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Posted 2023-12-01 13:43:23

Market Overview:

The data center construction market involves building new data center facilities or renovating existing infrastructure of data centers. Data centers are facilities that house computer systems and associated components such as telecommunications and storage systems. They generally include redundant or backup power supplies, redundant data communications connections, environmental controls (e.g., air conditioning, fire suppression) and various security devices. Growing adoption of smart devices such as smartphones, laptops, tablets etc. has increased the demand for data storage which is driving the construction of new data centers or expansion of existing ones.

Market Dynamics:

One of the key drivers for growth of data center construction market is the increasing penetration of smart devices. The proliferation of smart devices such as smartphones, tablets and other connected devices has increased the digital data generated exponentially. For example, according to a report by Cisco, global IP traffic will reach 4.8 Zettabytes per year by 2022, up from 1.5 Zettabytes in 2017. Moreover, 5G networks are further expected to increase mobile data usage. This huge amount of digital data needs to be stored, managed and distributed, which is increasing the need for more robust and efficient data center facilities.

Another driver for the market is growing cloud computing adoption across various industry verticals. Cloud computing is cost-efficient for organizations as it reduces investment in hardware, software, data centers, and related infrastructure. Rising need for enhanced computing power and storage along with cost benefits is propelling organizations to switch to cloud-based applications and services. This is subsequently increasing the need for expansion and up-gradation of data center infrastructure for efficient storage and distribution of cloud-based workloads.

SWOT Analysis

Strength: The data center construction market has high growth potential due to rapid digitalization. Strong demand for advanced data centers from leading technology companies drives revenue growth. Standardized designs and process automation help reduce costs and improve efficiency.

Weakness: High initial investment requirements pose challenges for new entrants. Construction delays and cost overruns can negatively impact profitability.

Opportunity: Growing needs for data storage and low-latency processing across industries boosts opportunities. Emerging technologies like IoT, 5G and edge computing will further fuel market expansion.

Threats: Component shortages can delay projects and increase expenses. Stringent regulatory policies regarding land acquisition and power constraints pose threats.

The global Data Center Construction Market Size is estimated to be valued at US$ 62586.47 Mn in 2023 and is expected to exhibit a CAGR of 7.4% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Key Takeaways:

The global data center construction market is expected to witness high growth, exhibiting CAGR of 7.4% over the forecast period, due to increasing digitization of business processes across industries. Growing reliance on cloud-based applications and services has prompted large-scale investment in data center infrastructure development. The market size is estimated to reach US$ 110894.62 Mn by 2030.

Regional analysis - North America dominated the global market in 2023, accounting for around 35% of the overall shares, owing to heavy investments by leading tech companies such as Meta, Amazon and Microsoft. However, Asia Pacific is projected to exhibit the highest CAGR during the forecast period with countries like China, India and Japan emerging as highly lucrative markets. Improving connectivity infrastructure and supportive government policies are driving the regional market.

Key players operating in the data center construction market are DPR Construction, Inc., Turner Construction Co., Holder Construction Company, Hensel Phelps Construction Co, Balfour Beatty US, Helix Electric, Sudlows, Kraus Anderson Construction, The Beck Group, PCL Construction Enterprises, The Walsh Group, Hill International, and Engineered Structures, Inc. (ESI). Leading players are focusing on sustainable construction, advanced building systems, and turnkey data center solutions to gain a competitive edge.

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