Data center construction market to reach $308.7 bn by 2027

According to a recent report published by Grand View Research Inc., the global data center construction market size is expected to register a CAGR of 6.4% during the forecast period, reaching a value of USD 308.7 billion by 2027. The growth is fueled by the increasing demand for data storage and processing capabilities and the increased use of big data analytics. Furthermore, the growing trend of cloud computing and virtualization, along with the rise in digital transformation, is also contributing to market growth. Other significant factors driving the market growth include rising investment in infrastructure projects, increasing government spending on information technology, and greater demand from the enterprise sector.

Key industry insights & findings from the report:
The IT infrastructure segment is expected to register a CAGR of 6.3% over the forecast period as a result of the increasing demand for high-performance computing servers, storage capacity, and sophisticated networking infrastructure.
In Asia Pacific, the market is expected to witness high growth over the forecast period in line with the rapid development of IT and communication infrastructure and the continued rollout of 5G networks.
Key players focus on product innovation and introduction of new technologies to their portfolio. For instance, in June 2018, Huawei Technologies Co. Ltd. released Smart DC 3.0, a solution that leverages AI technology to manage cooling and the utilization of power and resources.

Data center construction market growth & trends
The adoption of a software-defined data center in the healthcare industry is expected to drive market growth in the near future. There has been an increase in medical expenditures every year. The Institute for Health Metrics and Evaluation predicts that by 2040, healthcare spending will total USD 18.28 trillion, with high-income countries spending USD 9,019 per person. Despite the nascent stage that healthcare organizations are in with adopting modern IT infrastructure changes. Data management, networking, and server storage can be streamlined, unified, and improved by implementing a software-defined data center in the healthcare industry.

Asia Pacific IT infrastructure industry expanded significantly during fiscal 2019. The increase in sales of networking equipment, such as switches and routers, handles this expansion. Businesses like Huawei Technologies Co. Ltd., Dell, and HP Enterprises have all contributed significantly to the expansion of the market in the area. The introduction of new products by these businesses in the servers and networking sectors has helped the IT infrastructure market expand throughout the Asia Pacific. Additionally, this region is receiving a significant investment from cloud service companies. For instance, Amazon.com invested USD 339.7 billion in its Indian data center and e-commerce businesses in February 2020.

Growing adoption of hyper-scale data centers in large enterprises
The increased construction of hyper-scale data centers throughout the world to store large amounts of data is creating a lucrative opportunity for industry participants. Hyper-scale data centers are utilized in a variety of industries to enhance computing power, memory, networking infrastructure, and storage resources. The physical infrastructure and distribution systems supporting the data centers for optimizing cooling efficiency, and the capacity to extensively scale computing workloads effectively, are among the different elements of hyper-scale data centers.

Adoption of IoT, AI, and intelligent computing
Internet of things (IoT), AI, and intelligent computing are gaining popularity in a variety of sectors and industrial verticals, creating opportunities for market participants. Developing countries have invested in data center infrastructure as part of their efforts to automate the economy. These facilities have witnessed widespread use in areas such as BFSI, manufacturing, healthcare, and energy, among others. For instance, in 2020, Wiwynn unveiled next-generation Open Compute Project (OCP) servers to meet the growing demand for cloud computing, artificial intelligence, and high-performance computing.

Role of key players
The network infrastructure ecosystem is benefitting from government initiatives aimed at reducing barriers to cross-border operations. As a result, key players like Huawei Technologies Co. Ltd, AT&T, and Sky Telecom, among others, have been aggressively investing in rising economies in Latin America, the Middle East, and other regions to expand their business. These market players are securing contracts and tapping into new markets to increase their presence with technological advancements and product innovations. In addition, these key players are pursuing various strategic activities, such as geographical expansion, acquisitions, mergers, and collaborations. For instance, in 2020, MOX Networks, LLC, and Cologix declared a new partnership to provide connectivity solutions across North America.

CT Bureau