing, and IoT, companies across industries are expanding their data center capabilities. The surge in remote work, online education, and e-commerce further accelerates this demand. Additionally, the U.S. government's focus on cybersecurity and data protection stimulates investments in modern and secure data centers. These factors collectively contribute to the sustained growth and demand for data center construction in the U.S.
 

Data Center Construction Market Share

Amazon Web Services (AWS), Facebook (Meta), and Alibaba Cloud held significant market share of over 7% market share in 2023. These leading companies are focusing on several key strategies to capitalize on the growing demand for digital infrastructure. These strategies include expanding their global footprint by constructing data centers in strategic locations to serve emerging markets and meet increasing demand for cloud services. Additionally, there is a significant emphasis on sustainability, with companies incorporating energy-efficient designs and renewable energy sources to minimize environmental impact and reduce operational costs. Moreover, there is a trend towards modular and prefabricated construction methods to accelerate deployment timelines and enhance scalability.
 

Moreover, data center construction industry is experiencing heightened demand due to focused efforts by companies operating within this sector. As businesses increasingly rely on digital infrastructure, companies are investing significantly in constructing new data centers or expanding existing ones. These efforts are driven by the need for scalable, reliable, and efficient data storage and processing facilities. Additionally, companies are innovating in areas such as energy efficiency and sustainability to meet the demands of a rapidly evolving market, further stimulating growth in data center construction.
 

Data Center Construction Market Companies

Major players operating in the market are:

• Alibaba Cloud
• Amazon Web Services (AWS)
• Apple iCloud
• Baidu Cloud
• Facebook (Meta)
• Google Cloud Platform (GCP)
• IBM Cloud
• Microsoft Azure
• Oracle Cloud Infrastructure (OCI)
• Tencent Cloud
   

Data Center Construction Industry News

• In January 2024, Digital Realty, Brookfield, and Reliance Industries were preparing to inaugurate a new data center in Chennai, India. This launch marked the commencement of the joint venture between the three companies known as Digital Connexion.
   
• In January 2024, The Adani Group revealed intentions to invest $6 billion in data center infrastructure in Maharashtra, India. Under an MoU with the Maharashtra government, the investment will be spread over the next decade, aiming to develop 1 gigawatt (GW) of data center capacity.
   

The data center construction market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue (USD Billion) from 2021 to 2032, for the following segments:

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Market, By Data Center Type

• Small data center
• Medium data center
• Large data center

Market, By Infrastructure

• Electrical infrastructure (Largest Market)
  • UPS
  • Power Distribution Units (PDUs)
  • Backup generators
  • Others
• Mechanical infrastructure
  • Cooling Systems
  • HVAC
    • Computer room air conditioning (CRAC) units
      • Fan arrays
      • Air Flow measurement damper
      • DOAS
    • Precision Air Conditioning (PAC) units
      • Face mounted plenum fan with EC motor
      • MAU
      • ERV
    • Chilled water systems
      • Dampers
      • Condenser Fans
    • Ventilation systems
    • Direct expansion (DX) systems
    • Others
• Racks
• Ductwork
• Raised Flooring
• Others
• Networking infrastructure
• Others

Market, By End Use

• BFSI
• Energy
• Government
• Healthcare
• Manufacturing
• IT & telecom
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • Australia
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific 
• Latin America
  • Brazil
  • Argentina
  • Colombia
  • Chile
  • Rest of Latin America  
• MEA
  • UAE
  • Saudi Arabia
  • South Africa
  • Rest of MEA