The market for data centre construction is estimated to be valued at around £1.1bn in 2013, following two years of exceptionally high level growth. However, while take-up rates continue to increase, data centre construction output is likely to fall from 2014 onwards as demand is absorbed by the relatively high levels of existing vacant space.
performance has otherwise been variable, with falls during 2009 and 2010 as a
result of the economic downturn affecting a number of key sectors for data
centres, such as financial services and retail. Subsequently there was a return
to growth in 2011, and data centre construction activity was at a very high
level throughout 2012 and into 2013.
was due to the growing interest in cloud computing in combination with
improving business confidence, which led to a release of projects previously on
hold. Energy efficiency is another key driver of market growth. The effects of
improving energy efficiency in data centres can be seen immediately, bringing
the additional benefit of substantial savings on operational costs, of which
power accounts for a large share. This has driven demand for modular solutions,
from rack-based solutions to complete data centre pods and containerised
key trend that may affect the market negatively in the longer term is that of data
centre consolidation. The government, as well as a number of private
businesses, have announced plans to consolidate their data centre estates and
move operations to fewer, larger and more efficient data centres. The full impact
of this is yet to be seen in the market.
terms of contractors, the data centre construction market is extremely fragmented.
While most large M&E contracting businesses are key players, companies
involved in data centre construction range from major building contracting
groups and commercial developers, to data centre specialists and operators,
modular building manufacturers and IT equipment suppliers. It is likely that
further consolidation will take place among operators, specialists and
construction/engineering firms in the near future, as the market remains
characterised by a large number of new entrants and small market shares, even
among the established leading players.
is expected to continue to grow, particularly from technology, media and
content providers, with the financial sector also expected to pick up following
some definitive signs of economic recovery in early 2014. However, much of this
demand is likely to be absorbed by existing vacant data centre space as more
businesses opt for the co-location model. The impact of the government’s data
centre consolidation project is likely to lead to a reduction in the value of
RMI and upgrade spend in the sector from 2015 onwards.
is estimated that between 2014 and 2016 the market will continue to decline in
value terms, however, by 2017 it is expected that the amount of vacant space
will have reduced and build levels will have started to rise again. The market
is forecast to once again exceed £1bn by the end of 2018.
Taylor, Director of AMA Research, said: “It
appears that data centre construction is emerging as a significant sector in
its own right, and one key trend seen over the past 2-3 years is that of
integrated service offerings. Commercial operators and data centre specialists
now offer a wider range of construction services and product/equipment
suppliers are targeting whole ranges specifically at the data centre sector.
These often include software solutions for monitoring and management as well as
design & build services.”
Centre Construction Market Report - 2014-2018 Analysis’ report is published
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