As of November 2025, there were a reported 4,165 data centers in the United States, the most of any country worldwide. A further 499 were located in the United Kingdom, while 487 were located in Germany. What is a data center? Data centers are facilities designed to store and compute vast amounts of data efficiently and securely. Growing in importance amid the rise of cloud computing and artificial intelligence, data centers form the core infrastructure powering global digital transformation. Modern data centers consist of critical computing hardware such as servers, storage systems, and networking equipment organized into racks, alongside specialized secondary infrastructure providing power, cooling, and security. AI data centers Data centers are vital for artificial intelligence, with the world’s leading technology companies investing vast sums in new facilities across the globe. Purpose-built AI data centers provide the immense computing power required to train the most advanced AI models, as well as to process user requests in real time, a task known as inference. Increasing attention has therefore turned to the location of these powerful facilities, as governments grow more concerned with AI sovereignty. At the same time, rapid data center expansion has sparked a global debate over resource use, including land, energy, and water, as modern facilities begin to strain local infrastructure.

Northern Virginia is by far the largest data center market in the United States when measured by total inventory. The region had capacity of almost ***** megawatts in the second half of 2024, up twelve percent on the previous year. The Atlanta region had the second-highest capacity, followed by Chicago. Northern Virginia could face a slowdown in construction Situated close to major east coast urban centers, the Northern Virginia region is considered a key hyperscale data center hub. The region had a reported ***** megawatts of data center capacity under construction as of the second half of 2024, far more than any other U.S. market. However, future expansion may be hindered by shifting local infrastructure conditions, with the growing impact of large-scale facilities leading local decision makers to reassess planning legislation. Rental rates on the rise The average monthly rental rate for data center capacity in primary U.S. markets surged to over **** per kilowatt in 2024. This is partially due to increased demand, with digital transformation driving the adoption of cloud services, and with the adoption of data intensive artificial intelligence (AI) applications. However, data centers operators are also experiencing difficulties in data center construction, as rising utilities costs and supply chain continue to apply pressure.

The size of the US Data Center Industry market was valued at USD XX Million in 2023 and is projected to reach USD XXX Million by 2032, with an expected CAGR of 6.00% during the forecast period. Recent developments include: February 2023: The expansion of Souther Telecom to its data center in Atlanta, Georgia, at 345 Courtland Street, was announced by H5 Data Centers, a colocation and wholesale data center operator. One of the top communication service providers in the southeast is Southern Telecom. Customers in Alabama, Georgia, Florida, and Mississippi will receive better service due to the expansion of this low-latency fiber optic network.December 2022: DigitalBridge Group, Inc. and IFM Investors announced completing their previously announced transaction in which funds affiliated with the investment management platform of DigitalBridge and an affiliate of IFM Investors acquired all outstanding common shares of Switch, Inc. for USD approximately USD 11 billion, including the repayment of outstanding debt.October 2022: Three additional data centers in Charlotte, Nashville, and Louisville have been made available to Flexential's cloud customers, according to the supplier of data center colocation, cloud computing, and connectivity. By the end of the year, clients will have access to more than 220MW of hybrid IT capacity spread across 40 data centers in 19 markets, which is well aligned with Flexential's 2022 ambition to add 33MW of new, sustainable data center development projects.. Key drivers for this market are: , High Mobile penetration, Low Tariff, and Mature Regulatory Authority; Successful Privatization and Liberalization Initiatives. Potential restraints include: , Difficulties in Customization According to Business Needs. Notable trends are: OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT.

The North America Data Center Market Report is Segmented by Data Center Size (Large, Massive, Medium, Mega, and Small), Tier Type (Tier 1 and 2, Tier 3, and Tier 4), Data Center Type (Hyperscale/Self-built, Enterprise/Edge, and Colocation), End User (BFSI, IT and ITES, E-Commerce, Government, Manufacturing, Media and Entertainment, and More), and Geography. The Market Forecasts are Provided in Terms of IT Load Capacity (MW).

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Data Center Market Size 2025-2029

The data center market size is valued to increase USD 535.6 billion, at a CAGR of 15.6% from 2024 to 2029. Rise in adoption of multi-cloud and network upgrades will drive the data center market.

Major Market Trends & Insights

North America dominated the market and accounted for a 35% growth during the forecast period.
By Component - IT infrastructure segment was valued at USD 109.40 billion in 2023
By End-user - BFSI segment accounted for the largest market revenue share in 2023

Market Size & Forecast

Market Opportunities: USD 248.77 billion
Market Future Opportunities: USD 535.60 billion
CAGR : 15.6%
North America: Largest market in 2023

Market Summary

The market represents a dynamic and continually evolving landscape, driven by the increasing demand for digital transformation and the adoption of advanced technologies. Core technologies, such as artificial intelligence (AI) and multi-cloud solutions, are revolutionizing data center operations, with AI implementation projected to increase by 40% by 2025. Meanwhile, applications in sectors like finance, healthcare, and retail are fueling the growth of data centers. Service types, including colocation, managed services, and cloud services, are adapting to meet the demands of these evolving applications.
Regulatory compliance, particularly around data security and privacy, remains a significant challenge. Despite these hurdles, opportunities abound, with the market expected to grow at a steady pace, particularly in regions like Asia Pacific and Europe, where digital transformation is accelerating.

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How is the Data Center Market Segmented and what are the key trends of market segmentation?

The data center industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

Component

  IT infrastructure
  Power management
  Mechanical construction
  General construction
  Security solutions


End-user

  BFSI
  Energy
  IT
  Others


Design

  Traditional
  Containerized
  Modular


Data Center Size

  Small and Medium Data Centers
  Large Data Centers


Tier Type

  Tier 1 and 2
  Tier 3
  Tier 4


Type

  Enterprise Data Centers
  Colocation Data Centers
  Cloud Data Centers
  Managed Data Centers
  Edge Data Centers


Geography

  North America

    US
    Canada


  Europe

    France
    Germany
    Italy
    UK


  Middle East and Africa

    UAE


  APAC

    China
    India
    Japan


  South America

    Brazil


  Rest of World (ROW)

By Component Insights

The it infrastructure segment is estimated to witness significant growth during the forecast period.

Data centers are essential IT infrastructure components that house the hardware and systems required to support the increasing demand for computing power and data storage. The market encompasses various technologies, including server hardware, storage infrastructure, software-defined data centers (SDDC), network infrastructure, converged infrastructure, backup and recovery software, automation software, and data center infrastructure management (DCIM) solutions. Enterprises worldwide are adopting cloud technologies, leading to a shift from on-premises data centers to cloud-based alternatives. This trend is fueled by the need for scalability, flexibility, and cost savings. According to recent reports, the adoption of cloud services has grown by 25%, with an estimated 30% of all workloads expected to be run in the cloud by 2022.

Moreover, the rise of edge computing and the Internet of Things (IoT) is driving the demand for bandwidth utilization and low latency, leading to the deployment of edge data centers. The uninterruptible power supply (UPS) systems market is projected to expand at a steady pace due to the increasing importance of ensuring data center uptime and minimizing downtime. Structured cabling systems and fiber optic cabling are essential for efficient data transfer and communication within data centers. The market for these systems is expected to grow by 12% due to the need for high-speed connectivity and the increasing adoption of advanced technologies like software-defined networking (SDN) and hyperconverged infrastructure (HCI).

Data center automation and virtual machine management are crucial for managing the complexity of modern data centers. These technologies are expected to experience a growth rate of 15%, driven by the need for efficient resource utilization and the increasing adoption of DevOps practices. The market for high-availability clusters and disaster recovery planning solutions is expecte

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US Data Center Construction Market Size 2025-2029

The US data center construction market size is forecast to increase by USD 15.02 billion at a CAGR of 10.8% between 2024 and 2029.

US Data Center Construction Market is experiencing significant growth due to the increasing number of data centers being constructed to meet the surging demand for digital services and cloud computing. This trend is driven by the shift towards remote work and learning, as well as the increasing adoption of Internet of Things (IoT) devices and advanced technologies such as artificial intelligence and machine learning. Another key trend in the market is the focus on constructing eco-friendly data centers. With growing concerns over energy consumption and carbon footprint, data center operators are investing in renewable energy sources and energy-efficient designs to reduce their environmental impact.
However, the market is not without challenges. Cybersecurity issues remain a major concern, with data centers being prime targets for cyber attacks due to the sensitive information they house. As such, data center operators must invest in robust security systems and implement strict access controls to mitigate these risks. However, cybersecurity challenges must be addressed to ensure the secure operation of these facilities. Companies seeking to capitalize on market opportunities should focus on energy efficiency, cybersecurity, and sustainability to stay competitive.

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US data center construction market is experiencing robust growth, driven by the increasing demand for advanced telecommunications infrastructure to support IT and telecommunications industries, government and defense sectors, 5G networks, cloud-based services, and edge data centers. This growth is reflected in the significant expansion of data center capacity, with a focus on electrical infrastructure, including UPS systems, and mechanical infrastructure, such as cooling systems. Edge data centers and edge computing are also gaining traction due to the need for real-time data processing and data-driven decision-making.
The market's size is substantial, with billions of dollars being invested annually. Physical damage from natural disasters and the increasing importance of advanced technology solutions are additional factors contributing to the market's momentum. Overall, the data center construction market is a dynamic and evolving sector, underpinned by the ongoing digital transformation and the growing importance of technology in various industries.

How is this market segmented?

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

Application

  Enterprise
  Cloud
  Colocation
  Hyperscale


End-user

  IT and telecom
  BFSI
  Government and defense
  Others


Infrastructure

  Electrical Infrastructure
  Mechanical Infrastructure
  Networking Infrastructure
  Power Distribution & Cooling Infrastructure


Geography

  US

By Application Insights

The enterprise segment is estimated to witness significant growth during the forecast period.

In today's digital economy, businesses across sectors including healthcare, finance, and IT are undergoing transformation through the adoption of cloud computing, big data analytics, IoT devices, and artificial intelligence (AI). The resulting surge in digital data from various sources necessitates the need for advanced data center infrastructure. Enterprise data centers must provide high-capacity storage and processing capabilities to manage and analyze vast volumes of data efficiently. This data is generated from sources such as social media, mobile devices, IoT sensors, and business applications. By deriving actionable insights from this data, businesses can support decision-making processes and optimize operations.

The electrical infrastructure of data centers includes UPS systems and other electrical infrastructure, while mechanical infrastructure comprises cooling systems. IT and telecommunications sectors are significant consumers of data center services, including cloud-based data storage, cloud applications, and AI algorithms. Government and defense sectors also utilize data centers for cloud-based healthcare solutions, smart devices, and disaster recovery protocols. The adoption of cloud computing and edge computing, 5G networks, and telecommunication providers' cloud-based services is driving the demand for data centers. However, data security and cyber threats, including data breaches, remain critical concerns. Innovative designs, modular power infrastructure, and OPEX savings through real-time monitoring software and free cooling techniques are essential

The United States Data Center Market Report is Segmented by Data Center Size (Large, Massive, Medium, Mega, and Small), Tier Standard(Tier 1 and 2, Tier 3, and Tier 4), Data Center Type (Hyperscale/Self-Built, Enterprise/Edge, and Colocation), End User Industry ( IT and ITES, E-Commerce, Government, Manufacturing, Media and Entertainment, and More), and Hotspot. The Market Forecasts are Provided in Terms of IT Load Capacity (MW).

In 2025, Equinix was the largest data center real estate investment trust (REIT) in the United States by market capitalization. The market cap of Equinix measured ***** billion U.S. dollars, about ** billion U.S. dollars higher than the second largest REIT Digital Realty. Over the past years, several notable acquisitions of data center REITs took place, including Blackstone's acquisition of QTS, KKR's acquisition of CyrusOne, and American Tower's acquisition of CoreSite.

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Hyperscale Data Center Market Size 2025-2029

The hyperscale data center market size is forecast to increase by USD 485.5 billion, at a CAGR of 38.4% between 2024 and 2029.

The market is experiencing significant growth, driven by the escalating demand for data center colocation facilities. Businesses are increasingly seeking to outsource their IT infrastructure to hyperscale data centers, which offer cost savings, improved scalability, and enhanced security. Additionally, advancements in infrastructure technologies, such as Artificial Intelligence (AI) and the Internet of Things (IoT), are fueling the need for more robust and efficient data center solutions. However, the market also faces challenges. The consolidation of data centers is intensifying competition, as major players continue to expand their offerings and acquire smaller competitors. Furthermore, the increasing complexity of managing large-scale data centers presents operational challenges, including energy efficiency, cooling systems, and network connectivity. Companies must navigate these obstacles to effectively capitalize on the market's potential and maintain a competitive edge. To succeed, they must focus on delivering innovative solutions that address the evolving needs of their customers while ensuring operational efficiency and cost-effectiveness.

What will be the Size of the Hyperscale Data Center Market during the forecast period?

Explore in-depth regional segment analysis with market size data - historical 2019-2023 and forecasts 2025-2029 - in the full report.
Request Free SampleThe market continues to evolve, with dynamic market activities shaping its landscape. Cloud storage solutions are increasingly being adopted, leading to data center consolidation and the rise of modular data centers. Power management and data center efficiency are key areas of focus, with an emphasis on renewable energy and green data centers. Cloud service providers are expanding their offerings, incorporating block storage, database services, and data analytics platforms. Data center construction and simulation tools are streamlining the design process, while data center interconnection and network security solutions are enhancing connectivity and protecting against cyber threats. High-performance computing and managed services are driving innovation in various sectors, including finance, healthcare, and research. Data sovereignty and data governance are becoming crucial considerations, with DNS management and IP addressing playing important roles in ensuring data privacy and compliance. Micro data centers and edge computing are gaining traction, extending data processing capabilities closer to the source. Hyperscale computing and load balancers are enabling scalable infrastructure, while hybrid cloud models and business continuity solutions are ensuring uptime and disaster recovery. Data center optimization, capacity planning, and virtualization technologies are optimizing network bandwidth and server utilization. Power usage effectiveness and water usage effectiveness are essential metrics, with building management systems and environmental monitoring solutions helping to reduce carbon footprint. Data center certifications and standards are ensuring best practices and driving industry growth. Cloud cost optimization and cloud migration are ongoing priorities, with infrastructure as code and machine learning solutions streamlining operations and reducing costs. Artificial intelligence and network switches are enhancing network performance and enabling new applications. Fiber optic cables and data center automation are improving network connectivity and efficiency. Overall, the market is characterized by continuous innovation and evolution, with a diverse range of applications and technologies shaping its future.

How is this Hyperscale Data Center Industry segmented?

The hyperscale data center industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments. TypeCritical infrastructureSupport infrastructureEnd-userBFSIEnergyITOthersComponentSolutionsServiceDeployment TypeGreenfieldBrownfield GreenfieldBrownfield Energy SourceRenewable EnergyUPS SystemsHybrid PowerEnergy StorageGeographyNorth AmericaUSCanadaEuropeFranceGermanyItalyUKMiddle East and AfricaUAEAPACChinaIndiaJapanSouth AmericaBrazilRest of World (ROW).

By Type Insights

The critical infrastructure segment is estimated to witness significant growth during the forecast period.In the dynamic data center market, design plays a crucial role in accommodating various technologies such as NoSQL databases, edge computing, DDoS protection, software-defined networking, content delivery networks, and more. Renewable energy and green data centers are increasingly prioritized to reduce carbon f

Data center colocation service companies have benefited from the increasing need for equipment, space and bandwidth to be rented to store servers. Over the past five years, these providers have experienced strong revenue growth as digitalization and AI continue to take hold, directly contributing to colocation services' demand. Companies that have digitized their operations now ask for bandwidth-intensive services, which ultimately require more data storage. COVID-19 accelerated this trend, with many businesses shifting to remote work and introducing new digital platforms. Over the past five years, revenue has risen at a CAGR of 4.3% to an estimated $17.1 billion, including an expected boost of 3.0% in 2025 alone. Despite rising wage and energy costs, however, industry profit has remained steady during the current period, only slightly fluctuating. With significant investments allocated to AI data center construction during the current period, providers are expanding their presence and have captured demand for third-party IT infrastructure management. As these trends have unfolded, companies within the industry are adjusting to technological innovation, shifting demand conditions and rising operating costs. Meanwhile, cyberattacks continue to threaten the reputation of many colocation providers, leading to significant defense investment. As the capacity requirements for data storage have increased, so has competition from technology conglomerates that use in-house operations to store servers. Still, demand for outsourced colocation services has grown during the period. Revenue is expected to continue rising over the next five years, albeit at a slightly slower pace. Stable growth in corporate profit and initiatives to enhance digital platforms will likely support revenue growth as companies can afford more data storage, increasing the need for colocation services. However, intensifying competition is expected to temper revenue growth as declines in the price of computers and peripheral equipment encourage companies to store data in-house. While government support will lead to expedited permitting and investments, support for data centers will continue to vary state to state as advanced AI facilities consume more power moving foward. Overall, revenue is anticipated to climb at a CAGR of 3.3% to an estimated $20.0 billion over the next five years.

Introduction

According to Market.us, The global data center construction market is expected to reach USD 453.5 Billion by 2033, representing a substantial Compound Annual Growth Rate (CAGR) of 6.7%. This growth trajectory reflects a significant increase from the valuation of USD 237.1 Billion in 2023.

The construction of data centers has become a pivotal aspect of modern infrastructure, catering to the exponentially growing demand for data processing and storage, driven by the surge in cloud computing, big data analytics, and the proliferation of digital services. The data center construction market is witnessing robust growth, characterized by the development of facilities that are not only scalable and efficient but also adhere to stringent standards of reliability and security. This expansion is propelled by the increasing reliance of businesses and governments on digital platforms, necessitating the availability of robust data handling capabilities.

From an analytical standpoint, several factors are driving the growth of the data center construction market. Firstly, the digital transformation initiatives across various sectors are augmenting the need for data centers, as organizations seek to harness the power of data for competitive advantage. Secondly, the advent of technologies such as 5G, Internet of Things (IoT), and artificial intelligence (AI) is further amplifying the demand for data processing power, thus fueling the construction of new data centers. Additionally, the emphasis on data sovereignty and the need for local data processing in compliance with regulatory requirements are prompting companies to invest in regional data centers, contributing to the market's expansion.

Opportunities within the data center construction market are vast and varied. There is a growing interest in green data centers, driven by the global push towards sustainability. This shift offers substantial opportunities for innovations in energy-efficient design, renewable energy integration, and advanced cooling systems, presenting a significant area for development and investment. Furthermore, the increasing complexity of data center architecture, coupled with the demand for high levels of security and reliability, opens avenues for advancements in construction methodologies, materials, and technologies. The adoption of modular and prefabricated data centers is another area of opportunity, offering flexibility and scalability while reducing construction time and costs.

As of the second half of 2024, ***** megawatts of data center capacity were under construction in Northern Virginia in the United States. Northern Virginia is a major hub for hyperscale data centers, though the immense pressure that such facilities are placing on local infrastructure could cause delays in further construction. The Atlanta area was the North American region with the second highest capacity under construction at ***** megawatts.

The Data Center Construction market is experiencing robust growth, projected to reach $78.16 million in 2025 and exhibiting a Compound Annual Growth Rate (CAGR) of 8.8% from 2025 to 2033. This expansion is fueled by several key drivers. The increasing adoption of cloud computing and the proliferation of big data are significantly boosting demand for data center infrastructure. Hyperscale data centers, requiring substantial construction investment, are a major contributor to this growth. Furthermore, the rise of edge computing, necessitating the construction of smaller, geographically distributed data centers closer to end-users, is further stimulating market expansion. The market is segmented by application (enterprise, cloud, colocation, hyperscale) and construction type (electrical, mechanical, general). While the precise market share of each segment is not provided, it's reasonable to anticipate that hyperscale applications will command a significant portion of the market due to their large-scale projects. Similarly, electrical and mechanical construction will likely hold the largest shares within the construction type segment due to the complex infrastructure requirements of data centers. North America and APAC (specifically China and Japan) are expected to be leading regional markets due to high tech industry concentration and supportive government policies promoting digital infrastructure development. Competitive intensity is moderate, with several leading companies vying for market share through strategic partnerships, technological advancements, and geographic expansion. However, challenges such as rising material costs and skilled labor shortages could potentially constrain market growth in the coming years. The forecast period of 2025-2033 reveals substantial potential for continued growth. Extrapolating from the 8.8% CAGR and the 2025 market size, we can project a considerable increase in market value by 2033. The market's trajectory will likely be influenced by advancements in sustainable construction practices and the increasing demand for energy-efficient data centers. Furthermore, geopolitical factors and regulations related to data sovereignty could impact regional growth dynamics. The market's success will hinge on the continued investment in digital infrastructure, innovation within the construction sector, and the ability of companies to address evolving customer needs and regulatory requirements. A focus on sustainable practices and addressing labor shortages will be crucial for long-term market viability.

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Modular Data Centers Market Size 2024-2028

The global modular data centers market size is forecast to increase by USD 42.56 billion, at a CAGR of 19.8% between 2023 and 2028. The need to streamline traditional data centers is a major factor fueling market growth. Today, companies running single conventional data centers grapple with complex management and soaring capital costs due to sophisticated power and cooling systems. With the current economic recession, businesses are increasingly seeking cost-effective and scalable solutions. Modular data centers, with their standardized, portable designs, provide an ideal alternative that can be quickly deployed. Mobile network operators and colocation providers are among the leading users of these solutions. These modular setups are more environmentally friendly, thanks to their energy-efficient HVAC systems and IT equipment. As big data, AI, cloud computing, 5G, and IoT applications require higher operating temperatures, the flexibility and scalability of modular designs become even more crucial.

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Market Segmentation

By End-user

IT and Telecom is the Leading Segment to Dominate the Market

The IT and telecom segment is estimated to witness significant growth during the forecast period. In the global market, Modular Data Centers hold a significant share, particularly in the IT and telecom sector. These centers are essential for providing the required computing power and storage for various applications and services in the industry. With the rise of cloud computing, the demand for data centers has escalated, as businesses seek to access resources without substantial capital expenditure. The IT and telecom segment was the largest and was valued at USD 4.02 billion in 2018. The influx of data from businesses and individuals necessitates data centers capable of handling vast amounts of information. Recession or not, Modular Data Centers offer scalability and rapid deployment, making them attractive to mobile network providers and data center colocation providers. Green data centers, with their standard design and cooling systems, are increasingly popular due to their energy efficiency. Big data, AI, cloud computing, 5G infrastructure, Internet of things, and cloud-based solutions are driving the market's growth.

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North America Holds a Prominent Position in the Market

North America is estimated to contribute 30% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The Edge computing trend is driving the growth of the market in the US and Canada, particularly in the BFSI industry. Large enterprises are shifting towards energy-efficient data centers to minimize costs and CAPEX, opting for cloud solutions from hyperscale providers like AWS, Microsoft, and Oracle. As of 2021, the US hosts over 2,670 data centers, making it the global leader. Quicksilver Capital and the World Economic Forum highlight the importance of digital transformation in this context. These offer Scalable data centers for large enterprises, enabling them to meet their computing capacity requirements efficiently.

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Market Dynamics and Customer Landscape

They have emerged as a popular solution for businesses seeking scalability and rapid deployment during times of economic uncertainty, such as a recession. These data centers utilize a modular design, allowing for easy expansion and contraction based on demand. Green data centers, which prioritize energy efficiency, are a key focus in the modular data center market. Mobile network providers and large enterprises are major consumers, as they require cloud-based networking and 5G infrastructure to support digital transformation initiatives. The solutions sub-segment and services segment of the modular data center market are expected to grow significantly, as businesses increasingly turn to cloud-based solutions for their data storage and processing needs. The World Economic Forum has the importance of energy-efficient data centers in reducing carbon emissions and mitigating the environmental impact of digitalization. Quicksilver Capital and other investors have shown interest in the modular data center market, recognizing its potential for innovation and growth. Overall, the modular data center market is poised for expansion, driven by the need for scalable, energy-efficient, and quickly deployable solutions.

Key Market Driver

Requirement to reduce complexity of traditional data centers is notably driving market growth. In today's business landscape, enterprises operating a single traditional data center face increasing complexi

In 2024, among the selected regions, Oregon had the most live IT capacity of data centers in the United States. However, the Southeast of the United States is expected to take Oregon's spot in the ranking in the future. Particularly, Atlanta (Georgia) along with its metro area is the largest data center hub in the Southeast.

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Data Center Construction Market Size 2025-2029

The data center construction market size is valued to increase USD 41 billion, at a CAGR of 8.8% from 2024 to 2029. Rising demand for data center colocation facilities will drive the data center construction market.

Major Market Trends & Insights

Europe dominated the market and accounted for a 32% growth during the forecast period.
By Application - Enterprise segment was valued at USD 23.20 billion in 2023
By Type - Electrical construction segment accounted for the largest market revenue share in 2023

Market Size & Forecast

Market Opportunities: USD 70.71 billion
Market Future Opportunities: USD 41.00 billion
CAGR : 8.8%
Europe: Largest market in 2023

Market Summary

The market is a dynamic and continuously evolving sector, driven by the rising demand for colocation facilities and the growing focus on constructing energy-efficient, or 'green,' data centers. According to recent reports, the global data center colocation market is projected to reach a 35% market share by 2025, underscoring its significant growth potential. However, the industry faces challenges such as high power consumption, which accounts for approximately 2% of global electricity use. To address this issue, there is a push towards adopting advanced core technologies, including renewable energy sources and energy-efficient cooling systems.
Additionally, regulatory compliance and regional variations add complexity to the market landscape. For instance, European data centers must adhere to strict energy efficiency regulations, while the Asia Pacific region is witnessing significant growth due to increasing digital transformation initiatives.

What will be the Size of the Data Center Construction Market during the forecast period?

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How is the Data Center Construction Market Segmented and what are the key trends of market segmentation?

The data center construction industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

Application

  Enterprise
  Cloud
  Colocation
  Hyperscale


Type

  Electrical construction
  Mechanical construction
  General construction


Geography

  North America

    US
    Canada


  Europe

    France
    Germany
    Italy
    UK


  APAC

    China
    Japan
    South Korea


  South America

    Brazil


  Rest of World (ROW)

By Application Insights

The enterprise segment is estimated to witness significant growth during the forecast period.

In today's digital economy, the demand for robust data center infrastructure continues to escalate as businesses and consumers generate an unprecedented volume of structured and unstructured data. Approximately 60% of enterprises worldwide are reported to have increased their data center capacity in the last three years, while 40% plan to do so in the next two years. The need for high-performance computing systems has become crucial to support the extensive transformation of existing data center infrastructure, including network, cooling, and storage. Environmental monitoring, redundancy and failover, HVAC infrastructure design, security access control, risk assessment mitigation, generator backup power, IT infrastructure deployment, structural engineering design, remote hands support, project timeline management, server rack density, capacity planning strategies, raised floor systems, permitting and approvals, mechanical system design, physical security measures, construction cost estimation, disaster recovery planning, cable management strategies, network infrastructure cabling, building automation systems, power usage effectiveness, critical infrastructure design, precision cooling systems, thermal management solutions, sustainability certifications, electrical system design, energy efficiency metrics, fire suppression systems, uninterruptible power supply, power distribution units, and building code compliance are all integral components of modern data centers.

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The Enterprise segment was valued at USD 23.20 billion in 2019 and showed a gradual increase during the forecast period.

As businesses continue to prioritize digital transformation, the market is expected to witness significant growth. According to recent estimates, the market is projected to expand by 18% in the upcoming year, with a further 21% increase anticipated within the next five years. These figures underscore the continuous evolution and expansion of the data center industry, driven by the increasing demand for scalable and efficient infrastructure solutions.

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Regional Analysis

Europe is estimated to contribute 32% to the growth of the global marke

North America Hyperscale Data Center Market is Segmented by Data-Center Type (Hyperscaler Self-Build, Hyperscale Colocation), Component (IT Infrastructure, Electrical Infrastructure, and More), Tier Standard (Tier III, Tier IV), End-User Industry (Cloud and IT, Telecom, and More), Data-Center Size (Large ≤25 MW, and More), and Geography. The Market Forecasts are Provided in Terms of Value (USD) and Volume (MW).

Northern California's data center market booms, projected to reach $XX billion by 2033. Explore key drivers, trends, and challenges shaping this lucrative sector, including hyperscale growth, edge computing, and competition for resources. Discover leading data center providers and regional market analysis in this comprehensive overview. Recent developments include: October 2022: Northern California, also known as Silicon Valley, ranked second for Data Center leasing activity in the first half of 2022. The region increased its capacity by 10% supply in H1 2022. However, it experienced record-low vacancy at 1.3%; silicon valley remains the tightest data center market in the U.S., April 2023: RICloud entered the data center market in San Jose in 2021. Silicon Valley now has 17 similar facilities under construction in the region. This has increased the capacity of silicon valley by a whopping 688MW which is in the works., January 2022: Prime Data Centers publicized its plans for the site on Comstock Street in Santa Clara, next to its current assets. The construction is anticipated to begin in the second half of 2023; the facility is expected to have a total of 9MW capacity at 74,000 sf.. Notable trends are: Growing cloud applications, AI, and Big Data are expected to fuel the market growth.

According to the Cognitive Market Research Report, the Data Center Interconnect Market size in 2023 was XX Million and is projected to have a compounded annual growth rate of XX% from 2024 to 2031. Furthermore, the rising number of data centers and increased use of cloud storage is driving the market expansion. The Datacenter Interconnect market is further segmented by type and end-use. The hardware type and Communications Service Providers dominate their particular segment. Europe accounted for the highest revenue share in the year 2023. The expanding number of data centres, increased investment in cloud technologies, and the development of end-user markets are among the primary reasons driving European data centres' investment in the interconnect industry. Leading market companies are investing extensively in R&D to extend their product lines, which will fuel further growth in the data centre interconnect market. Market participants are also engaged in a variety of strategic initiatives to broaden their worldwide presence, including new product releases, contractual agreements, mergers and acquisitions, increased investments, and collaboration with other organizations.

Market Dynamics of Data Center Interconnect

Key Drivers for Data Center Interconnect Market

Increasing Number of Data Centers to Drive Market Growth for Data Centre Interconnect: Data centres, with house computers for data storage and processing, have expanded fast in response to increasing demand. The United States has more data centres than any other market, as it is home to major data producers and consumers such as Facebook, Amazon, Microsoft, and Google. Data servers and data centres are in high demand due to increased data output and utilization across sectors. According to CloudScene data6 from 110 countries, there were almost 8,000 data centres worldwide. Six nations account for the bulk of data centres which are the United States (33%), the United Kingdom (5.7%), Germany (5.5%), China (5.2%), Canada (3.3%), and the Netherlands (3.4%). OECD member nations account for 77%, while NATO members account for around 64%. Furthermore, data centre service providers are increasing their colocation and cloud offerings. End-user firms (such as telecom and financial organizations) that choose to establish their data centres are primarily responsible for the interconnected data centre sector becoming a worldwide investment hotspot. Due to data centre expansion and spread, enhanced fibre utilization, and low-cost pluggable modules, industries, namely OTT, ISPs, the financial industry, and the public sector, are creating use cases for DCI networks. The proliferation of data centres is also fueling a surge in DCI, which helps businesses to link their data centres, cloud providers, and other data center operators for easier data and resource sharing. Hence with such rise of data centers and the benefits provided drive the market growth.

Increased use of cloud storage and adoption of cloud-based solutions: Cloud-based storage solutions are today's most practical and effective way to keep data online. There are various cloud computing solution vendors. Because this industry is so large, every major technology business now has its own data centre, which dramatically boosts user income. The migration to cloud-based solutions, as well as the increase in organizational data traffic and big data analytics, are expected to drive development in the data centre interconnect market. Backup and storage are becoming increasingly important as the quantity of data created grows.
Data centre interconnect tools to enable communication and information exchange between its linked components, as well as the data centres' internal and external networks. Companies employ these solutions to establish solid connections between data centres and their linked devices, allowing for faster and more secure data transfers. Furthermore, the usability and accessibility of cloud-based apps have contributed to the expansion of the data centre interconnect industry. For instance, Equinix is a leading global provider of digital infrastructure. They link industry-leading organizations in banking, manufacturing, retail, transportation, government, healthcare, and education in a digital-first world. Business leaders use their trusted worldwide platform to safely and sustainably link the core infrastructur...

The United States Data Center Power Market is Segmented by Component (Electrical Solutions, Services), Data Center Type (Hyperscaler/Cloud Service Providers, Colocation Providers, and More), Data Center Size (Small Size Data Centers, Medium Size Data Centers, Large Size Data Centers and More), Tier Type (Tier I and II, Tier III, Tier IV). The Market Forecasts are Provided in Terms of Value (USD)