Data Center Construction Market Size

Data Center Construction Market Analysis

The Data Center Construction Market size is expected to grow from USD 259.97 billion in 2023 to USD 348.23 billion by 2028, registering a CAGR of 6.02% during the forecast period (2023-2028).

• Enterprises must rely on data centers to fulfill their IT requirements as on-demand services become increasingly prevalent. Data centers have changed tremendously due to increasing organizational demands for data management, backup and recovery, and productivity tools like email. An increasing number of data centers that serve enterprise applications and offer data storage, administration, backup, and recovery services are also driving the data centers market.
• Hyper-scale data centers are being built more often worldwide to store massive volumes of data, opening up lucrative opportunities for business players. Many industries use hyper-scale data centers to increase computing power, memory, networking capabilities, and storage resources. The ability to effectively scale up computer workloads at a large scale and the physical infrastructure and distribution systems supporting the data centers are two of the many components of hyper-scale data centers.
• Moreover, According to Flexera State of the Cloud Report 2023, 72% of companies' respondents stated they had deployed a hybrid cloud in their business. Migrating to hybrid cloud solutions often comes at the expense of operating private and public clouds.
• The need for data centers has increased in recent years due to the high adoption of cloud services and the several government initiatives taken to promote the digital economy. In April 2022, Seagate Technology Holdings PLC and Phison Electronics Corporation expanded their solid-state drive portfolio to assist data management centers in reducing their total cost ownership. This new focus comes from a growing demand of businesses for higher-density and faster, more intelligent storage infrastructure to facilitate comprehensive business applications, such as hyperscale data centers, high-performance computing, and AI.
• Environmental, cost and workforce-related challenges could restrain the global data center construction market. The environmental impacts are wide-reaching, impacting climate change, pollution, biodiversity, and natural resources. Though the challenges are broad, they present many opportunities for improvement and long-lasting positive impact. The cost of constructing the data center is also high, which could restrain small and medium enterprises from setting up a new center. The vendor's focus is on the regions that have lower costs for construction.
• Furthermore, the COVID-19 pandemic struck when demand for data center capacity expanded rapidly, and it applied restrictions to constructing new facilities. There was a specific impact on the market, such as data network traffic increased the traffic by increasing usage of applications such as Zoom and Microsoft Office, among others. Moreover, the pandemic caused challenges in constructing a data center due to disruption in the supply chain, which slowed down the market's growth. However, post-pandemic, the demand for data capacity has more than tripled, and companies are shifting toward a hybrid cloud environment. Hence, the market has seen a resurgence in data center construction.