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Data Center Construction Market Size Predicted to Increase at a Positive CAGR Of 8.34% from 2022 to 2031

The data center construction market was valued at USD 20.11 billion in the year 2019 and is anticipated to reach a value of USD 32.50 billion by 2025, registering a CAGR of 8.34% during the forecast period of 2022–2031. The development of advanced technologies such as the internet of things, software-defined data centers, and disaster recovery fueled the demand for the construction of data centers globally. Further, a new design of data center construction should be based on customer needs, business requirements, be scalable, manageable, optimized spaces, standardized (i.e., TIA, BICSI, Uptime Institute, EN 50600, CISCA, LEED, ANSI/ASHRAE Standard 90.4-2016), secure, modular, flexible and efficient.

– Growing demand for cloud applications is driving the market as increasing the utilization of cloud storage is fueling the demand, and according to Oracle’s Cloud Prediction 2019, approx 80% of all enterprise (and mission-critical) workloads will move to the cloud. As the definite number of files stored in the cloud has increased in a rapid state, the percentage of files that contain sensitive data has also grown, today standing at 21% with an increase of 17% over the past two years.

– Further, the adoption of a software-defined data center in healthcare drives the market. Medical expenditure is increasing every year, and the cost of optimization from the customer perspective is also in focus. According to the Institute for Health Metrics and Evaluation, by 2040, healthcare spending is expected to increase to about USD 18.28 trillion, with high-income countries expected to spend around USD 9,019 per person in 2040. Whilst the healthcare organizations are in the nascent stage to adopt modern changes to IT infrastructure, the adoption of a software-defined data center in the healthcare institutes will streamline data management, unify networking, and server storage with better agility. ​

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– Furthermore, the state and local municipalities of the North America region are competing to construct more number of data centers to their markets. For instance, Texas has passed tax incentive legislation providing complete relief of sales taxes on business property. This factor is vital for data center operation in the next 10 to 15 years for large data center users.

– Further, the Covid-19 pandemic has struck at a time when demand for data center capacity is expanding rapidly and has applied restrictions to the construction of new facilities. There is a certain impact on the market, such as data network traffic has gained increased traffic by increasing usage of applications such as Zoom, Microsoft Office, others. However, according to trend force, Q2 2020 has witnessed 3.2 million of server unit shipments. Moreover, the pandemic has caused challenges for the construction of a data center due to disruption in the supply chain, which will slow down the market growth. ​

– The data center sector needs to modify its building practices to continue to deliver new projects under this pandemic. Further, under the restrictions put in place during the pandemic, data center construction has continued, such as AWS has opened a region in South Africa, and Digital Realty’s Interxion has announced plans for a campus in Paris.

Key Market Trends

Growing Adoption of Hyperscale Data Centers in Large Enterprises is Driving the Market Growth

– The hyperscale data centers are used in different sectors to increase computing ability, memory, networking infrastructure, along with storage resources. The various features of the hyperscale data centers include the physical infrastructure and distribution systems supporting the data centers for maximizing cooling efficiency, along with the ability to broadly scale computing tasks in an efficient way.

– Various cloud-based companies, such as Google and Facebook, are focused on investing in supercomputers accommodating their hyperscale needs. For instance, by mid-2020, Facebook is expecting the construction of its fifth hyperscale facility, an H-shaped building with 2.5 million sq. Ft area. Furthermore, in February 2019, India’s prominent data center player, CtrlS, announced its investment of INR 2000 crore in setting up the hyperscale infrastructure, which is claimed to be the world’s largest Hyperscale Tier-4 data center facility.

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– Moreover, the business of selling data center hardware designed to Open Compute Project specifications is booming. Advanced cooling solution for fast-growing power consumption and computing density in next-generation data centers with no changes in the extra facility is significantly contributing to the market growth with OCP.

– For instance, in May 2020, Wiwynn announced to showcase its cutting-edge standalone rack-level liquid cooling solution with the next-generation Open Compute Project (OCP) server to address the growing demand of high-power consumption and compute density for cloud computing, AI and HPC, during the OCP Virtual Summit 2020.

– Furthermore, the demand for more computing power in the Latin American developing region simply contributes to market growth. For instance, in April 2020, Digital Colony Management, LLC has announced its establishment of the Scala Data Centers S/A (hyperscale data center platform) in Brazil through the acquisition of assets from UOL Diveo. UOL Diveo will continue in providing infrastructure services through Scala along with its managed services, Multicloud, Security, Software Development, and Digital Solutions through its services company Compasso UOL.

– In addition, in Thailand, ST Telemedia Global Data Center (STT GDC) announced the construction of its hyperscale data center facility consisting of two seven-story buildings within a data center campus where each building will support an IT load of 20MW, with the construction taking place in two phases. This increased rate of construction of the hyperscale data centers is expected to significantly drive the market growth.

North America Accounts To Hold a Major Share

– Over a while, the United States has been recognized as one of the fore-runners in the adoption of new technologies. With increasing adoption in Big Data analytics, the companies in the region, in order to avoid falling short on traditional storage, have begun the construction of new data centers along with colocation centers to run their business analytics activities.

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