ID: MRFR/ICT/4353-CR | February 2020 | Region: Global | 122 pages
Market Research Future (MRFR) predicts the Data Center Construction Market size to expand at a CAGR of 9.04% from 2018 to 2023 (forecast period). The large volume of data consumed on a daily basis, combined with the rapid emergence of data center facilities, is expected to increase market demand over the forecast period. The sharp rise in the rate of adoption of IoT devices can have a positive effect on market growth. Demand for energy-efficient data centers is expected to open up growth opportunities for the market in the coming years. This, in turn, is expected to push the purchase of low-heat building materials. The adoption of green strategies, like the reuse of waste and evaporative cooling, is likely to support this trend.
The COVID-19 pandemic occurred at a time when demand for data center capacity is rapidly expanding, and restrictions on the construction of new facilities have been applied. There is a certain effect on the industry, as data network traffic has gained increased traffic by increasing the use of applications such as Zoom, Microsoft Office, etc. However, according to the trend force, 3.2 million server unit shipments were recorded in Q2 2020. In addition, the pandemic created difficulties in the development of a data center due to disruptions in the supply chain, which will slow down market growth.
Significant increase in the volume of data generation
The rising penetration of connected devices and easy access to the internet, combined with declining internet service prices, has resulted in a growing demand for data storage worldwide. This is due to the growing demand for big data analytics and cloud-based services, like online content, including movies, apps, videos, and social media. As per Cisco Systems, the proportion of data center traffic generated by the cloud added up to about 1.2 zettabytes of data, and this comprised 46% of total traffic. In addition, the company estimated the data center traffic to rise to 69% or 5.3 zettabytes of all data traffic in 2017. This has resulted in cloud-based companies deploying more IT space in their data centers. Several industries are exploring cloud offerings and finding the benefits of data center services to meet their cloud-related needs. These advances are directly influencing the growth in the Internet of Things (IoT) and the data needs of companies, resulting in the construction of a large number of data centers across the globe. As a result, the increasing volume of internet data generation is expected to fuel demand for their storage and is expected to generate a range of lucrative opportunities for data center construction market players in the coming years.
Global Data Center Construction Market has been segmented into design Type, Tier Type, and Verticals.
By design type, the global data center construction market has been segmented into electrical construction and mechanical construction.
By tier type, the global data center construction market has been segmented into Tier 1, Tier 2, Tier 3, and Tier 4.
By verticals, the global data center construction market has been segmented into BFSI, IT & Telecommunication, Media & Entertainment, Oil & Energy, and Public Sector.
North America to lead the global market
North America dominated the data center construction market, accounting for the largest revenue share of more than 40.0% in 2019, followed by the Asia Pacific. North America's high revenue share can be attributed to aggressive investment in hyperscale projects. The U.S. is a developed economy and already boasts a well-established, advanced network infrastructure. It is also home to major cloud service providers, including Amazon.com, Google, Inc., and Facebook. These companies are investing in the development of mega facilities for additional data storage and processing capabilities, thereby opening up opportunities for business growth.
The global data center construction industry is a highly competitive market that is affected by a variety of factors, such as the rising number of IoT devices, increasing data traffic, and environmental regulations. The growth of market vendors depends on market conditions, government support, and the development of the industry. Significant players in the industry compete in terms of design construction type, availability of raw materials, and price of data center components. In particular, these companies concentrate on data centers and electrical construction. Many small and large industry participants occupy the data center construction market. Global players are expected to enhance their global presence through organic and inorganic growth during the forecast period.
Vendors with better technological and financial resources can develop new products that can give them a competitive advantage in the market. Vendors also need to develop new technologies and keep abreast with emerging technologies that could impact the continued competitiveness of their product lines in the market.
In August 2020, Arup was awarded for a sustainable summit empowering supplier to build a sustainable supply chain. The awards also include the development of a Carbon Management Plan for the event and coordinating with main suppliers to build a sustainable supply chain. Award recognition will boost the company's global revenues and increase profits.
This report forecasts revenue growth at global, regional, and national levels and provides insight into the new updates in each of the sub-sectors from 2018 to 2023. For the purpose of this study, MRFR divided the global data center construction market report by design type, tier type, vertical, and region.
By Design Type
By Tier Type
Frequently Asked Questions (FAQ) :
North America, Europe, Asia Pacific (APAC), and the Rest-of-the-World (RoW) are key regions topping in the regional analysis of the market.
Design type, Tier type, and verticals are the segments of the market.
age Southerland Page (U.S.), Gensler (U.S.), Syska Hennessy Group (U.S.) are the top 3 companies investing in the market.
2018 to 2023 is the growth period of the market.
The market will be growing at 9.04% CAGR in the forecast period.
Data Center Construction Market – Summary
Industries entering 4.0 is a consequence of the evolution of industry internet of things (IIoT) which has given rise to the incorporation of data centers that hold sway over the big data with aptly backed technologies. As the market is imbibing these latest technologies for daily operations, profit margins have started showing impressive results giving data an unprecedented advantage. And the most requisite thing for these data is a safe harboring, that can protect data from any outside force, all the while, maintaining the constant workflow of the organization. These data centers host multiple facilities that include computer systems and associated components such as storage devices and effective telecommunication equipment, along with, power supply and backup, ambiance controlling devices, fire suppression, and other security devices to assist a seamless flow of transmission. These factors entail data center construction which in the coming years can gain considerable momentum as suggested by Market Research Future (MRFR) in their report. With an outstanding 9% CAGR, data construction center sector can envision a market valuation of USD 31.91 billion during the forecast period (2018-2023).
Drivers and Restraints:
The percolation of the internet of things (IoT) into daily lives via gadgets such as mobile, computers, electric meters, television and other gadgets is generating a massive amount of data that requires storage. The IoT is using a web of various resources such as computing economics, data analytics, rising utilization of cloud computing, IP- Based networking and others that need a proper flow of data owing to which a rise in the data center construction market can be expected.
The data center construction market is also experiencing considerable boost from data center facilities founded by companies such as Google, Amazon, Microsoft, and Facebook. The increase can be attributed to cloud-computing which has gained remarkable precedence in the past few years, and its evolution safeguards the prospect of the market.
However, the initial cost is pretty high that can put a rein on the market. The construction of the site includes labor cost, site acquisition, power cost, net taxes, construction cost, machinery cost, equipment cost, and labor availability that can put a huge tab on the leger. Incurring such a substantial cost at the beginning of the project or as an addition in the midway prohibiting many companies from implementing such a plan.
Based on design type, the market is segmented into electrical construction and mechanical construction. Electrical segment is the leading and the fastest growing one with an estimated market value of USD 16.99 billion during the forecast period.
By tier type, the market is sub-segmented into tier1, tier2, tier3, and tier4. Tier 4 has the edge over others and is expecting the highest CAGR in the coming years as well. A CAGR of 10.4% can ensure its position in the segment during the forecast period.
Vertical-wise segmentation includes BFSI, healthcare, IT & telecommunication, media & entertainment, oil and energy, and public sector. IT & telecommunication to lead the market from the front with an estimated CAGR of 10.8% during the forecast period.
Geographically, the market enwraps regions such as North America, Europe, Asia Pacific (APAC), and the Rest-of-the-World (RoW).
North America, with an ever-lingering hawk eye on upcoming technologies and an insatiable thirst for implementing latest technologies, have created a market that depends much on security, data storage, and quick operation. This has ensured data center construction market’s expansion in the U.S. and Canada owing to which the region can witness a scaling of market valuation with a CAGR of 7.5% during the forecast period.
Europe’s market dominance can be attributed to the robust presence of IT and Telecommunication. Germany leads the region and is anticipated to grow with a CAGR of 7.5% during the review period. The region can take over North America’ supremacy by 2023.
The APAC region, registering the fastest growth, can be attributed to its voluminous population which is generating demand for telecommunication application, and IT & software industries. China is the frontrunner and is projected to grow with a CAGR of 11.8% during the same period.
Rising eco-concerns have created an inclination in many companies to adopt a greener variation of the same data center buildings. This trend can add a different dimension to the market where the power sources will be used to their fullest potential, and the adoption can reduce the cost involved in the process considerably. The effort will include every aspect of the sites and attempt to minimalize carbon footprint.
Prominent players of data center construction market research study include AECOM (US), Gensler (US), HDR Architecture (US), Corgan Associates Inc. (US), Arup Group (UK), DPR Construction (US), Holder Construction Group (US), Jones Engineering Group (US), Page Southerland Page (US), Structure Tone (US), and others.
Global Data Center Construction Market: Competitive Landscape
The global market for data center construction is a highly competitive market which is influenced by a number of factors such as the growing number of IoT devices, increasing data traffic, and environmental regulations. The growth of the market vendors is dependent on the market conditions, government support, and industry development. AECOM, Arup Group, Fluor Corporation, Gensler, Corgan Associates, HDR Architecture, Page Southerland Page, Inc., Holder Construction Group, Jones Engineering Group, Structure Tone, Syska Hennessy Group, and Turner Construction Company are major active players in the market that compete in terms of design construction type, availability of raw materials, and price of data center components. These companies primarily focus on data center and electrical construction. Many small and large market players occupy the market for data center construction. The global players are expected to strengthen their presence worldwide through organic and inorganic growth during the forecast period.
The vendors with better technical and financial resources can develop innovative products that can give a competitive edge to them in the market. Vendors also have to develop new technologies and stay abreast of emerging technologies that could affect the continuing competitiveness of their product lines in the market.
AECOM is a global provider of professional technical and management support services to a broad range of markets, including transportation, facilities, environmental, energy, water, and government. AECOM engages in the design, build, finance, and operation of infrastructure assets for governments, businesses, and organizations alike. The company operates through the following segments: design and consulting services, construction services, management services and AECOM Capital. AECOM serves clients in more than 130 countries and provides a blend of global reach, local knowledge, innovation and technical excellence in delivering solutions that create, enhance and sustain the world’s built, natural, and social environments. AECOM continues to successfully execute on its strategy for profitable growth, balanced capital allocation, and disciplined financial management. The company is focused on providing full suite of infrastructure services across the lifecycle of clients’ projects. This means delivering design, build, and finance and operate (DBFO) capabilities to both public and private-sector clients all over the world. The company’s strategic priorities include integrated solutions, geographical expansion, technology and innovation, operational excellence, and engaged & enabled workforce. The company has created an integrated delivery platform with superior capabilities to design, build, finance and operate infrastructure assets around the world. By integrating and providing a broad range of services, they deliver maximum value to the clients at competitive costs.
Arup Group Limited provides structural engineering consultancy services in the United Kingdom and internationally. The company offers building design, economics and planning, infrastructure design, management consulting, and specialist technical services. It serves customers in arts and culture, aviation, commercial property, education, energy, government, healthcare, highways, hotels and leisure, maritime, mining, rail, residential, resources and waste, retail, science and industry, sports, and water markets. The company has delivered its projects across 119 countries and has its presence in Europe, Australia, the Americas, East Asia, and the Middle East, the UK and Africa. The company caters to various markets such as government, science and industry, mining, highways, retail, water, hotels and leisure, education, aviation, maritime, residential, rail, arts and culture, science and industry and others. The company specializes in structural engineering, carbon management, building design, sustainability consulting, infrastructure, civil engineering, management consulting, project management, planning, ITC, transaction advice, acoustics, technical services, lighting, MEP, Facades, BIM, fire, energy, and transport.
Corgan is a leading architecture and design firm with a human-centered approach, a deep technical experience and a reputation for great service to our clients, our people and our communities. The company provides design services for various end-markets including aviation, hospitality, education, healthcare, interior, critical facility, public, and residential projects. The company specializes in aviation, commercial, critical facilities, education, healthcare and interior design projects. Corgan offers a broad range of data center related solutions globally. It has completed many projects throughout the world, such as the China Construction Bank Data Center, Cisco TXDC2, Cloudsite China Data Center, Cyrusone, Project Bluegrass Data Center, Project Lonestar Data Center, Project Noble Data Center, Sentinel NJ1 Data Center, Social Security Administration Data Center, and the T5 Data Center. The company focuses on organic growth strategy by developing their expertise in aviation, critical facilities, education, commercial and other design projects. The company also works on improving their internal business functions to have better connectivity with their clients.
The companies in the market for data center construction are leveraging various levels of innovation and research to stay ahead in the market and gain a profitable share.