Data Center Construction Market in US - Industry Outlook and Forecast 2019-2024

This market research report on US data center construction market covers market sizing and forecast, market share, industry trends, growth drivers, and vendor analysis. The market study includes insights on segmentation by infrastructure (electrical (UPS systems, generators, transfer switches & switchgears, rack PDUs, and others) and mechanical type (cooling systems, racks, and others), general construction (building development, installation and commissioning services, building design, physical security, and DCIM), facility size (small data centers, medium data centers, and hyperscale data centers), tier standards (Tier I and Tier II, Tier III, and Tier IV), and geography (South Eastern US, South Western US, Mid-Western US, Western US, and North Eastern US).

 US Data Center Construction Market: Dynamics

The increased focus on green data centers construction is a major driver for procuring energy-efficient infrastructure in the US data center construction market

The data centers are confronting with the challenges of increased power and water consumption. To overcome the difficulties, the US data center construction market is increasingly opting for green data center construction. The procurement of renewable energy sources and the implementation of Energy Star certified products is driving the US data center construction market.

Also, the increased operational expenditure by data centers is driving vendors to proactive monitoring and managing support infrastructure. Hence, the increasing vigilance of the infrastructure is driving vendors toward end-to-end facility automation, which is expected to affect the US data center construction market significantly. The US data center construction market is witnessing high investment from colocation and cloud hosting service and hyperscale data center operators.

The market is likely to witness many brownfield constructions, especially in the North-Eastern US. Factors such as favorable government support (attractive tax rebates and remissions), the increased demand for cloud-based services, the growing investment from colocation providers, and increased automation are expected to propel the US data center construction market in the coming years. The US data center construction market is projected to generate revenues of around $12 billion by 2024.

US Data Center Construction Market: Segmentation

 This market research report includes detailed market segmentation by infrastructure, general construction, facility size, tier standards, and geography. 

US Data Center Construction Market: Electrical Infrastructure

 The adoption of lithium-ion and nickel-zinc UPS systems is expected to boost the data center UPS market in the US.

 The US data center construction market by electrical infrastructure comprises UPS (uninterrupted power supply) systems, generators, transfer switches & switchgears, rack PDUs, other electrical infrastructure. The UPS system segment dominated the market size in 2018 and is expected to grow at a CAGR of around 1.3% during the forecast period. The increased adoption of lithium-ion and Nickel-Zinc UPS systems is expected to boost the data center UPS market in the US.

The market is also witnessing the growth in generators powered by fuel cells to reduce carbon emission. Further, the increasing complexity of the data center infrastructure has led to the development of automated switchgear technology (ATS). The growing interest in green data centers to reduce the efficiency of data centers is driving the demand for intelligent racks PDUs in the market. Vendors are offering PDUs in a variety of colors for identification purposes. Besides, the increased investment in mega data centers with high-power capabilities is likely to produce high revenues for the other electrical infrastructure segment.

US Data Center Construction Market: Mechanical Infrastructure

The adoption of innovative infrastructure solutions is expected to drive the US data center construction market

The mechanical construction segment in the data center construction market is categorized into cooling systems, racks, and others. The cooling system segment accounted for the largest market, share in 2018. The extensive use of indirect evaporative coolers, air or water-side economizers, and free cooling chillers is driving the market.

Further, the significance of metrics such as Power Usage Effectiveness (PUE), Water-usage Effectiveness (WUE), and Carbon Usage Effectiveness (CUE) is likely to increase during the forecast period. The market is adopting innovative solutions such as multipurpose cooling systems and modular infrastructure solutions, which are expected to drive the US data center construction market. The market is migrating toward the adoption of over 42U racks - 45U, 47U, and 48U. Also, there is a high adoption of 52U rack units in the Southeast US. Further, innovations in the market have led to the growth of performance-optimized data (POD) centers.

US Data Center Construction Market: General Infrastructure

The number of Brownfield, Greenfield, and modular projects is likely to continue in the US market over the next few years

The US data center construction market by general construction is classified into building development, installation and commissioning services, building design, physical security, and DCIM. The growing number of brownfield, Greenfield, and modular facilities projects with the installation of on-site renewable power sources such as wind and solar energy is likely to continue in the market over the next few years. Further, infrastructure vendors are increasingly partnering with major contractors to increase the revenue share.

The growth in greenfield data center facilities will increase revenue opportunities for installation and commission service providers. Further, the designing of data centers is performed by design specialists, contractors, and data center operators. The rise in security breaches is further boosting the market for physical security.

The Data Center Infrastructure Management (DCIM) market is growing due to the rising impact of regulatory standards on data centers. The use of artificial intelligence and robot monitoring technologies is expected to contribute to market growth.  For instance, Google uses DeepMind AI solutions to monitor infrastructure in their facilities.

US Data Center Construction Market: Cooling Techniques

Free cooling solutions are gaining more popularity than liquid-based cooling solutions during the forecast period

Air-based and liquid-based cooling technique are the two major cooling systems available in the US data center construction market. The air-cooling method involves traditional CRACs and free cooling solutions for cooling IT infrastructure in the data center. Free cooling solutions are gaining more popularity than liquid-based cooling solutions. However, the use of chilled water systems is still highly prevalent in the market, particularly in the Northern US. The US market is witnessing the increased adoption of evaporative coolers that facilitate partial cooling with indoor CRAC units among data centers.

US Data Center Construction Market: Cooling Systems

The South Eastern, Midwest, and Southwest US are the largest adopters of chiller units in the US data center construction market

CRAC & CRAH units work in conjunction with other cooling units such as chillers, cooling towers, dry coolers, and condensers. There is a growing demand for both CRACs and CRAHs units in the data center to increase efficiency and productivity in the IT infrastructure. The South Eastern and the Mid-Western US are majorly adopting CRAH units. The construction of mega and hyperscale facilities is a driving factor for the increased adoption of both CRAC and CRAH units with 2N redundant configuration.

The South Eastern, Midwest, and Southwest US are the largest adopters of chiller units in the US data center construction market.  Further, air-cooled chiller systems are gaining prominence over water-cooled systems due to their easy installation, high efficiency, and low maintenance costs. Cooling towers and dry coolers are installed to reduce heat generated by IT infrastructure.

US Data Center Construction Market: Facility Size

South-Eastern US and the Western US witnessed the highest investments in the hyperscale data center facilities in 2018

Small, medium, and hyperscale are the three primary facilities in the US data center construction market. The hyperscale segment dominated the US data center construction market in 2018 and is expected to grow steadily during the forecast period. The South Eastern US and the Western US witnessed the highest investment from investors in the hyperscale data center facilities.

Further, Facebook, Apple, Google, Microsoft, PointOne, and EdgeCoreare expected to be the major investors in hyperscale facilities in the US. The South Eastern US witnessed the highest investment in medium data center facilities. Further, Digital Realty, Cologix, COPT data center, Raging Wire Data Center, and Sabey Data Center are the major investors in the medium segment.

US Data Center Construction Market: Tier Standards

Several Vendor are shifting to tier IV facilities due to the increase in the rack density and rise in critical applications inside data centers

 In terms of tier standard, the US data center construction market is categorized into Tier I & II, Tier III, and Tier IV. The Tier III standard segment accounted for the highest market size in 2018, which is expected to grow at a CAGR of over 1% during the forecast period. The need for tier III certification from the Uptime Institute to attract customers and increase the occupancy rate will boost the growth of this segment in the US market. However, several operators are expected to shift to Tier IV standard facilities due to the growth in the rack power density and critical infrastructure operations running inside facilities. Further, the Southwest and Midwest regions of the US are emerging the largest adopters of tier IV data centers with 2N+1 cooling unit. The increased investment from hyperscale developers is the major region for the increase in the construction of tier IV data center facilities in the region. 

US Data Center Construction Market: Geography

The availability of robust fiber connectivity and low power rates has primarily contributed to the increased growth of Southwestern US data center market

South Eastern US dominated the market share in 2018 and is expected to grow at a CAGR of around 1.2% during the forecast period. Virginia gained the highest investment, followed by North Carolina, Georgia, Alabama, and Florida. Recently, Facebook invested around $2 billion in a data center in Henrico, Virginia. In the Southwestern US, Texas received the highest investments in 2018, whereas Oklahoma and New Mexico witnessed significant investment by Google and Facebook data centers. The availability of robust fiber connectivity and low power rates has primarily contributed to the increased growth in the region.

Key Vendor Analysis

The US data center construction market is continuing to grow in terms of greenfield, brownfield, and modular data center construction. The market is witnessing the increased growth of data centers across the US, with the high adoption of efficient and modular data center infrastructure solutions. The market has a strong presence of vendors in all three categories - electrical infrastructure, mechanical infrastructure, and general construction.

The adoption of Lithium-ion batteries, fuel cell technology, natural gas generators, intelligent PDUs, and high voltage switchgear is expected to increase the competition in the market among electrical infrastructure vendors.

The direct liquid cooling and immersion cooling market is expected to become competitive as the adoption of HPC infrastructure among data centers is growing in the US. Initiatives such as Open Commute Projects are expected to bring several new cooling techniques and technologies to the market, thereby increasing the competition among mechanical infrastructure vendors.

The US comprises several construction contractors, architectural and engineering firms, physical security vendors, and DCIM solutions providers. Several colocation data centers are being built with multiple data halls, where infrastructure adoption, installation, and commissioning is carried out on-demand basis. Sustainable development of data centers is the leading priority in the market. Construction and design are critical for data center operators due to the strict adherence to regulatory standards from the Uptime Institute.

Market Participants in the US Data Center Construction Market:

Key Construction Contractors

• AECOM
• Corgan
• DPR Construction
• Holder Construction
• Jacobs Engineering Group
• Syska Hennessy Group
• Turner Construction

Key Infrastructure Providers

• ABB
• Airedale Air Conditioning
• Eaton
• Schneider Electric
• STULZ
• Vertiv

Key Data Center Investors

• Apple
• COPT Data Center Solutions
• CyrusOne
• Digital Realty
• Equinix
• Facebook
• Google
• Microsoft
• Stream data center
• Vantage Data Center

Other ProminentConstruction Contractors are Balfour Beatty, BlueScope Construction, Clune Construction, Fluor Corp., Fortis Construction, Gensler, Gilbane Building Co., HDR, Hensel Phelps, HITT Contracting, Hoffman Construction, JE Dunn Construction, Morrison Hershfield, Mortenson Construction, Rogers-O’Brien Construction, Structure Tone, Walsh Group, and Whiting-Turner Contracting.

 Prominent Infrastructure Providers

• Altima Technologies
• Asetek
• Bloom Energy
• Caterpillar
• Cormant
• Cummins
• Cyber Power System
• Data Aire
• Delta Group
• FNT
• Generac Power System
• Green Revolution Cooling
• Hewlett Packard Enterprise
• HighPower
• Hitech Power Protection
• Legrand
• Nlyte Software
• Nortek Humidity
• Mitsubishi
• MTU On Site Energy
• Rittal
• Trane
• Tripp Lite

Prominent Data Center Investors

• CoreSite
• DataBank
• DC Blox
• EdgeConnex
• H5 Data Centers
• Quality Technology Services
• RagingWire
• Sabey Data Centers
• TierPoint
• T5 Data Center

Key market insights include:

The report provides the following insights into the US data center construction market for the forecast period 2019–2024.

1. It offers comprehensive insights on current industry trends, forecast, and growth drivers about the US data center construction market.
2. The report provides the latest analysis of market share, growth drivers, challenges, and investment opportunities.
3. It offers a complete overview of market segments and the regional outlook for US data center construction market.
4. The report offers a detailed overview of the vendor landscape, competitive analysis, and key market strategies to gain competitive advantage.