Global Data Center Construction Market Size By Infrastructure Type (Electrical Infrastructure, Mechanical Infrastructure), By Data Center Type (Tier 1 And 2, Tier 3), By Organization Size (Small Organization, Medium Organization), By Vertical (Banking, Financial Services And Insurance (BFSI), IT And

Data Center Construction Market Size And Forecast

Data Center Construction Market size was valued at USD 23.76 Billion in 2023 and is projected to reach USD 42.05 Billion by 2031, growing at a CAGR of 7.40% from 2024 to 2031.

• Data center construction is the design, installation, and upkeep of facilities specifically designed to host computer systems and other components, such as storage and networking equipment. These centers are critical for enterprises that need a strong infrastructure to store, process, and distribute large volumes of data efficiently and securely. The construction process normally consists of several steps, including site selection, architectural design, electrical and mechanical engineering, and continuing management to ensure maximum performance and reliability.
• Data center development is critical for industries that rely on digital operations, including telecommunications, finance, healthcare, and e-commerce. Telecommunications organizations use data centers to support their networks, whereas banking institutions require them to safely store sensitive transactional data.
• Furthermore, cloud service providers rely largely on data centers to supply scalable and dependable computing resources to their clients. Government agencies and academic institutions require data centers for data storage and analysis.
• Robust physical security measures to prevent illegal entry, redundant power and cooling systems to reduce downtime, and advanced fire suppression systems to safeguard sensitive equipment. Furthermore, data centers frequently use high-density server layouts and new cooling systems to maximize space utilization and energy efficiency. Furthermore, scalability is crucial, allowing firms to smoothly expand their infrastructure as their data processing requirements rise.

Global Data Center Construction Market Dynamics

The key market dynamics that are shaping the global Data Center Construction Market include

Key Market Drivers

• Rapid Data Increase The exponential rise of digital data, fueled by developments such as IoT, big data analytics, and cloud computing, increases demand for data center building. With more data being generated than ever before, businesses require a strong infrastructure to store, process, and manage it efficiently. This boom in data creation needs the constant growth and construction of data centers around the world.
• Increasing Cloud AdoptionBusinesses are increasingly transitioning to cloud-based solutions to benefit from scalability, flexibility, and cost-efficiency. This transition to cloud computing raises the demand for hyperscale data centers capable of handling massive volumes of virtualized workloads. As a result, data center construction projects are launched to address the infrastructure needs of cloud service providers and organizations adopting cloud technology.
• Digital Transformation Initiatives Organizations across industries are implementing digital transformation strategies to improve efficiency, innovation, and competitiveness. As part of this change, there is a stronger emphasis on updating IT infrastructure to enable emerging technologies such as AI, machine learning, and edge computing. Data center building plays a critical role in facilitating these endeavors by laying the groundwork for improved digital capabilities.
• Global Economic Expansion Economic expansion and digitalization initiatives in emerging nations are driving the demand for data center infrastructure to support growing business operations. Countries experiencing rapid industrialization and urbanization engage in developing strong data center ecosystems to attract international investment, stimulate innovation, and meet their populations’ expanding digital demands. This global increase in data center construction helps to create jobs, improve infrastructure, and drive economic progress.

Key Challenges

• Cost Management Data center building projects frequently confront cost management issues, such as budget overruns, rising material prices, and unforeseen charges. The complexity of data center infrastructure, combined with changing technology needs and regulatory compliance, can cause cost increases during the development process. Effective cost estimation, budget forecasting, and proactive risk management measures are critical for mitigating cost issues and ensuring project profitability.
• Sustainability & Energy Efficiency Balancing the demand for high-performance computing with environmental sustainability presents a difficulty in data center design. Energy-intensive operations, such as cooling and electricity distribution, increase carbon emissions and energy consumption. Optimal energy efficiency and sustainability necessitate innovative design ideas, renewable energy integration, and effective cooling systems. To reduce environmental effect and operational expenses, data center construction projects should target green building methods and energy-efficient infrastructure.
• Construction Timeline and Delays Meeting project timetables and deadlines in data center building is difficult due to the complexity of the build process and the collaboration of various stakeholders. Construction delays can be caused by a variety of circumstances, including permit challenges, supply chain bottlenecks, labor shortages, and unexpected site conditions. Effective project management, proactive risk assessment, and contingency planning are critical for reducing delays and completing data center construction projects on time.
• Security and Cybersecurity Risks Data center building must consider security and cybersecurity risks in order to protect against physical dangers, unauthorized entry, and cyber-attacks. To protect vital infrastructure and sensitive data, data center buildings must be designed with strong physical security measures, access restrictions, surveillance systems, and cybersecurity processes in place. Mitigating security threats necessitates thorough risk assessments, threat modeling, and adherence to industry standards and best practices for data center design and management. 

Key Trends

• Edge Data Centers The expansion of edge computing has prompted the development of edge data centers, which are intentionally situated closer to end-users and IoT devices to minimize latency and improve performance. These smaller, dispersed facilities enable real-time data processing and support latency-sensitive applications like self-driving cars and augmented reality. To address changing edge computing requirements, edge data centers are built with scalability, energy efficiency, and modular designs in mind.
• Hyperscale Expansion Hyperscale data center development is on the rise as cloud providers and major corporations scale up their infrastructure to meet the growing demand for cloud services and big data analytics. These enormous facilities use economies of scale to deliver high-density computer power and storage capacity efficiently. Hyperscale data center building prioritizes rapid deployment, energy optimization, and modular architectures to enable dynamic scalability and cost-effectiveness.
• High-Density Computing High-density computer environments stimulate innovation in data center design, necessitating innovative cooling solutions and efficient power distribution systems. As corporations concentrate workloads and introduce high-performance computing technologies such as AI and machine learning, data center building emphasizes the design and execution of cooling systems that can dissipate heat from densely packed server racks. Liquid cooling, rear-door heat exchangers, and other new cooling technologies are increasingly being used to efficiently regulate heat in high-density areas.
• AI and Automation Artificial intelligence (AI) and automation technologies are used in data center construction to increase efficiency, streamline operations, and improve performance. AI-powered analytics, predictive maintenance, and automation solutions are used to reduce energy use, monitor equipment health, and optimize task placement. AI and automation are being used in data center construction to streamline processes, optimize resource allocation, and increase operational intelligence throughout the facility’s life cycle.

Global Data Center Construction Market Regional Analysis

Here is a more detailed regional analysis of the global Data Center Construction Market

North America

• The North American Data Center Construction Market is expected to develop significantly, with a compound annual growth rate (CAGR) of 6.6% from 2024 to 2030. This growth trajectory is being driven by an increase in demand for dependable and secure data processing and storage solutions from businesses across the area. With the proliferation of cyber threats and data breaches, combined with an increasingly stringent regulatory environment, North American organizations are prioritizing the establishment of robust data center infrastructure to protect sensitive information and ensure regulatory compliance.
• Furthermore, the growing use of cloud applications and innovative technologies like artificial intelligence (AI) is increasing the demand for contemporary and scalable data centers in North America. Businesses are using cloud computing to improve operational efficiency, innovation, and agility, necessitating the creation of data centers capable of meeting changing technological needs. The integration of AI and machine learning applications across industries emphasizes the relevance of data center building, as enterprises strive to leverage the power of data analytics and automation to gain a competitive advantage and grow their businesses.
• In response to market realities, North American data center construction projects prioritize dependability, security, and scalability. Stakeholders in the region are investing in cutting-edge infrastructure, such as redundant power and cooling systems, improved security features, and modular designs, to suit the changing needs of businesses in a dynamic digital world. With the continuous expansion of cloud services, AI-driven applications, and digital transformation initiatives, North America’s Data Center Construction Market is positioned for long-term growth, providing opportunities for innovation, investment, and technical advancement in the coming years.

Asia Pacific

• The Asia Pacific area is expected to have strong growth in the data center construction industry, with a compound annual growth rate (CAGR) of 8.9% between 2024 and 2030. This expansion is supported by the region’s rapid digitalization activities and the growing acceptance of cloud computing solutions across a variety of businesses. With roughly 1,300 data centers already operational in 2022, Asia Pacific is likely to see significant growth in data center infrastructure investments during the projection period, reflecting the region’s strong demand for dependable and scalable data processing and storage capabilities.
• Several main drivers are driving Asia Pacific data center infrastructure demand, including increased cloud service use, data localization needs, and the spread of future technologies such as 5G and the Internet of Things (IoT). As businesses around the region embrace cloud computing to improve agility, cost-effectiveness, and scalability, the demand for contemporary and efficient data centers grows. Furthermore, legislative initiatives requiring data storage and processing within national boundaries encourage the creation of localized data center facilities, boosting market growth in Asia Pacific.
• Furthermore, the introduction of disruptive technologies such as 5G networks and IoT devices increases the demand for robust data center infrastructure that can support high-speed connectivity, low-latency applications, and large data processing requirements. The integration of 5G and IoT technologies across industries, such as telecommunications, manufacturing, and smart cities, emphasizes the importance of data centers in facilitating digital innovation and driving economic growth in Asia Pacific.
• With a favorable legal framework, rising digital ecosystems, and increased investment in infrastructure development, Asia Pacific is emerging as a key hub for data center construction, providing attractive prospects for players in the burgeoning market landscape.

Global Data Center Construction MarketSegmentation Analysis

The Global Data Center Construction Market is Segmented on the basis of Infrastructure Type, Data Center Type, Organization Size, Vertical, And Geography.

Data Center Construction Market, By Infrastructure Type

• Electrical Infrastructure
• Mechanical Infrastructure
• General Infrastructure

Based on Infrastructure Type, the market is bifurcated into Electrical Infrastructure, Mechanical Infrastructure, and General Infrastructure. Mechanical Infrastructure is most likely the leading section in the Data Center Construction Market. This is because it includes critical components for data center operation, such as cooling systems and racks, which are required to manage the enormous heat created by data storage. The fastest-growing segment is projected to be electrical infrastructure. The growing demand for efficient data storage and processing necessitates the use of durable and scalable power systems, including UPS (Uninterruptible Power Supply) and other electrical equipment. The emphasis on optimizing power supply is driving growth in this area.

Data Center Construction Market, By Data Center Type

• Tier 1&2
• Tier 3
• Tier 4

Based on Data Center Type, the market is segmented into Tier 1&2, Tier 3, and Tier 4. Tiers 3 and 4 are the most common tier classifications in data center building. Tier 3 provides high availability and little downtime, making it appropriate for important processes. Tier 4 provides even better reliability, with a near-zero tolerance for disruptions, making it ideal for mission-critical jobs. Tier 2 data centers are predicted to be the fastest growing segment. These provide enough uptime for non-critical applications at a cheaper cost, which is appealing in a developing market with diversified data requirements.

Data Center Construction Market, By Organization Size

• Small Organization
• Medium Organization
• Large Organization

Based on Organization Size, the market is segmented into Small Organization, Medium Organization, and Large Organization. Large businesses now dominate the Data Center Construction Market. This is due to the increasing volume of data that businesses manage, as well as the growing need for high-performance computers and cloud services. The fastest-growing group is likely to be medium-sized businesses. This development is linked to the increasing adoption of cloud computing and digitalization across industries, including mid-sized businesses.

Data Center Construction Market, By Vertical

• Banking, Financial Services and Insurance (BFSI)
• IT & Telecommunications
• Government & Defense
• Healthcare

Based on Vertical, the market is segmented into Banking, Financial Services and Insurance (BFSI), IT & Telecommunications, Government & Defense, and Healthcare. IT and Telecommunications are projected to maintain their dominance due to the ever-increasing volume of data generated by enterprises. The advent of cloud services, big data analytics, and the Internet of Things (IoT) all add to the demand for large data storage facilities.

Key Players

The “Global Data Center Construction Market” study report will provide valuable insight with an emphasis on the global market. The major players in the market are SAS Institute, Inc., IBM Corporation, Fortis Construction, Turner Construction Co., HITT Contracting, Inc., JE Dunn Construction Group, Inc., DPR Construction Inc., Hensel Phelps Construction Co., Inc., AECOM, MA Mortenson Company, Inc. The competitive landscape section also includes key development strategies, market share, and market ranking analysis of the above-mentioned players globally.

Our market analysis also entails a section solely dedicated to such major players wherein our analysts provide an insight into the financial statements of all the major players, along with product benchmarking and SWOT analysis. The competitive landscape section also includes key development strategies, market share, and market ranking analysis of the above-mentioned players globally.

Data Center Construction Market Recent Developments

• In April 2024, AGM Group Holdings, Inc., a technology business, inked a Memorandum of Understanding with RED DOT ANALYTICS PTE. LTD. to build AI hyper-connected, GPU-powered data centers. The collaboration intends to use AGMH’s technical experience and RDA’s AI service skills to construct advanced, GPU-powered data center infrastructure to enable AI applications and workloads.
• In September 2023, Digital Realty is constructing a high-availability data center (ROM1) in Rome, Italy, to accommodate rising demand. Construction is expected to begin along the shore to provide an excellent connection. This development increases Digital Realty’s position in the Mediterranean region.
• In March 2023, Vertiv announced that it would develop a distribution relationship with iPoint, a multi-brand distributor of computer peripherals and electronic gadgets for Bahraini businesses and individuals. The agreement envisioned Vertiv improving iPoint’s existing offering with its robust IT infrastructure and power solutions for data centers and edge applications, while also expanding its market presence in Bahrain and the Gulf Cooperation Council (GCC).
• In March 2023, NTT will invest USD 90 Million in its largest Thailand data center (BKK3). BKK3 will launch in H2 2024 and will provide 12MW of IT capacity for businesses that require high-density power. This expansion cements NTT’s commitment to Thailand’s thriving digital economy.

Report Scope

Research Methodology of Market Research