Market Trends of Data Center Construction Industry
Growing Adoption of Hyperscale Data Centers in Large Enterprises is Driving the Market's Growth
- Hyperscale data centers are used in various industries to increase computing ability, memory, networking infrastructure, and storage resources. The features of hyperscale data centers include the physical infrastructure and distribution systems supporting the data centers for maximizing cooling efficiency and the ability to scale computing tasks efficiently and broadly.
- Moreover, selling data center hardware designed to 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's growth with OCP.
- Moreover, market players are investing in hyperscale data centers, which is, in turn, driving segment growth. For instance, in May 2023, Kazuna Data Centers (Kazuna), the largest hyperscale data center network in the Middle East and North Africa, announced its plans to partner with Benya Group, a leading provider of integrated solutions, digital transformation and ICT infrastructure in Egypt to enter the markets of the Middle East and Africa and Egypt region. The new USD 250 million state-of-the-art data center will be Egypt's first hyperscale data center built in Maadi Technology Park, Egypt's first dedicated investment area.
- In July 2023, Digital Realty, a leading provider of carrier- and cloud-neutral data center, interconnection, and colocation solutions, announced its partnership with GI Partners in order to start a corporation for the sale of a 65% interest in two hyperscale data center buildings, which are stabilized. The company will receive around USD 743 million in gross proceeds from the joint venture and the associated financing.
- The increasing adoption of hyperscale data centers is a significant factor driving the construction market. Hyperscale data centers are large-scale centers designed to aid the large quantities of facts processing and garages required through present-day agencies and organizations. According to Cloudscene, as of July 2023, 5,344 data centers were in the United States, with a further 519 data centers located in Germany.
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North America Accounts for a Major Share
- North America dominates the global market for building data centers. A strong economy and cutting-edge network infrastructure are critical drivers for the market's expansion. The United States dominates the regional market and has many significant cloud service providers, including Amazon.com, Google Inc., and Facebook. These businesses invest in building massive data centers and increased data storage and processing capabilities, which present enormous market prospects.
- Furthermore, the growing demand for data security and privacy is driving the data centers' demand. According to the Identity Theft Resource Center, the count of data breaches in the United States in 2022 was 1,802. However, around 422 million individuals were affected by data breaches in the same year, including data leaks, breaches, and exposures. Although these are three separate events, they have one feature. An unauthorized malicious actor can access sensitive data under three circumstances. With the rise of data breaches and cyber threats, organizations and businesses seek secure and reliable data handling and storage solutions that only advanced data centers can offer.
- The increasing investments in metro infrastructure in North America have provided optimal opportunities for constructing data centers. For instance, CyrusOne intended to build a 340,000 square-foot, 100 MW-capable mega data center in three phases in the Dallas metro area. Furthermore, customers are constantly experiencing increased sophisticated user demands for network and connectivity solutions that deliver faster and more reliable data connections across data centers in the United States.
- Moreover, in November 2022, Metro Edge signed agreements with Clune Construction and other construction businesses to build and design data centers. The project will have all rights to it for the next few months and break ground shortly after.
- The demand for Unified Communications-as-a-Service (UCaaS) solutions from telecom and business technology resellers in North America is also a factor in the market's expansion. To maximize system resilience to MSPs, VARs, ISPs, and interconnects, a player like SkySwitch offers white-label UCaaS from geographically varied sites.
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