Data Centres Market: Critical Infrastructure for a Digital World

Growth in the data centre market has been strong since 2015, even growing in 2020, during the first year of the pandemic. This growth is expected to continue and may even quadruple by 2028.
To celebrate the launch of the Data Centre Construction Market Report 2024-2028, Editor of the report Claudia Charquet has shared just some of the insight found within the report below.
Market Segmentation
The data centre market is divided between owner occupiers, wholesale providers and co-location providers. Many of the largest data centres are owned by wholesale providers, such as property investment companies, who lease space to others.
There are relatively few new build data centres, but they are often large in scale and value. However, the number of new data centres is currently increasing and accounts for most construction activity, with a small proportion from retrofit and repair and maintenance. Nonetheless, retrofit and RMI are expected to grow in coming years, as facilities need upgrading and equipment replaced.
AI’s Impact on the Market
There has been a rapid growth in the use of data in almost every aspect of human activity with key drivers being cloud computing, data analytics, AI and Machine learning, Internet of Things (IoT), 5G, Infrastructure as a Service (IsaaS), e-commerce and gaming.
AI requires 4 x more processing power, so is a key driver of the demand for more, large hyperscale centres, and even larger, GigaSites. Smaller, urban edge centres offer low latency for ‘real-time’ applications, like IoT, 4K streaming and 5G mobile or connected vehicle technologies.
Data Users
There has been a pattern among some data users, from owner-operator, to outsourcing them to specialist data centre operators. Now, some large users are going back to building and operating their own, large centres. These include IT, telecoms, healthcare, finance, utilities, retail and others. Individual examples include Google, Microsoft and Amazon.
National Infrastructure
Data centres have been classified by the new UK Government as a critical part of the national infrastructure. As well as providing key infrastructure for a range of data needs, this will underpin the National AI Strategy.
While data centres grow in number and size, their environmental impact is significant, which can lead to penalties, for instance via the Climate Change Levy. There is, therefore, a drive to reduce carbon emissions and other impacts by, for instance, using renewable energy sources or closed-loop water systems for cooling.
Editor’s Quote
“Despite the uncertainty of recent years, caused by the pandemic and political and economic events, the UK data centre market has grown. Now that the outlook appears more positive, this growth looks to continue.
Furthermore, UK society’s increased adoption of digital services, that require data storage and processing, will only accelerate the need for more and larger data centres. The development of AI and its increased use, is acting as a further catalyst, given its high processing requirements.
While current activity is focused on new build construction, more retrofit and RMI activity can also be expected during the next few years.”
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