- The data center market was valued at $8.4 billion in 2020 and could grow to $13.9 billion by 2026, according to a report from marketing research firm Accountability Information Management (AIM).
- Remote working, virtual health care and the internet of things (IoT) continue to boost interest in the sector, as these growing trends increase the demand for more data centers.
- Most of the data centers being built are located in company offices. That category includes data centers built for major tech firms such as Facebook, Amazon and Google. Data centers for universities and colleges constitute the next most active sector.
Though the data center industry was already booming, the COVID-19 pandemic only exacerbated the demand for data centers. Just three out of 10 white-collar employees are now working at the office in 10 major U.S. cities, according to data from Kastle Systems, a shift to remote work that has increased data center demand.
But that's not the only trend in play for this booming sector.
The virtual health care industry is expected to continue to grow, which puts more emphasis on data center construction, according to the AIM report. In addition, as more and more IoT devices use the internet to connect and share data with one another, more data centers are needed to move the information.
For example, the AIM report points to new floor technology. Particularly useful in senior living facilities, these smart floors are equipped with sensors, which call for help if a resident falls, requiring a data center to route the information.
Of the over 500,000 active construction projects happening at any given moment in the United States and Canada, 11,198 of them involve data centers. Of those, around 297 are standalone projects, with the rest constituting construction within a company building, according to the AIM report.
Nine states — Virginia, Texas, California, Georgia, Arizona, Illinois, Tennessee, Ohio and Colorado — contain over half of the standalone data center projects, while the other 49% of active projects are spread across the other states or Canadian provinces.
Despite hot spots like Ashburn, Virginia -- known as "Data Center Alley" -- hosting multiple projects, most of the money flowing into the sector can be traced to a handful of large projects.
For example, just two projects in Virginia represent over $3.3 billion, half of the total value of data center projects in the state. In Texas, the EdgeCore Data Center project in Richardson, estimated to be worth around $1 billion, represents over 50% of the value of all 28 active projects in the state.
Most of the 297 standalone projects are in office locations, serving major tech companies like Facebook, Amazon, and Google. Universities and colleges are the next most active sector, followed by government.
Though COVID-19 heightened the demand for data centers, the pandemic caused some disruption in a number of these projects, according to a 2020 Turner & Townsend report. Around 79% of people polled believed COVID-19 caused productivity losses and higher operating costs on data center construction sites.
But confidence in the sector remains high, as 71% of respondents consider the industry to be recession proof, up from 50% last year, according to the report.