AMA Research are pleased to announce the publication of the 2nd Edition of the
report Data Centre Construction Market Report - UK 2014-2018 Analysis
, which quantifies the construction market for data centres and provides a
thorough review of the structure and performance of the market in 2014 and
beyond. For this edition, the report provides a stronger focus on construction
and the companies specialising in this market.
Key issues analysed include:
- Market Structure
- Data Centre Operators
- Legislation & Regulations
- Energy Efficiency Requirements
- Government Investment and Strategy
- Corporate Activity and Major Projects
- Modular Construction
- Key Product Sectors
- Impact of Cloud Computing and Virtualisation technology
This unique report provides both a quantitative and qualitative analysis of
the data centre construction sector and represents an invaluable guide to the
overall market for sales and marketing professionals involved in the
construction, electrical or IT contracting industries. Focusing on market size
and trends, important market influences, key end use sectors and future
prospects, the report is comprehensive, informative and will facilitate
operational and strategic decision-making processes.
Growth in the market for data centre construction was negatively affected by
the global economic crisis and remained depressed for the subsequent two
years, but returned to growth in 2011, driven by a release of pent up demand
in particular. Since then, the data centre market has seen exceptional growth,
with construction activity in 2012 at unprecedented levels and a subsequent
pull back in 2013.
Key drivers for growth include growing online activity, the growth in cloud
based services, an increasing focus on whole life cost and energy efficiency
and an increase in outsourcing among smaller businesses. Factors likely to
restrict growth in the medium term include a lack of suitable sites,
difficulties in obtaining planning and finance for data centre projects, the
implementation of virtualisation technology and a trend towards consolidation.
The current outlook for the market over the medium term is moderately
positive, with construction activity expected to fall back to more sustainable
levels from 2014 onwards. The shortage of modern and efficient data centre
space experienced previously is now less of a factor following a period of
exceptionally high levels of construction within the commercial sector.
Areas of particular interest include:
- Government strategy and the progress of its data centre consolidation
- Analysis of the main client sectors.
- The impact of cloud computing and data centre optimisation strategies.
- Review of the commercial sector incorporating co-location and wholesale
- Description of significant data centre projects.
- Analysis of leading data centre operators/contractors and recent mergers &
Key areas covered in the report include:
- The UK Data Centre Industry - brief overview and structure.
- Data Centre Market Structure - key delivery channels, customer
groups, operators, UK data centre estate ownership shares.
- Data Centre Classification - the Tier Standard and data centre
DATA CENTRE CONSTRUCTION MARKET
- Definition and Market Overview - existing stock levels, the state
of the market.
- Market Performance - market size in value terms, growth levels
- Key trends - growth in cloud computing, consolidation, energy
efficiency / outsourcing.
- Future Prospects - market size and growth projections to 2018.
- Market Mix - share of newbuild, upgrade/replacement and
- Project Characteristics - typical size, build time and cost, site
selection and design issues.
KEY MARKET TRENDS AND INFLUENCES
- Review of past, current and future internet usage levels and trends
in UK and Europe.
- Analysis of current and forecast IP Traffic and types of
Internet traffic .
- Information about legislation and standards affecting the market.
Review of government's datacentre consolidation project, IT expenditure
and strategy .
- Outline of carbon reduction and green energy requirements .
- The impact of the growth in cloud computing and the use of
virtualisation techniques . Analysis of the impact of IT outsourcing
and review of recent market activity.
KEY MARKET SECTORS
- Estimated output by value, with historical trends and
forecasts , in each main sector.
- Market mix by end-use sector. Key market drivers ,
influences and future prospects in each main market.
- Project types, existing stock, key construction clients and
major projects in each sector.
- Commercial Operators - wholesale, co-location and managed
- Public Sector Market - government IT spend by function and by
- Private Sector Market - key sub-sectors, influences in each, key
SUPPLIERS AND CONTRACTORS
- Consultants - procurement process, the role of consultants, key
consultants. Contractors - types of contractors, leading companies,
mergers & acquisitions.
- Key Product Sectors - Value of products in data centres, product
mix, value by sector.
- Products in Data Centres - review of each major product sector,
including value, important market influences and key suppliers. Includes power
and electrical equipment, cooling and air conditioning, networking equipment,
security, access control and fire protection.
SUMMARY OF REPORT CONTENTS
The market for data centre construction is estimated to be valued at around
£1.1bn in 2013, following two years of high level growth.
The market performance has been variable, showing falls during 2009 and 2010
as a result of the economic downturn affecting a number of key sectors for
data centres, such as financial services and retail. Subsequently there was a
return to growth in 2011, data centre construction activity was at a very high
level throughout 2012 and into 2013. This was due to the growing interest in
cloud computing in combination with improving business confidence, which led
to a release of projects previously on hold Energy efficiency is a key driver
of market growth. The effects of improving energy efficiency in data centres
can be seen immediately, bringing the additional benefit of substantial
savings on operational costs, of which power accounts for a large share. This
has driven demand for modular solutions, from rack-based solutions to complete
data centre pods and containerised solutions. One key trend that may affect
the market negatively in the longer term is that of consolidation. The
government, as well as a number of private businesses, have announced plans to
consolidate their data centre estates and move operations to fewer, larger and
more efficient data centres. The full impact of this is yet to be seen.
In terms of contractors, the data centre market is extremely fragmented. While
most large M&E contracting businesses are key players, companies involved in
data centre construction range from major building contracting groups and
commercial developers, to data centre specialists and operators, modular
building manufacturers and IT equipment suppliers.
It appears that data centre construction is emerging as a significant sector
in its own right, and one key trend seen over the past 2-3 years is that of
integrated service offerings. Commercial operators and data centre specialists
now offer a wider range of construction services and product/equipment
suppliers are targeting whole ranges specifically at the data centre sector.
These often include software solutions for monitoring and management as well
as design & build services.
Demand is expected to continue to grow, particularly from technology, media
and content providers, with the financial sector also expected to pick up
following some definitive signs of economic recovery in early 2014. However,
much of this demand is likely to be absorbed by existing vacant data centre
space as more businesses opt for the co-location model. The impact of the
government's data centre consolidation project has yet to be fully felt in the
market. This is likely to lead to a reduction in the value of RMI and upgrade
spend, on data centres from 2015 onwards. It is likely that further
consolidation will take place among operators, specialists and
construction/engineering firms in the near future, as the market remains
extremely fragmented and characterised by a large number of new entrants and
small market shares, even among the leading players. It is estimated that
between 2014 and 2016 the market will continue to decline in value terms,
however, by 2017 it is expected that the amount of vacant space will have
reduced and build levels will have started to rise again. The market should
reach £1,016m by the end of 2018.
Table of Contents
CONTENTS and LIST OF TABLES & CHARTS
- 1.1 INTRODUCTION
- 1.2 SOURCES OF INFORMATION
- 1.3 GLOSSARY
2 EXECUTIVE SUMMARY & FUTURE PROSPECTS
- 2.1 SUMMARY
- 2.2 FUTURE PROSPECTS
3 ECONOMIC ENVIRONMENT
- 3.1 GDP
- 3.2 INFLATION & INTEREST RATES
- 3.3 UNEMPLOYMENT
- 3.4 HOUSEHOLD CONSUMPTION
- 3.5 HOUSING & CONSTRUCTION
- 3.6 STERLING
- 3.7 POPULATION PROFILE
- 3.8 CONCLUSIONS
4 THE UK DATA CENTRE INDUSTRY
- 4.1 INDUSTRY OVERVIEW
- 4.2 THE TIER STRUCTURE
- 4.3 DATA CENTRE MARKET STRUCTURE
5 THE CONSTRUCTION MARKET FOR DATA CENTRES
- 5.1 DEFINITION
- 5.2 MARKET OVERVIEW
- 5.3 MARKET SIZE
- 5.3.1 Background
- 5.3.2 Current Situation
- 5.3.3 Future Prospects
- 5.4 MARKET MIX
- 5.5 CHARACTERISTICS OF DATA CENTRE CONSTRUCTION PROJECTS
- 5.5.1 Background
- 5.5.2 Design
- 5.5.3 Key Components
- 5.5.4 Cost
- 5.5.5 Site Selection
6 KEY MARKET CHANGE FACTORS
- 6.1 INTERNET USAGE LEVELS
- 6.1.1 IP and Internet Traffic
- 6.1.2 Broadband Availability and Take-Up
- 6.1.3 Public Wi-fi and Mobile Data
- 6.2 LEVELS OF IT OUTSOURCING
- 6.3 GROWTH IN CLOUD COMPUTING
- 6.4 DATA CENTRE OPTIMISATION STRATEGIES
- 6.5 LEGISLATION & STANDARDS
- 6.6 CARBON REDUCTION & GREEN ENERGY REQUIREMENTS
- 6.7 INNOVATION & MODERN METHODS OF CONSTRUCTION
7 KEY MARKET SECTORS
- 7.1 OVERVIEW
- 7.2 COMMERCIAL PROVIDER SECTOR
- 7.2.1 Wholesale Providers
- 7.2.2 Co-location Providers
- 7.2.3 Hosting/ Managed Service Providers
- 7.3 PUBLIC SECTOR
- 7.3.1 UK Government IT Spend and Data Centre Estate
- 7.3.2 UK Government ICT Strategy
- 7.4 PRIVATE SECTOR
- 7.4.1 Background
- 7.4.2 Financial Services
- 7.4.3 Online Retail & Leisure
- 7.4.4 Telecoms Providers & ISPs
- 7.4.5 Broadcasting, Content Providers & Social Media
8 SUPPLIERS, CONTRACTORS AND PRODUCTS USED
- 8.1 KEY CONTRACTORS & CONSULTANTS
- 8.1.1 Data Centre Consultants
- 8.1.2 Building Contractors
- 8.1.3 M&E and IT Contractors
- 8.1.4 Specialist Contractors
- 8.2 KEY PRODUCT SECTORS IN DATA CENTRE CONSTRUCTION
- 8.2.1 Overview
- 8.2.2 Power, Cabling and Electrical
- 8.2.3 Cooling & Air Conditioning
- 8.2.4 Security & Access Control
- 8.2.5 Fire Protection
- 8.2.6 Other Products
TABLES AND CHARTS
- CHART 1 UK MARKET FOR DATA CENTRE CONSTRUCTION 2009 TO 2018 - BY VALUE
- TABLE 2 GDP DATA - 2010-2013 - KEY CONSTITUENT ELEMENTS
- CHART 3 INTEREST RATES AND INFLATION (CPI) FROM 1994-2018
- CHART 4 PDI & SAVINGS RATIO AT CURRENT PRICES 1995-2018
- TABLE 5 EXCHANGE RATE FLUCTUATIONS 2008-2014 - STERLING TO THE DOLLAR, AND
THE EURO, SPOT RATES
- TABLE 6 OVERVIEW OF THE TIER STANDARD
- CHART 7 MARKET STRUCTURE FOR DATA CENTRE SERVICE DELIVERY
- CHART 8 OWNERSHIP BY TYPE OF ORGANISATION - % BY FLOORSPACE 2013
- TABLE 9 UK DATA CENTRE CONSTRUCTION MARKET 2009 TO 2018- BY VALUE
- CHART 10 MARKET MIX BY TYPE OF WORK UNDERTAKEN (NEW BUILD, RMI,
REFURBISHMENT) - % BY VALUE 2013
- CHART 11 DATA CENTRE BUILD COST BREAKDOWN - % BY VALUE
- TABLE 12 IP/INTERNET TRAFFIC FORECASTS UK 2012-2017
- CHART 13 % SHARE OF IP TRAFFIC BY TYPE OF DEVICE - 2012 TO 2017
- TABLE 14 MAJOR EUROPEAN ECONOMIES - INTERNET ACCESS, TAKE-UP AND DATA
- TABLE 15 BROADBAND AND INTERNET STATISTICS UK 2011-2013*
- TABLE 16 MOBILE DATA AND PUBLIC WI-FI STATISTICS UK 2011-2013*
- CHART 17 MIX BY SERVER TYPE - % BY VOLUME 2013
- CHART 18 MARKET MIX BY CONSTRUCTION CLIENT - % BY VALUE 2013
- CHART 19 DATA CENTRE CONSTRUCTION MARKET - COMMERCIAL PROVIDER SECTOR
2009- 2018 (£M)
- TABLE 20 RECENT PROJECT ANNOUNCEMENTS - COMMERCIAL SECTOR
- CHART 21 CO-LOCATION FACILITIES CLIENT MIX - % BY VOLUME 2013
- CHART 22 DATA CENTRE CONSTRUCTION MARKET - PUBLIC SECTOR 2009-2018
- TABLE 23 UK GOVERNMENT DEPARTMENTS - DATA CENTRES - 2012
- CHART 24 UK GOVERNMENT ICT SPEND BY CATEGORY - % BY VALUE 2009
- TABLE 25 UK GOVERNMENT ICT SPEND TOP 10 DEPARTMENTS - BY VALUE 2009
- TABLE 26 EXPECTED SAVINGS OF DATA CENTRE CONSOLIDATION (£M)
- CHART 27 DATA CENTRE CONSTRUCTION MARKET - PRIVATE SECTOR 2009-2018
- CHART 28 UK ONLINE BANKING PENETRATION - SHARE OF ADULT INDIVIDUALS 2007 -
- TABLE 29 E-COMMERCE PENETRATION RATES IN THE UK 2008-2013 - % OF UK ADULTS
- CHART 30 USAGE OF ONLINE CONTENT - % OF ADULTS WITH BROADBAND 2013
- TABLE 31 LEADING MECHANICAL & ELECTRICAL CONSULTING FIRMS, BY NUMBER OF
- TABLE 32 TOP M&E CONTRACTORS IN THE UK BY M&E TURNOVER
- CHART 33 DATA CENTRE CONSTRUCTION PRODUCT MIX - % BY VALUE 2013
- TABLE 34 VALUE OF PRODUCTS USED IN DATA CENTRE CONSTRUCTION - BY VALUE 2013
- CHART 35 POWER & ELECTRICAL - PRODUCT MIX BY VALUE 2013 (%)
- CHART 36 SECURITY SYSTEMS - PRODUCT MIX BY VALUE 2013 (%)