Market Trends of North America Data Center Construction Industry
United States of America to hold major market share
- The United States data center construction market is a rapidly growing industry driven by the increasing demand for data storage and processing capabilities. The growth of cloud computing, the Internet of Things (IoT), artificial intelligence (AI), and other emerging technologies have led to an exponential increase in data generation, storage, and processing needs, which, in turn, has resulted in a surge in the construction of data centers in the United States.
- The country also has a constant stream of investments from the IT giants like Facebook, Google, Amazon, Apple, and Microsoft towards hyperscale data centers making the States a leading country in North America's data center market. According to Cloudscene, there are 2701 data centers in the United States, compared to 328 data centers in Canada and 153 in Mexico.
- In addition, the tax benefits and the incentives offered by the governmental authorities are among the factors driving investments in data center construction. Approximately 27 states in the United States leverage these factors to attract data center projects. In addition, the heavy tax breaks being implemented in the country indicate a government-front aim to construct new data centers or renovate the existing ones.
- The demand for Data Centers in the United States is majorly spread across metropolitan areas such as New York, Los Angeles, and Chicago, primarily due to large enterprises and cloud service providers.
- For Instance, in November 2022, At Elk Grove Village, Illinois, at 1600 East Higgins Road, Prime Data Centers, a company offering data center solutions, is experiencing significant expansion. The company broke ground on its USD 1 billion Chicago data center campus. In order to create the largest data center campus in the Greater Chicago area, Prime ORD is expected to provide more than 750,000 sq. feet and 175 megawatts of capacity when fully built out. The first three campus data centers planned ORD-01, are expected to be promoted as single-tenant, hyperscale data centers to large cloud providers, international enterprises on the internet colocation firms, and Fortune 500 companies.
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Healthcare End User Vertical Holds Significant Market Share
- Data center construction in the healthcare sector is expected to witness substantial demand during the forecast period due to the growth in digital data owing to technological advances and government incentives to implement Electronic Health Records (EHR), the proliferation of IoT, and smart devices in the country's healthcare sector. In addition, the increased enforcement of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) security is further forcing healthcare organizations to upgrade data security and disaster recovery protocols or face high penalties.
- Moreover, with the introduction of the Electronic Medical Records (EMR) Mandate in the United States, healthcare organizations nationwide have adopted cloud-based healthcare solutions to store and protect patient records. Most hospitals and healthcare organizations use cloud storage for patients' healthcare data. Electronic health records are stored in the cloud and updated electronically by physicians, nurses, and other healthcare providers. Such factors augment the demand for data center construction, owning to the growth in digital data in the healthcare sector.
- The digitization of consumer healthcare records in the form of electronic medical records (EMR) has significantly contributed to massive data generation. The latest innovations in medical equipment and the modernization of legacy operating systems, such as the management of personnel and the improvement in the patient response systems, generate a multitude of data, further necessitating the need for secured data center construction initiatives in the country.
- Furthermore, the country's government continuously recognizes the role of digital health and technological innovation in healthcare as an integral part of successful healthcare infrastructure. The government is making significant strides to make the healthcare sector technologically advanced and continuously increasing its healthcare expenditure to support the healthcare sector. For instance, according to the data from CMS (Office of the Actuary), the forecasted U.S. national health expenditure was expected to reach USD 6751.4 billion in 2030 from USD 4297.1 billion in 2021.
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