For the Electroindustry, Data Center Projects Expected to Grow Late 2020

Given the amount of wire and cable entering a data center, electroindustry leaders are familiar with the unique needs of these facilities and the importance of safeguarding their infrastructure. According to Electrical Wholesaling’s Electrical Market Forecast & Analysis, 2020 has been called a challenging year to forecast. And the COVID-19 pandemic adds another level of complexity.

Data centers are projected to be among the more popular projects in 2020 and build-outs are expected to grow in the latter half of the year. Here’s some insight on the data center market.

Who’s behind these data centers?
Tech giants – Facebook, Apple, Amazon, Netflix and Google plus traditional technology companies like IBM and Microsoft – are largely the owners of these data centers. According to Mordor Intelligence, the data center construction market was valued at $20.11 billion in 2019, and is expected to reach a value of $32.50 billion by 2025.

What’s caused data center growth?
Electrical Wholesaling reports the growth is due in part because of an increase in e-commerce, telecommunications, financial services, health care, and military applications feeding the trend. The rise of 5G networks is also fueling data center construction.

And, of course, COVID-19 is accelerating the trend of more data due to virtual school and work. Expect these trends to stay after the pandemic and data center construction to commence and grow.

Where are data centers being built?
According to Electrical Wholesaling, U.S. data center hot spots include Chicago; the Omaha, Neb./Council Bluffs, Iowa, area; and Loudoun County, Va., also known as “Data Center Alley” because of the massive concentration of these facilities 30-40 miles west of Washington, D.C.

Impact on the Industry
Data center construction is certainly impacting the electroindustry. The report, “The Impact of Hyperscale Data Centers: How the Wave is Changing the Value Chain,” found that 42% of electrical contractors dedicated more than half their time to hyperscale and colocation projects in the last 12 months. Hyperscale (read: very large, enterprise) data centers are especially growing.

Electrical contractors say their top day-to-day pain points in regard to these projects are: pressures to complete work in tighter deadlines (49%); greater client involvement (42%); and emerging construction technology (42%).

Another trend in the data center market is speed and edge computing, which is creating new data center models.