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The data center construction market by investment is expected to grow at a CAGR of over 3% during the period 2019–2025


The data center construction market is currently at the forefront of several innovations, which aim to enhance operational efficiencies, reduce power consumption, and decrease carbon emissions in facilities.

New York, March 04, 2020 (GLOBE NEWSWIRE) -- announces the release of the report "Data Center Construction Market - Global Outlook and Forecast 2020-2025" -
The adoption of energy-efficient infrastructure and monitoring solutions has increased considerably in the market. Facilities with high-power consumption are being consolidated, and service providers are shifting toward efficient colocation facilities and cloud platforms. The data center construction market is witnessing an increase in mergers and acquisitions, which are increasing market reach and product expansion. A few prominent mergers and acquisitions that have taken place in the industry including Compass’s acquisition of Root data center and EcoDataCenter and Fortlax merger, and Princeton Digital Group acquisition of 70% Stake in XL Axiata’s Data Center.

Liquid cooling technology is gaining popularity among high-computing facilities to support Artificial Intelligence (AI) and big data analytics. These technologies require powerful computing capability for their TPU, where the heat generated exceeds the cooling limit, thus need efficient cooling to keep the chips functional. Vendors operating in the liquid immersion and direct liquid cooling market are strengthening their offerings through multiple OEM partnerships. Server suppliers are providing direct-to-chip cooling server racks to run AI and machine learning workloads. Hence, it is expected that vendors operating in providing traditional cooling systems are partnering with liquid immersion and direct-liquid cooling vendors to support existing customers in deploying HPC clusters worldwide.

The following factors are expected to contribute to the growth of the data center construction market during the forecast period:
• Cloud Adoption Fuels Data Center Market
• Increasing Demand for Big Data & IoT Investments
• Availability of Power Resources & Tax Incentives
• Procurement of Renewable Energy
• Emergence of Nickle-Zinc & Lithium-ion Batteries in Data Centers

The report considers the present scenario of the data center construction market during the forecast period and its market dynamics for the forecast period 2020?2025. It covers a detailed overview of several market growth enablers, restraints, and trends. The report profiles and examines leading companies and several other prominent companies operating in the market.

Data Center Construction Market: Segmentation

This research report includes a detailed segmentation by facility type, electrical infrastructure, mechanical infrastructure, general construction, tier standards, and geography. In 2019, Europe witnessed the expansion of over 70 small data center projects, registering over $1.5 billion in investments, followed by North America with over 50 projects. The APAC data center construction market witnessed the investment in more than 35 small projects, which contributed over $600 million in revenue. The US, Germany, the Netherlands, the UK, Australia, and France have the highest number of small facility development and expansion projects. APAC is likely to increase its contributions with several telecommunication providers planning to invest in edge data centers by 2025.
Several investors are developing medium-sized facilities with a capacity of 6?14 MW. Apple, Amazon Web Services, Facebook, Alibaba, Digital Realty, Google, CyrusOne, GDS Services Ltd., CtrlS, Bridge Data Centers, SIFY Technologies, NTT Communications, and Canberra Data Centres are investing in hyperscale data center development. The US, China, Germany, the UK, the Netherlands, and India are the major countries that are observing the highest number of hyperscale facilities due to the increasing popularity of cloud computing, big data, and IoT technology. In terms of area, North America dominates the market, followed by Asia and Europe and the region is likely to dominance during the forecast period.

In terms of electrical infrastructure, the adoption of 2N redundant UPS systems has been increased among the facilities in North America. Hyperscale operators are deploying end-of-rack UPS solutions supporting up to six racks. Generators and cooling systems are still being deployed in N+1 redundant configuration. The growing procurement of renewable energy will reduce the dependency on generators. Several facilities in Latin America use UPS systems with minimum N+1 redundancy. VRLA batteries are commonly used, and they are currently the most popular batteries used in the market. However, the emergence of lithium-ion batteries is likely to affect the usage of VRLA batteries and is expected to contribute significant revenue to the data center construction market by the end of the forecast period.

A majority of facilities in North America implementing free cooling solutions. The deployment of tall racks of 45U?52U is experiencing strong traction in the market. Facilities that use water for cooling purposes include on-site water treatment plants that are designed with dual piping. Majority of vendors in South-Eastern and the Western US are adopting air- and water-cooled chillers with the economizer mode to facilitate partial cooling of the facility using outside air. The redundancy adopted is N+1 or N+N in the cooling segment across the US. These redundancies are used for CRAC and CRAH units installed inside the computer room.

The North American data center construction market has a strong presence of contractors and sub-contractors. Expertise in developing new facilities in a short span of time will be a key criterion for the operators to select contractors. The importance of physical security will increase in the market, where the DCIM adoption will include support from artificial intelligence and machine learning. In Latin America, Constuctora Sudamericana, ZFB Group, AECOM, and Aceco TI are some of the prominent construction contractors, engineering, and architecture firms. Latin America is experiencing strong growth in greenfield construction, which is likely to bring significant revenue opportunities for contractors and subcontractors operating in the market.

Western Europe is the most active market in the European region for data center construction. The increase in demand for facilities has increased revenue opportunities for multiple contractors and sub-contractors in the market. However, the major challenge for several contractors in the region is the unavailability of skilled professionals to manage multiple hyperscale projects. This region has a strong presence of both local and global contractors involved in building new facilities.

The number of Tier I and Tier II facilities have reduced significantly over the last five years because of the increasing awareness of the use of redundant infrastructure. Currently, the facility operators are spending on infrastructure across Tier I and Tier II facilities while focusing on adding redundant infrastructure for power. The infrastructure components in Tier III facilities are concurrently maintainable, with minimum N+1.

Several Tier III standard facilities have increased the need for redundant components with minimum support for critical applications in data centers. In Brazil, 45 data centers are Uptime Institute Tier Certified, and a majority of the construction facilities are Tier III standards. Also, most facilities are being built with a minimum of N+1 redundancy in power infrastructure that is certified as Tier III standards. A majority of facilities in the UK are Tier III certified due to their high standard design and construction. Similarly, mega facilities in China & Hong Kong are designed to be of Tier III and Tier IV standards, with the increased deployment of 2N redundant UPS systems.

Market Segmentation by Facility Type
• Small Data Centers
• Medium-sized Data Centers
• Hyperscale Data Centers
Market Segmentation by Electrical Infrastructure
• UPS Systems
• Generators
• Transfer Switches and Switchgears
• Rack PDU
• Other Electrical Infrastructures
Market Segmentation by Mechanical Infrastructure
• Cooling Systems
o CRAC & CRAH units
o Chiller Units
o Cooling Towers, Dry Coolers, & Condensers,
o Other Cooling Units
• Racks
• Others Mechanical Infrastructure
Market Segmentation by General Infrastructure
• Building Development
• Installation and Commissioning Services
• Building Designs
• Physical Security
Market Segmentation by Tier Standards
• Tier I &II
• Tier III
• Tier IV

Insights by Geography

The US is one of the largest markets in North America due to the presence of high investments from colocation providers, hyperscale operators, enterprises, and government agencies. The US is the most mature market in terms of data center development and operations. Major contributions to the growth are colocation and cloud service providers. The growing popularity of the Internet of Things (IoT) is a major driver for the growth of the US data center market. The increasing usage of cloud computing services and applications continues to grow rapidly in the US, thereby leading to the development of mega hyperscale cloud-based facilities.
The implementation of GDPR in Europe has been a strong driver for data center market growth in Western Europe. Hyperscale service operators are involved in the rapid expansion of cloud platforms across Western Europe. Also, the Brexit might have a higher impact on increasing data centers across other Western European countries during the forecast period. The adoption of cloud-based services, big data analytics, and IoT services has grown significantly among local enterprises in the Nordic region, thereby boosting local colocation demand in the market.

The growing number of internet users, the increased use of social media, elevated smartphone penetration, increased adoption of public cloud and hybrid cloud services, and the need for enterprises to migrate from server room environments to data centers are the major drivers in the APAC data center market. The APAC region is witnessing steady growth with steady investments from hyperscale and cloud service providers such as AWS, Microsoft, Google, and Alibaba.

Market Segmentation by Geography
• Western Europe
o UK
o Germany
o France
o Netherlands
o Ireland
o Other Western European Countries
• Central and Eastern Europe
o Russia & Czech Republic
o Poland & Austria
o Other Central & Eastern Countries
o China and Hong Kong
o Australia and New Zealand
o India
o Japan
o Rest of APAC
o Southeast Asia
Other Southeastern Countries
• North America
o US
o Canada
• Latin America
o Brazil
o Other Latin American Countries
• Middle East
o Other Middle Eastern Countries
• Africa
o South Africa
o Morocco
o Other African Countries
• Nordic
o Denmark
o Finland & Iceland
o Norway
o Sweden

Key Vendor Analysis
The electrical data center infrastructure market has become highly competitive owing to the increased interest shown by operators in procuring energy-efficient infrastructure solutions. ABB, Eaton, Schneider Electric, and Vertiv are the leading players in power infrastructure. The data center cooling market comprises both global and local providers. Several cooling infrastructure providers are offering specific products or a complete range of infrastructure solutions for the facilities. Over the past few years, the growing consumption of electricity by data center cooling units has led to multiple innovations. Vendors are focusing on following sustainability practices in the facilities. Construction and design are critical for operators to adhere to standards regulatory standards.

Prominent Data Center Support Infrastructure Providers
• Eaton
• Rittal
• Schneider Electric
• Vertiv
• Caterpillar
• Cummins

Prominent Data Center Contractors
• Bouygues
• DPR Construction
• Holder Construction
• Jacobs Engineering
• Mercury Engineering
• M+W Group

Prominent Data Center Investors
• Apple
• AWS (Amazon Web Services)
• CyrusOne
• Digital Realty
• Equinix
• Facebook
• GDS Holdings
• Google
• Interxion
• Microsoft
• NTT Communications

Other Prominent Support Infrastructure Providers – Airedale Air Conditioning, Alfa Laval, Altima Technologies (NetZoom), Asetek, Bosch Security Systems (Robert Bosch), Condair Group, Delta Group, Euro-Diesel (KINOLT), Green Revolution Cooling (GRC), Hitech Power Protection, Huawei, KOHLER (SDMO), Legrand, Nlyte Software, Mitsubishi Electric Corporation, MTU On Site Energy (Rolls-Royce Power Systems AG), Socomec, Trane (INGERSOLL RAND), and ZincFive
Other Prominent Construction Contractors – Arup Group, Cap Ingelec, Corgan, CSF Group, Faithful+Gould, Fluor Corporation, Fortis Construction, Gensler, Gilbane Building, HDR Architecture, ISG, Jones Engineering, Kirby Group Engineering, KKR Investment Group (Aceco TI S.A.), Larsen & Turbo (L&T), Linesight, Mace Group, Morrison Hershfield, Mortenson Construction, Red-Engineering, Structure Tone, Syska Hennessy Group, and Winthrop
Other Prominent Data Center Investors – Cologix (Colo-D), Colt Data Centre Services (COLT DCS), Compass Data Centers (Root Data Center), COPT Data Center Solutions (COPT DCS), CoreSite Realty, Global Switch, Keppel DC, Quality Technology Services (QTS Realty Trust), ST Telemedia Global Data Centres (STT GDC), Vantage Data Center

Key Market Insights Include
The report provides the following insights into the global data center construction market during the forecast period 2020–2025.
1. It offers comprehensive insights into current industry trends, trend forecast, and growth drivers about the market.
2. The report provides the latest analysis of share, growth drivers, challenges, and investment opportunities.
3. It offers a complete overview of segments and the regional outlook of the market.
4. The study offers a detailed overview of the vendor landscape, competitive analysis, and key strategies to gain competitive advantage.
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