Abstract
INTRODUCTION and OVERVIEW
AMA Research has published the 1st Edition of a brand new report, "Data
Centre Construction Market - UK 2011-2015", which attempts to quantify the
construction market for data centres and provide a comprehensive review of the
structure and performance of the market in 2011 and beyond.
Key issues analysed include:
- Market Structure
- Data Centre Operators
- Modular Construction
- Legislation & Regulations
- Energy Efficiency Requirements
- Government Investment and Strategy
- The Server Market
- Impact of Cloud Computing and Virtualisation technology
- Key Product Sectors
This unique report answers the need for 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 had been strong in the years
leading up to 2008, though was negatively affected by the global economic
crisis during 2008 and 2009, but saw an upturn in 2010 due to a release of
pent up demand, with estimates for 2011 for slightly lower growth.
Key drivers for growth include growing online activity, the growth in cloud
based services, an increasing focus on whole life cost and energy efficiency,
the development of modular solutions 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 positive, with the
shortage of modern and efficient data centre space experienced at present
expected to drive both newbuild and replacement activity for the foreseeable
future.
Areas of particular interest include:
- Government strategy and the impact of the government's planned
consolidation.
- Analysis of the key client sectors.
- Key legislation and regulations affecting the market.
- Review of the commercial sector incorporating co-location and wholesale
providers.
- Review of modular solutions available.
Key areas covered in the report include:
INDUSTRY OVERVIEW
- The UK ICT Infrastructure Market - overview, structure, key metrics.
- Data Centre Market Structure - key delivery channels, customer
groups and operators, review of co-location and wholesale providers, UK data
centre estate ownership shares.
- Data Centre Classification - the Tier Structure and data centre
types.
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
2005-2011.
- Key trends - growth in online activity, consolidation, energy
efficiency, outsourcing.
- Future Prospects - market size and growth projections to 2015.
- Market Mix - share of newbuild, upgrade/replacement and
repair/maintenance.
- Project Characteristics - typical size, build time, build cost,
design considerations.
KEY MARKET TRENDS AND INFLUENCES
- Review of past, current and future internet usage levels and trends.
- Information about legislation and standards affecting the market.
- Analysis of IT and construction related government spending and
strategy.
- Review of the importance of innovation and Modern Methods of
Construction.
- Outline of carbon reduction and green energy requirements.
- Review of the recent performance of the UK server market.
- Analysis of the impact of IT outsourcing, and growth in cloud
computing and virtualisation.
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 and key construction clients in
each sector.
Commercial Operators - wholesale, co-location and managed services
providers.
Public Sector Market - government IT spend by function and by
department.
Private Sector Market - key sub-sectors, influences in each, key
clients.
SUPPLIERS AND CONTRACTORS
- Consultants - procurement process, the role of consultants, key
consultants.
Contractors - types of contractors, leading companies, specialists,
modular manufacturers.
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 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 experienced variable performance, with
strong growth between 2005 and 2007, driven by growing levels of outsourcing,
an increase in data volumes and internet activity, and a continuing demand for
modern and efficient data centre space. The value of the market fell
substantially in 2008 and 2009 due to the general economic downturn affecting
a number of key sectors for data centres, such as financial services and
retail. In addition, financing such large projects became increasingly
difficult as the recession took hold.
Market values continued to be sustained by ongoing replacement and maintenance
work and demand continued to grow due to ever increasing usage of online
services and media, and as a result 2010 saw an increase in output as projects
that had been on hold previously were released amid signs of economic
recovery. The market for data centre construction is estimated to be valued at
around £1.26bn in 2011, significantly below values seen at its recent
peak in 2007.
Modular data centre units and complete pods have become increasingly popular
in the past 3-5 years with a large number of new suppliers entering the
market. This is driving demand as modular builds provide a quick way of
meeting demand for data centre space without the large capital costs incurred
by building in a traditional way. Modules are also often more energy efficient
and allow the client to scale the construction according to demand.
Energy efficiency is a key driver of market growth. Data centres utilise
incredibly large amounts of power and in many traditionally built data
centres, a lot of energy is wasted. 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.
Ever increasing levels of online activity, and changes in the way online
services are delivered with the growing interest in cloud computing technology
seen at present are also driving demand.
The government owns a large number of data centres and as such have a
significant influence on the replacement and maintenance sector of the market.
While commercial developers, such as co-location providers, account for a
significant share of newbuilds due to their large scale and the high
specifications, the majority of the existing data centre estate belongs to
private businesses.
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, modular building
manufacturers and IT equipment suppliers.
The prospects for the data centre construction market in the medium term are
relatively bright and it is expected that in 2012, the market will show strong
growth. This will be driven by, among other factors, an expected surge of
activity ahead of the implementation of the government's planned consolidation
of its hundreds of data centres into just a handful. In addition, while some
client sectors have been facing difficult times during the recession, demand
in some key client sectors, such as online content and media providers and
SaaS providers have seen strong growth and this is likely to continue in the
near future. It is estimated that the market may reach £1.66bn by the
end of 2015, representing a slight decline on 2014 following a period of
sustained growth between 2010 and 2014.
Table of Contents
CONTENTS and LIST OF TABLES & CHARTS
1 INTRODUCTION
- 1.1 INTRODUCTION
- 1.2 SOURCES OF INFORMATION
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 CONCLUSIONS
4 THE UK DATA CENTRE MARKET
- 4.1 OVERVIEW OF THE UK ICT INFRASTRUCTURE MARKET
- 4.2 THE ROLE OF DATA CENTRES
- 4.3 THE TIER STRUCTURE
- 4.4 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 Current Situation
- 5.3.2 Future Prospects
- 5.4 MARKET MIX
- 5.5 CHARACTERISTICS OF DATA CENTRE CONSTRUCTION PROJECTS
- 5.5.1 Design
- 5.5.2 Key Components
- 5.5.3 Cost
6 KEY MARKET CHANGE FACTORS
- 6.1 INTERNET USAGE LEVELS
- 6.2 LEVELS OF IT OUTSOURCING
- 6.3 THE UK SERVER MARKET
- 6.4 NEW TECHNOLOGIES
- 6.4.1 Cloud Computing
- 6.4.2 Virtualisation
- 6.5 INVESTMENT IN IT INFRASTRUCTURE
- 6.6 LEGISLATION & STANDARDS
- 6.7 CARBON REDUCTION & GREEN ENERGY REQUIREMENTS
- 6.8 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
- 7.4 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 2005 TO 2015 - BY VALUE
(£BN)
- CHART 2 INTEREST RATES AND INFLATION (CPI) FROM 1992-2015
- CHART 3 PDI & SAVINGS RATIO AT CURRENT PRICES 1992-2015
- TABLE 4 EXCHANGE RATE FLUCTUATIONS 2006-2011 - STERLING TO THE DOLLAR, AND
THE EURO, SPOT RATES
- CHART 5 UK BROADBAND PENETRATION - HOUSEHOLDS AND BUSINESSES 2005 - 2011
(%)
- 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 2011
- TABLE 9 UK DATA CENTRE CONSTRUCTION MARKET 2005 TO 2015 - BY VALUE
(£M)
- CHART 10 MARKET MIX BY TYPE OF WORK UNDERTAKEN (NEW BUILD, RMI,
REFURBISHMENT) - % BY VALUE 2011
- CHART 11 DATA CENTRE BUILD COST BREAKDOWN - % BY VALUE
- CHART 12 UK INTERNET CONNECTIVITY - % OF HOUSEHOLDS 2010
- TABLE 13 LEADING LOCATIONS FOR WI-FI - 2011
- CHART 14 MIX BY SERVER TYPE - % BY VOLUME 2011
- CHART 15 MARKET MIX BY CONSTRUCTION CLIENT - % BY VALUE 2011
- CHART 16 DATA CENTRE CONSTRUCTION MARKET - COMMERCIAL PROVIDER SECTOR
2005- 2015 (£M)
- CHART 17 CO-LOCATION FACILITIES CLIENT MIX - % BY VOLUME 2011
- CHART 18 DATA CENTRE CONSTRUCTION MARKET - PUBLIC SECTOR 2005- 2015
(£M)
- CHART 19 UK GOVERNMENT ICT SPEND BY CATEGORY - % BY VALUE 2009
- TABLE 20 UK GOVERNMENT ICT SPEND TOP 10 DEPARTMENTS - BY VALUE 2009
- CHART 21 DATA CENTRE CONSTRUCTION MARKET - PRIVATE SECTOR 2005- 2015
(£M)
- CHART 22 UK ONLINE BANKING PENETRATION - SHARE OF ADULT INDIVIDUALS 2004 -
2011 (%)
- TABLE 23 E-COMMERCE PENETRATION RATES IN THE UK 2008-2010 - PERCENTAGE OF
UK ADULTS
- CHART 24 USAGE OF ONLINE CONTENT - % OF UK POPULATION 2010
- TABLE 25 LEADING M&E CONTRACTORS IN THE UK
- CHART 26 DATA CENTRE CONSTRUCTION PRODUCT MIX - % BY VALUE 2011
- TABLE 27 VALUE OF PRODUCTS USED IN DATA CENTRE CONSTRUCTION - BY VALUE 2011
- CHART 28 POWER & ELECTRICAL - PRODUCT MIX BY VALUE 2011 (%)
- CHART 29 SECURITY SYSTEMS - PRODUCT MIX BY VALUE 2011 (%)
