North America Data Center Construction Market By Type of Data Center (Hyperscale Data Centers, Colocation Data Centers, Enterprise Data Centers, Edge Data Centers), By Construction Type (New Construction, Expansion, Retrofit/Upgrade), By Power Capacity (Small Data Centers, Medium Data Centers, Large Data Centers), By Service Type (Design & Consulting, Construction & Installation, Project Management), By End-User Industry (IT & Telecommunications, BFSI, Healthcare, Retail & E-Commerce, Others), By Country, Competition, Forecast and Opportunities, 2020-2030F

Market Overview

The North America Data Center Construction Market was valued at USD 76.56 Billion in 2024 and is expected to reach USD 110.76 Billion by 2030 with a CAGR of 6.19% during the forecast period. The North America data center construction market is experiencing robust growth driven by a surge in demand for digital infrastructure and advanced technological capabilities. As businesses and organizations increasingly rely on cloud computing, big data, artificial intelligence (AI), and Internet of Things (IoT) technologies, the need for reliable, scalable, and high-performance data centers has escalated. This demand is particularly pronounced in the United States and Canada, which are key hubs for data center development due to their advanced technological landscapes, stable political environments, and robust economic conditions. The USD 310 billion valuation of North America's public cloud market in 2023 accelerates the demand for robust data center infrastructure. As enterprises increasingly shift to cloud services, there is a heightened need for new data centers to support cloud storage, processing, and management. This surge in demand for cloud services directly drives growth in the North America Data Center Construction Market.

The market is characterized by a diverse range of data center types, including hyperscale, colocation, enterprise, and edge data centers. Hyperscale data centers, operated by major cloud service providers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud, represent a significant portion of the market. These facilities are designed to handle massive data loads and provide scalable solutions for a global clientele. Colocation data centers also play a crucial role, offering flexible and cost-effective space for multiple businesses to share infrastructure while maintaining operational efficiency.

A major trend in the market is the growing emphasis on sustainability and energy efficiency. As environmental regulations become stricter and organizations aim to reduce their carbon footprints, there is an increased focus on incorporating green technologies and renewable energy sources in data center construction. This shift is driving the adoption of energy-efficient designs, advanced cooling systems, and sustainable building materials.

The market is also witnessing a rise in data center construction projects focused on edge computing. Edge data centers, positioned closer to end-users, are designed to minimize latency and enhance the performance of applications that require real-time data processing. This trend is driven by the growing use of IoT devices and the need for faster data transmission in industries such as healthcare, manufacturing, and autonomous vehicles.

Key Market Drivers

Growth in Cloud Computing and Digital Services

The exponential growth in cloud computing and digital services is a primary driver of the North America data center construction market. As enterprises and consumers increasingly rely on cloud-based solutions for data storage, processing, and application hosting, the demand for data center infrastructure has surged. Major technology companies, including Amazon Web Services (AWS), Microsoft Azure, and Google Cloud, are expanding their data center footprints to accommodate the growing volume of data and ensure high availability and performance. This trend is fueled by the proliferation of data-driven applications, the need for scalable storage solutions, and the shift towards digital transformation across various industries. As businesses adopt cloud strategies to enhance operational efficiency and flexibility, the need for robust and scalable data center facilities continues to drive market growth. The surge in data generation and the increasing shift of 60% of enterprise workloads to cloud platforms are driving demand for more data center capacity. This transition amplifies the need for advanced data center infrastructure, including construction of new facilities. As businesses scale their cloud operations, the North America Data Center Construction Market is poised for significant growth to support expanding storage and processing requirements.

Rise in Big Data and Analytics

The increasing emphasis on big data and analytics is a significant driver for the North America data center construction market. Organizations are investing heavily in data analytics to gain insights, make data-driven decisions, and maintain a competitive edge. The growing volume of data generated by various sources, including IoT devices, social media, and enterprise applications, necessitates the development of data centers with high-capacity storage and processing capabilities. Data centers equipped to handle large-scale data analytics, including advanced computing power and high-speed data transfer, are in high demand. This trend is driving the construction of new data centers and the expansion of existing facilities to support the storage and processing needs associated with big data initiatives.

Increased Focus on Sustainability and Energy Efficiency

Sustainability and energy efficiency are becoming critical drivers in the North America data center construction market. As environmental regulations tighten and organizations prioritize green initiatives, there is a growing demand for data centers that minimize energy consumption and reduce carbon footprints. The integration of renewable energy sources, energy-efficient cooling systems, and sustainable building materials is increasingly prevalent in new data center projects. Companies are adopting advanced technologies such as liquid cooling, power usage effectiveness (PUE) monitoring, and energy-efficient lighting to enhance operational efficiency and meet sustainability goals. This focus on green data center construction not only helps organizations comply with regulations but also provides cost savings and enhances their corporate social responsibility profiles. Companies are increasingly investing in energy storage systems and on-site renewable energy generation. For example, Google and Microsoft have committed to achieving 100% renewable energy utilization for their data centers by 2030, influencing the demand for energy-efficient construction practices. 

Expansion of Hyperscale Data Centers

The expansion of hyperscale data centers is a key driver of the North America data center construction market. Hyperscale data centers are characterized by their massive scale and capacity, designed to support the infrastructure needs of large cloud service providers and enterprises with significant data processing requirements. These facilities are optimized for high-density computing, scalability, and efficiency, making them essential for meeting the growing demand for cloud services, online applications, and digital storage. The continuous investment by major technology companies in hyperscale data centers is fueling market growth, as these organizations seek to enhance their infrastructure to support global operations and provide high-performance services to their customers.

Download Free Sample Report

Key Market Challenges

Rising Energy Costs

One of the significant challenges facing the North American data center construction market is the escalating cost of energy. Data centers are energy-intensive facilities, with power requirements for servers, cooling systems, and other infrastructure components. As the demand for data processing and storage grows, so does the energy consumption, leading to higher operational costs. In regions where energy prices are volatile or increasing, this can significantly impact the overall cost of running data centers. To mitigate these costs, data center operators are investing in energy-efficient technologies and renewable energy sources. However, balancing energy efficiency with operational demands remains a complex and costly challenge.

Environmental Regulations

Stricter environmental regulations pose a challenge to data center construction in North America. Governments and regulatory bodies are implementing more rigorous standards for energy efficiency, emissions, and sustainability. Compliance with these regulations requires substantial investment in green technologies, such as advanced cooling systems and renewable energy sources. Additionally, meeting these environmental requirements can increase construction and operational costs, affecting profit margins. Data center operators must navigate a complex regulatory landscape while striving to achieve sustainability goals and maintain competitive advantage.

Site Selection and Real Estate Costs

Selecting appropriate sites for data center construction is increasingly challenging due to the high costs and competition for real estate. Data centers require locations with reliable power supply, robust telecommunications infrastructure, and favorable climate conditions to optimize cooling efficiency. In urban areas, real estate costs are particularly high, making it difficult to secure affordable land for large-scale facilities. Finding sites that meet all technical and regulatory criteria can be a time-consuming and costly process. As demand for data centers grows, the competition for prime locations intensifies, further driving up costs.

Talent Shortage

The data center construction industry faces a significant challenge in the form of a skilled labor shortage. Building and maintaining advanced data center infrastructure requires specialized skills in areas such as electrical engineering, cooling systems, and IT infrastructure. The rapid pace of technological advancement and the growing complexity of data center designs exacerbate the shortage of qualified professionals. This talent gap can lead to delays in project timelines, increased labor costs, and potential challenges in maintaining high standards of quality and safety.

Technological Obsolescence

Technological obsolescence is a critical challenge for data center construction. The rapid evolution of technology means that data centers must be designed to accommodate future advancements and evolving standards. This requires continuous investment in upgrading infrastructure and ensuring compatibility with emerging technologies. Data center operators face the risk of their facilities becoming outdated or inadequate to meet future demands, leading to additional costs for retrofitting or replacing equipment. Staying ahead of technological trends while managing construction and operational costs is a delicate balance that data center developers must navigate.

Key Market Trends

Rise of Hyperscale Data Centers

The North America data center construction market is increasingly dominated by hyperscale data centers. These facilities, characterized by their massive scale and high-capacity requirements, are primarily driven by the burgeoning demand for cloud computing, big data analytics, and artificial intelligence. Major technology companies, such as Amazon Web Services, Microsoft Azure, and Google Cloud, are leading this trend by building expansive data centers to support their growing customer bases. Hyperscale data centers offer the advantage of high efficiency, scalability, and cost-effectiveness, enabling operators to handle vast amounts of data and provide robust services. The trend towards hyperscale facilities is also influencing market dynamics by driving innovations in power and cooling systems, modular design, and energy efficiency, as these large-scale operations require advanced infrastructure solutions to ensure optimal performance and reliability.

Focus on Sustainability and Energy Efficiency

Sustainability and energy efficiency have become central themes in the North America data center construction market. With increasing pressure from regulatory bodies and stakeholders to reduce carbon footprints, data center operators are investing heavily in green technologies and sustainable practices. This trend includes the adoption of renewable energy sources, such as solar and wind power, and the implementation of energy-efficient designs and cooling systems. Advanced cooling technologies, such as liquid cooling and free cooling, are being utilized to minimize energy consumption and operational costs. Data center operators are focusing on sustainable building materials and practices to achieve LEED certification and meet other environmental standards. This shift towards sustainability is not only driven by regulatory compliance but also by the growing demand from customers for environmentally responsible operations.

Expansion of Edge Data Centers

The expansion of edge data centers is a notable trend in the North America market, driven by the need for low-latency data processing and real-time applications. As the Internet of Things (IoT) and smart technologies proliferate, there is a growing demand for data centers located closer to end-users to reduce latency and improve performance. Edge data centers address this need by providing localized data processing and storage, enhancing the efficiency of applications that require rapid data access. This trend is particularly relevant for industries such as autonomous vehicles, smart cities, and industrial automation, where real-time data processing is crucial. The growth of edge computing is leading to the construction of smaller, distributed data centers that complement larger hyperscale facilities and contribute to a more resilient and responsive data infrastructure.

Segmental Insights

Type of Data Center Insights

Colocation Data Centers segment dominated in the North America Data Center Construction market in 2024. One of the primary reasons for the dominance of colocation data centers is the increasing demand for scalable and flexible infrastructure solutions. Businesses across various industries are shifting from owning and operating their own data centers to leasing space in colocation facilities. This shift is largely driven by the desire to reduce capital expenditure and operational complexity. By opting for colocation, companies can leverage shared infrastructure while avoiding the significant upfront costs and ongoing maintenance associated with building and managing their own data centers.

Colocation data centers offer significant advantages in terms of scalability. As businesses experience growth or fluctuations in data needs, they can easily scale their operations up or down without the constraints of fixed infrastructure. This flexibility is particularly attractive in today’s rapidly evolving technological landscape, where companies must be agile to stay competitive.

Colocation data centers provide enhanced reliability and uptime, which is critical for businesses that rely on uninterrupted data access and processing. These facilities are equipped with redundant power supplies, cooling systems, and network connectivity, ensuring high levels of operational resilience. For many organizations, particularly those in sectors like finance, healthcare, and e-commerce, the high availability and reliability of colocation centers are essential for maintaining business continuity and compliance with regulatory standards.

The growing trend towards digital transformation and cloud computing has also fueled the demand for colocation data centers. As organizations increasingly adopt cloud services and hybrid IT environments, colocation facilities offer a strategic advantage by providing direct connectivity to multiple cloud service providers and network carriers. This connectivity is crucial for optimizing performance and achieving efficient data management. The concentration of major colocation providers, such as Equinix, Digital Realty, and CyrusOne, in North America has bolstered the segment’s prominence. These leading companies are continually expanding their portfolios and enhancing their offerings to meet the evolving needs of businesses, further solidifying the dominance of colocation data centers in the market.

Download Free Sample Report

Country Insights

United States dominated the North America Data Center Construction market in 2024. The U.S. remains a global technology hub, with its robust digital economy and a high concentration of major technology companies, including cloud service providers, e-commerce giants, and financial institutions. These organizations demand large-scale, high-performance data centers to support their operations, driving substantial investment in data center construction. The presence of industry leaders such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud necessitates the development of expansive and advanced data center facilities to meet their growing needs.

The United States benefits from a well-developed infrastructure, including advanced telecommunications networks and reliable power supplies, which are essential for supporting large-scale data centers. This infrastructure provides a strong foundation for data center development and enhances the attractiveness of the U.S. as a prime location for data center investments. The U.S. regulatory environment and business climate are conducive to data center development. Federal and state-level policies often support technological innovation and infrastructure expansion, offering incentives such as tax breaks and energy-efficient grants. These incentives encourage both domestic and international companies to invest in data center construction and expansion within the country.

The growing demand for cloud computing, big data analytics, and artificial intelligence further drives the need for data centers. As businesses across various sectors increasingly adopt these technologies, the demand for reliable and scalable data center solutions rises, contributing to the market’s growth. The U.S. data center market benefits from its geographic diversity, with major data centers spread across key locations, including Northern Virginia, Dallas, and Silicon Valley. This geographic distribution enhances the market’s resilience and supports various industry needs, from high-frequency trading to content delivery.

Recent Developments

• In June 2024, Africa Data Centres (ADC) and Onix Data Centres announced a strategic partnership to develop a new data center in Accra, Ghana. The planned facility will boast a capacity of 30MW, although additional specifications and a completion timeline remain undisclosed. This development follows ADC’s 2021 commitment to invest USD 500 million in digital infrastructure across ten African nations, with the Accra site being a key component of this expansion. ADC, a member of the Cassava Technologies group, secured the land for this project in May 2023. The collaboration highlights a significant step in enhancing data center infrastructure in the region.
• In January 2024, Digital Realty unveiled its latest data center, MAA10, in Chennai, setting a new benchmark for India's data center industry. This state-of-the-art facility is designed to support the growing demand for high-performance data infrastructure in the region. MAA10 incorporates cutting-edge technology and advanced sustainability features, positioning it as a leading example of innovation in data center design and operation. The launch underscores Digital Realty’s commitment to expanding its footprint in India and delivering superior data center solutions that cater to the evolving needs of businesses and enterprises in the rapidly expanding digital economy.
• In September 2024, Crusoe Energy Systems announced the development of a 200 MW data center at the Lancium Clean Campus, located near Abilene, Texas. This significant investment represents a substantial expansion of Crusoe's data center capabilities, leveraging cutting-edge technology and sustainable practices. The new facility is designed to enhance operational efficiency and support high-performance computing needs, aligning with the growing demand for scalable and eco-friendly data infrastructure. By situating this large-scale data center within the Lancium Clean Campus, Crusoe Energy Systems aims to capitalize on advanced energy solutions and reinforce its commitment to innovation and sustainability in the data center sector.

Key Market Players

• Amazon Web Services, Inc.
• Microsoft Corporation
• Google LLC
• Equinix, Inc.
• Digital Realty Trust Inc.
• NTT DATA, Inc.
• Vertiv Group Corp.
• CyrusOne LLO
• Iron Mountain, Inc.
• CBRE, Inc.
• Turner Construction Company
• Skanska USA Inc.

Report Scope:

In this report, the North America Data Center Construction Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• North America Data Center Construction Market, By Type of Data Center:

o   Hyperscale Data Centers

o   Colocation Data Centers

o   Enterprise Data Centers

o   Edge Data Centers

• North America Data Center Construction Market, By Construction Type:

o   New Construction

o   Expansion

o   Retrofit/Upgrade

• North America Data Center Construction Market, By Power Capacity:

o   Small Data Centers

o   Medium Data Centers

o   Large Data Centers

• North America Data Center Construction Market, By Service Type:

o   Design & Consulting

o   Construction & Installation

o   Project Management

• North America Data Center Construction Market, By End-User Industry:

o   IT & Telecommunications

o   BFSI

o   Healthcare

o   Retail & E-Commerce

o   Others

• North America Data Center Construction Market, By Country:

o   United States

o   Canada

o   Mexico

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the North America Data Center Construction Market.

Available Customizations:

North America Data Center Construction Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).