A Concise Overview of Data Center Construction Market in Terms of the Initiatives Undertaken by Regional Governments & Leading Industry Participants

April 23, 2018

As an inherent vertical of the IT & telecom space, data center construction market has already, since the last many years, established itself as a highly profitable industry. In an era where technology is king and data storage is the subsequent priority, the demand for data centers has gone up several notches higher than ever before. Another factor that has been augmenting the demand for data centers is the surging adoption of IoT, cloud computing, machine learning, and other internet applications.

With digital data storage gaining exceptional prominence in recent times, data centers have become the need of the hour in the tech space. Having recognized this potential requirement, numerous companies in Data Center Construction Market have been undertaking appreciable measures to establish new facilities. The requirement has also been taken note of by government bodies, that are leaving no stone unturned to support regional companies and establish a smart data center infrastructure. In this regard, a couple of instances demonstrating the interest of both the private and public sector parties have been outlined below.

Norwegian government to increase investment in regional data center construction market

Leading tech companies such as Apple, Google, and Facebook have already made substantial investments across Denmark and Sweden to deploy data centers. In a bid to establish itself as a leading location for IT-data center operations and stay ahead of its neighboring rivals, the country of Norway seems to have undertaken a highly strategic initiative. The Norwegian government has launched the NADCN (Norway As A Data Center Nation) plan through which it plans to lure major IT behemoths in the country for data center construction. The government will also be offering support in terms of capital, tax benefits and reform legislatures in order to fast-track the construction process, thereby impelling the regional data center construction industry outlook.

The main intention of the NADCN here is to generate an integrated and sustainable approach in the development of data center infrastructure. The Norwegian government has also prioritized a few policies to promote data-driven value creation and digital innovation. It is rather overt therefore, that through this regulatory support and integrated infrastructure development plan, the Norwegian government will ensure that major data center construction market giants would soon deploy their facilities across Norway.

Zenium plans to expand its stance in the regional data center construction industry

In order to extend its reach across European countries, Zenium, a highly coveted data center construction market player, is planning to establish its third data center in U.K. Apart from this, it also acquired the real estate investment firm, CyrusOne for USD 442 million. Incidentally, since CyrusOne is one of the leading investors in data centers and IT infrastructure, post this acquisition, Zenium was found to have strengthened its portfolio in data center construction market.

Speaking along the same lines, it is prudent to mention that UK has emerged as a primary growth ground for major data center construction industry firms, owing to availability of world-class technical space with excellent IT load capacity in the region. Following Zenium’s footsteps, as numerous other companies continue to plan their investments in developed economies, the revenue graph of data center construction market would most certainly take an upturn. Additionally, the establishment of new data center facilities would generate commendable opportunities for system integrators, multinational corporations, and cloud providers.

Merely a few days ago, VINCI Energies, the subsidiary of the UK construction company VINCI, purchased Wah Loon Engineering, a specialist company in mechanical and electrical projects based in Singapore. The company invested close to USD 201.62 million, precisely to extend its reach in data center construction market across APAC. In fact, this deal has seemingly strengthened VINCI’s business activities across Asia Pacific region. Furthermore, the continent has also been exhibiting a rise in the digitalization trends and increasing investments in the IT and telecommunication sectors, which in consequence would prove highly lucrative for data center construction market players.

With the globally escalating penetration of digital services, tech companies are likely to leverage business growth opportunities in data center construction market. In addition, the infrastructure development strategies of regional governments would add to the commercialization graph of this business space as well. As myriad geographies across the globe ready themselves for a technologically inclined industrial sphere, the demand for data centers and other electronic components would observe an upsurge. Driven by the increasing preference for smart technology and the cloud space, data center construction market is likely to amass considerable revenue by 2022.

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