In-depth Analysis and Data-driven Insights on the Impact of COVID-19 Included in this Global Data Center Construction Market Report
The data center construction market is expected to grow at a CAGR of 4.8% during the period 2022–2031.
The global data center construction market continues to witness a slew of mergers and acquisitions, followed by joint ventures. The growing demand for data center services across industries has led service providers to collaborate, participate, and sign several mergers and acquisitions to expand their portfolios, expand their reach, and increase their penetration in the market. M&A activities have been followed up with joint ventures, which have acted as a catalyst for market growth. Although the market witnessed several mergers and acquisitions in 2020, the most remarkable ones are the acquisition of Digital Realty merger with Interxion in March 2020, Hypertec by Vantage Data Center in Nov 2020 in Canada. The APAC region witnessed a few high-profile mergers, however, the data center market in India observed two majors acquisitions in 2020 ¬– Equinix’s acquisition of GPX Global Systems in Aug 2020 and Carlyle Group’s merger with Airtel Nxtra Data Center (25%).
The following factors are likely to contribute to the growth of the data center construction market during the forecast period:
• 5G to Grow Edge Data Center Investments
• Growth in Procurement of Renewable Energy
• Innovative UPS Battery Technology
• Availability of Power Resources and Tax Incentives
The study considers the present scenario of the data center construction market and its market dynamics for the period 2020−2026. It covers a detailed overview of several market growth enablers, restraints, and trends. The report offers both the demand and supply aspects of the market. It profiles and examines leading companies and other prominent ones operating in the market.
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Data Center Construction Market Segmentation
The global data center construction market research report includes a detailed segmentation by facility type, electrical infrastructure, mechanical infrastructure, cooling technique, general construction, tier standards, geography. Currently, the US, Germany, Sweden, Australia, Canada, India, and France are witnessing the highest development and expansion of small data center projects, which fall under the capacity of less than 5 MW. Europe witnessed the development of multiple small projects, accounting for over $2 billion in investments. In 2020, the US accounted for around 80% of data center projects with an estimated investment of around $700 million in the Americas data center market. Germany, France, and Switzerland are the major contributors with more than $700 million in investments. The APAC market witnessed the construction of several small projects, accounting for over $2 billion investments.
In terms of electrical infrastructure, several data center facilities in North America have adopted 2N redundant UPS systems. Hyperscale operators are deploying end-of-rack UPS solutions supporting up to six racks. Generators are still being deployed in N+1 redundant configuration. Most facilities have deployed over 1,000 kVA UPS systems and >2 MW generators. However, the increasing procurement of renewable energy is likely to decrease the need for generator systems. The UK, Germany, the Netherlands, France, and Ireland are witnessing high investments in power infrastructure. Several facilities have adopted flexible designs to facilitate the installation of dual power feed, 2N redundant UPS and PDU systems, and N+1 generator. The Western Europe market share of metered and monitored rack PDU solutions has observed a remarkable increase. Hyperscale service providers in the Nordic region are procuring 48V DC UPS systems. These systems prevent a 5–10% loss in AC to DC conversion. Most facilities in the region are powered by renewable energy with a grid stability of over 95%. This reduces the number of redundant generators in the market.
A majority of facilities in North America are cooled via free cooling solutions. Several facilities built-in 2020 adopted free cooling techniques to reduce the energy cost. Economizers, evaporative and adiabatic coolers, and free cooling chillers are adopted among data centers during summers and winters. Also, direct liquid cooling and liquid immersion cooling solutions are growing among data centers. Adiabatic coolers, evaporative coolers, and free cooling chiller systems are observing adoption in Western Europe. The use of water-based cooling includes water-treatment plants and systems that can aid the consumption of water by up to 20%. Several facilities in the Nordic region install free cooling techniques. Hence, the use of free cooling systems is expected to add significant revenues during the forecast period. Several data centers in Central and Eastern Europe have been equipped with in-direct evaporative/adiabatic coolers and support free cooling of over 6,000 hours per year. A few facilities have also adopted water/glycol-based cooling systems along with highly efficient DX-based CRAC systems. Several data centers in the APAC region have air- and water-based cooling systems. China, Japan, Australia, New Zealand, and South Korea benefit from cooling systems that support free cooling and reduce power consumption.
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Greenfield data center construction of Tier III standards is more common in the APAC region. The region has a strong presence of local and global contractors. The average labor cost in many countries, including India, is economical than in the US and Europe. While the Middle East market is dominated by greenfield constructions, the UAE and Qatar are likely to witness high modular data center investments. Most greenfield projects covering an area of over 50,000 square feet, require strong expertise in construction, design, and engineering services. The labor cost is moderate in the Middle East due to the availability of a skilled workforce. Most major data center constructions in the region are managed by Europe-based construction service providers that include architects and engineering firms. However, the non-availability of skilled workforce to manage multiple hyperscale projects is a major challenge for several contractors in the region.
Over the last five years, the increasing awareness of redundant infrastructure has decreased the number of Tier I and Tier II data centers significantly across the globe. UPS and PDU systems of Tier II data centers are equipped with minimum N+N redundancy. Around 200 Tier III data centers were under construction in 2020, with 125 data centers opening in 2020. Most of these new facilities are designed to be Tier III standards with a minimum of N+1 redundancy. However, Tier IV facilities are expected to witness significant investments in the market, with focused investment on highly efficient cooling systems. Tier IV facilities equip 2N+1 cooling units. Data center build-out announcements from Apple, Facebook, and Google are likely to significant boost to the tier IV market.
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