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Industry Viewpoint

Big Data Fuels Data Center Growth

It should come as no surprise that managing, processing, and storing data in today’s world is big business — really big. Our personal lives thrive on sending text messages, tweets, and e-mails; posting photos and thoughts on Facebook and Instagram; watching YouTube videos, TV shows, and movies; and shopping online. In addition, businesses, corporations, banks, and governments process and store enormous amounts of data in support of their business objectives. According to Cisco’s Visual Networking Index forecast, which it released on May 30, more than 1.4 zettabytes of data will be flowing over global networks by 2017. This insatiable need for data processing and storage capacity has led to a global boom in the data center construction market.

TechNavio’s analysts forecast the data center construction market in the United States will grow at a compound annual growth rate (CAGR) of 7.61% between 2012 and 2016. Back in early 2012, Microsoft forecasted the U.S. market for data center construction would likely grow to about $18 billion by 2020, and Infiniti Research Limited forecasts the global green data center market to increase at a CAGR of nearly 30% over the period 2012 to 2016. As demand for these facilities continues to rise, so does the amount of power required to serve and operate them. To remain competitive, data center owners and operators must continue to develop strategies to keep design and construction costs in check, reduce operating costs, and improve system efficiency. In doing so, they must also make sure they don’t jeopardize the high availability and reliability levels their customers demand in today’s competitive business environment. For a more detailed review of some of the challenges facing those who design, construct, and operate data centers, turn to page 18 and read this month’s cover story, “More with Less.”

How can you get involved in this hot market? One approach is to leverage the existing relationships you have with your local electric utility. Why? A number of utilities are taking a proactive approach to attract data center owners to their service territories. Your utility contact might be able to tell you where a new data center might be built and how to get in touch with the owner/operator. For example, American Electric Power, Columbus, Ohio, recently commissioned a site selection study to pinpoint nine sites in its territory that offer a reliable and redundant power supply, access to strong fiber networks, low disaster risk, and a business-friendly climate. Other factors that were taken into account included water availability, electricity costs, tax exemptions, and the ability to complete construction within 18 months. Many utilities also offer incentives to data center owners to improve efficiency levels and reduce load requirements. In the Chicago area, ComEd’s “Smart Ideas for Your Business” program offers technical assistance and cash incentives for new and existing data centers. Southern California Edison’s “Data Center Energy Efficiency Program” provides full-service development, management, and implementation of energy management projects at no cost to the customer. I believe some of their work covers site selection assistance, which matches load requirements with utility circuits, offers regulatory/permit assistance, presents broadband options, and assists with tax incentive negotiations.

Data centers present a wonderful business opportunity for electrical engineering firms and electrical contractors. The ever-changing shape, form, and function of these high energy use facilities demand strong engineering support and creative solutions from those involved in the design and installation of these mission-critical facilities. Many data centers end up being unique in one way or another, even though their initial design may be based on some type of standard configuration. That’s why I believe it’s a market segment you can’t afford to ignore. Becoming an active player in data center construction just might the big move that boosts your bottom line.

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