The global data center construction market is expected grow at a CAGR of more than 12% during the period 2016-2020, according to Technavio’s latest report.

In this report, Technavio covers the market outlook and growth prospects of the global data center construction market for 2016-2020. The report also presents the vendor landscape and a corresponding detailed analysis of the major vendors operating in the market. It includes vendors across all geographical regions. The report provides the performance and market dominance of each of the vendors in terms of experience, product portfolio, geographical presence, financial condition, R&D, and customer base.

“The data center construction market is growing significantly with major contributions by cloud service provider (CSPs) and telecommunication and colocation service providers worldwide. The increased construction is facilitated by the increased demand for cloud-based service offerings and big data analytics driven by the stronger growth of data through connected devices in the form of the IoT,” says Rakesh Kumar Panda, a lead data center research expert from Technavio.

Technavio’s ICT research analysts segment the global data center construction market into the following regions:

• Americas
• EMEA
• APAC

In 2015, with a market share of close to 45%, Americas dominated the global data center construction market, followed by EMEA at around 34% and APAC with a little over 21%.

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Americas: largest data center construction market
The global data center construction market in the Americas is expected to exceed USD 26 billion by 2020, growing at a CAGR of almost 7%. In the Americas, the US leads the data center spending market. Compared to the past two years, the construction of new data centers has decreased in the country, however, the investment in data center construction has grown with additional investment inrenewable energy sources for data center operations. Most of the data centers in operation in the US are owned by global CSPs, colocation and managed hosting services vendors, and telecommunication organizations.

The US is home to the headquarters of many Fortune 500 companies such as Google, Microsoft, Facebook, Apple, and AWS. There are also few data center infrastructure vendors such as Dell, HP, and IBM.

Canada and Latin America have fewer data center operations than the US. In Canada, large enterprises such as Cogeco Data Services and IBM as well as colocation vendors such as Equinix operate data centers. In Latin America, a considerable number of data centers are being built and operated by telecommunication organizations such as Telefonica and CSPs such as AWS, IBM, and Microsoft.

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EMEA: increased construction of data centers to keep pace with growing smart cities
The global data center construction market in EMEA is expected to exceed USD 28 billion by 2020, growing at a CAGR of more than 14%.

Western Europe has a strong penetration of colocation and managed hosting data centers. Companies such as Daimler, BMW, and Audi along with telecommunication providers such as British Telecom and Deutsche Telekom, and CSPs such as Google and Microsoft operate a few large data centers in the region. The customer base for CSPs and colocation vendors is growing rapidly with the growing adoption of cloud-based services by SMEs. Apart from Western Europe, Cooperation Council for the Arab States of the Gulf countries are also experiencing increased construction of data centers with the growing number of smart cities and enterprises.

There will be a considerable increase in the colocation and managed service hosting facilities through local as well as global vendors in EMEA. Global enterprises are planning to construct new data centers or expand existing ones by powering operations through renewable energy sources, especially in Sweden, Norway, and Finland. Huawei has entered into an alliance with Drake and Skull International for ICT development for the construction of data center facilities in Gulf Cooperation Council countries. In Africa, investment in submarine cables to improve connectivity will lead to the growth of data center construction in the continent.

APAC: fastest growing data center construction market
The global data center construction market in APAC is expected to reach USD 20 billion by 2020, growing at a CAGR of more than 17%. The significance of data center operations among large enterprises and government agencies in countries across APAC is rising. A few data centers are already being operated by CSPs and colocation vendors. Telecommunications vendors such as NTT and China Telecom and certain global IT service organizations operate the majority of the data centers in the region.

APAC is experiencing an increase in data center construction by local and global enterprises. Microsoft and AWS have opened data centers in India due to the growing customer base in the country. “In various countries in APAC, data center constructions are also undertaken by global colocation and managed hosting service providers, government agencies, and telecommunication organizations to support the growing businesses and consumers,” says Rakesh.

The top vendors in the global data center construction market highlighted in the report are:

• AECOM
• Arup Group
• Corgan Associates
• DPR Construction
• Gensler
• HDR Architecture

Source: Technavio
with Business Wire