Meeting the Demands of the Digital Age: What Today’s Data Centers Require for Long-Term Success
- Evie Katz Palka
- Oct 7
- 8 min read
Data center design has shifted significantly over the last decade, driven primarily by the demands of increased computing power to handle new AI technologies and cloud computing, while providing maximum operational efficiency and addressing sustainability goals.
Key Takeaways
Dramatic Industry Growth
Modern Data Center Needs
Well-Designed Data Center Benefits
Choosing the Best Contractor for Your Data Center
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Global data center construction has reached record levels as developers and investors race to keep up with growing demands. Data centers are essential to support the increased demand for the digitization of today’s world, allowing individuals to connect, companies to operate, and information to be collected, stored, and accessed globally. Currently, data centers make up between 20% and 30% of the global commercial real estate market.
E-commerce giants such as Google, Amazon, and Meta, as well as localized Edge data centers that serve organizations and third-party service providers, have consumed the majority of available data center real estate, creating an increased demand for (the right) new data centers.
According to Fortune Business Insights1, the US data center industry was valued at $121.15 billion in 2024. With a CAGR (Compound Annual Growth Rate) of 11.7%, that value will reach nearly $358 billion by 2032.
Compounding this shortage is the fact that data center design has undergone significant shifts over the past decade. These changes include the explosive growth and popularity of e-commerce, remote working, and online learning platforms. As a result, a successful data center design should include elements such as higher-density computing capacity, advanced cooling systems, modular and scalable designs, and an emphasis on energy efficiency and sustainability elements. This has created a need for specialized general contractor services that can create flexible spaces that quickly adapt to changing business needs.
What Do Modern Data Centers Need?
Most data centers fall into one of the following categories.
Enterprise Data Centers are owned and operated by a single company for its own internal use. These are typically customized to meet specific business needs and are usually located on-premises.
Colocation Data Centers allow businesses to rent space within a facility owned by a third party, providing their own hardware and managing their systems. This allows companies to leverage the data center's infrastructure without incurring the full cost of ownership.
Hyperscale Data Centers include the massive facilities designed to handle extremely large workloads and data storage requirements. They are often operated by major cloud providers and tech companies, including Microsoft and Amazon.
Edge Data Centers represent smaller, decentralized facilities located closer to end-users or devices. They are used to process data locally, reducing latency and improving performance for real-time applications.
Cloud Data Centers offer computing resources and storage to customers over the internet. These are owned and operated by cloud service providers like AWS, Google Cloud, or Azure.
Modular Data Centers are prefabricated, containerized data centers that can be deployed quickly and scaled as needed.
Managed Data Centers are facilities owned by a third-party provider that offer services like infrastructure management, monitoring, and maintenance.
While the typical life cycle for commercial buildings is approximately 50 years, many of the data center infrastructure systems have a lifecycle of just 20 years. A successful data center design requires a multidisciplinary design approach that includes expertise in structural, mechanical, and electrical engineering.
Data Center Infrastructure & Flexibility/Scalability
The final design must address today’s needs and the potential future growth and space requirements for in-person and remote employees, including work and parking spaces. The office layout should clearly define office and work areas, as well as the locations of server rooms, network devices, printers, security points, electrical panels, and cooling system components.
The design phase should also consider future electrical and data demands, which could increase dramatically with the use of AI, VR, and BMS (Building Management System) or BAS (Building Automation System), as well as additional HVAC equipment.
Power and Cooling
One of the most significant barriers to entry and constraints in data center supply is the tremendous and increasing amount of power requirements they need. Many local jurisdictions and infrastructure cannot support the growing power consumption and need to serve data centers. According to Deloitte2, current data center electric usage is approximately 536 terawatt hours, but is expected to nearly double to 1,065 terawatt hours by 2030. The spike in energy consumption is attributed to advancements in artificial intelligence technology, adoption, and advancements.
As a result, there is a growing interest in innovative and alternative energy sources. For example, small modular reactors (“SMRs”) are expected to be a potential vehicle to support data center energy generation in a significantly more cost-effective and efficient manner. SMRs are intended to provide on-site power, 24/7, with a compact footprint, and to function like mini nuclear power plants.
While SMRs are not yet available for commercial use, many of the large e-commerce firms are investing significantly in SMR companies with the hope of bringing them to market and at scale in the coming years. For example, Amazon has recently invested over $500m to support SMR development. There remain regulatory hurdles before SMRs or other micro-nuclear power generation are available for the data center market, but all indicators suggest this could be a meaningful enabler to more practical, cleaner, and available energy.
Training large AI models and transferring large amounts of data requires increased computing power, resulting in increased energy consumption and the generation of substantial heat.
Line voltage (13.8 kV or 33 kV) must be stepped down from the power grid before it can be supplied through main Distribution Boards (MDBs) to different parts of the facility via switchgear, Automatic Transfer Switches (ATS), and Power Distribution Units (PDUs) to individual racks and devices.
Data centers must now be designed to accommodate significantly higher power densities within server racks, sometimes exceeding 50kW per rack, compared to the 3-5kW range of the past. This increase is largely due to the use of more powerful processors, GPUs, and specialized AI accelerators.
Due to these factors, data centers require substantially more three-phase power than standard commercial projects. However, options such as solar and wind can reduce consumption and annual utility costs.
Traditional air cooling systems remain a popular option for data centers, such as Computer Room Air Conditioners (CRAC) and Computer Room Air Handlers (CRAH). These systems use refrigeration or chilled water to cool the air before it is distributed through the facility via ducting systems.
The increase in power density has spurred the development of more advanced cooling solutions, including direct-to-chip liquid cooling, where coolant is distributed directly to high-density components.
Immersion cooling, where hardware is submerged in a dielectric (non-conductive) solution to remove excessive heat.
Hot/Cold Aisle Containment, where server racks are arranged in alternating rows to create hot or cold aisles to improve component cooling needs. which are more efficient at dissipating heat from high-density servers.
Data Center Redundancy
Data center redundancy is the practice of including duplicate or backup components and systems as part of the design process. Redundant systems ensure that if one component fails, another takes over to protect data and maintain continuous operation. A modern data center requires a reliable and substantial power supply to operate servers, cooling systems, and other essential equipment. This often necessitates upgrades to the existing power grid and the installation of redundant power supplies, such as backup diesel or natural gas generators, solar energy systems, or Battery Energy Storage Systems (BESS).
Uninterrupted Power Supply (UPS) is another option to provide a power buffer during brief outages or voltage fluctuations. These systems work by drawing power from the main grid to charge their internal batteries. When the main power is lost, the batteries utilize an inverter to convert the stored DC power back to AC power to maintain operations.
Redundancy is categorized by levels, often defined using the "N" system, where "N" is the minimum capacity needed to run at full load, leading to N+1 (one backup) or 2N (a fully mirrored system) configurations. A redundancy strategy is crucial for data center continuity and data integrity while minimizing downtime and data loss.
Because data centers are energy-intensive, there is growing pressure for the industry to adopt more sustainable practices, such as using renewable energy sources and implementing energy-efficient technologies to offset local environmental impact.
Physical and Digital Security
Data security measures will vary by the type of organization, but here are some of the most common essential measures for protecting against unauthorized access and cyber threats.
Intrusion Prevention Systems (IPS)
Web Application Firewalls (WAF)
Zero-Trust Network Access (ZTNA)
Health Insurance Portability and Accountability Act (HIPAA)
Data Masking
Data Encryption
Data Resiliency
Virtual Private Networks (VPN)
Other robust security measures, including access control systems, surveillance, and fire suppression systems, are crucial for protecting the data center's physical assets and personnel.
Energy Efficiency & Sustainability
The ideal data center location should provide access to affordable energy sources, while the building design should prioritize energy efficiency to minimize operational costs. Renewable materials, such as steel, copper, and aluminum, are endlessly recyclable, which can significantly reduce their local environmental impact.
Sustainability is more than just a buzzword in the construction industry. Currently, over 500 US cities have green building codes in place. Building certification programs, such as LEED, can address stakeholder concerns while increasing property value and lowering operational and maintenance costs.
Why Data Center Design Matters
A well-designed data center ensures optimal performance, minimizes downtime, and reduces operational expenses. Conversely, poor design can lead to system failures, increased energy consumption, and hindered business growth.
The final design must consider the organization's needs today, while also addressing future-proofing strategies to extend the building’s lifecycle and enhance its perceived value. Building a data center represents a significant capital investment for the organization, so the finished project should be flexible and adaptable to changing business needs to provide the maximum ROI possible.
Who Should You Trust to Build Your Data Center?
Due to the complexities of building a data center, the best general contractor is one that understands the importance of the requirements outlined above, and the following skills.
Specialized Mission-Critical Experience: Look for a contractor with a proven portfolio of similarly sized commercial projects. Property owners and developers should confirm the GC’s expertise with data systems and mechanical, electrical, and plumbing (MEP) meet or exceed the project’s performance targets.
Technical Expertise: Data centers require seamless integration of complex MEP, power, and cooling systems. A general contractor with specialized MEP partners can coordinate and prevent costly design issues and construction delays.
Collaboration and Communication: A data center project involves numerous stakeholders, as well as a network of reliable subs and suppliers. Choose a partner with strong communication skills to ensure a smooth, efficient process from start to finish.
Innovation and Prefabrication: Prefabricated and modular components are typically used by data center builders to speed up construction timelines, improve quality control, and reduce on-site labor congestion.
Safety and Security Standards: Given the sensitive nature of data, the builder must demonstrate strict adherence to both physical security measures and construction site safety protocols.
Sustainability Practices: An experienced builder will help design an energy-efficient facility that can lower operational costs and meet environmental goals through measures like optimized cooling and energy management.
Since no one can predict the next technology trend, the general contractor must include future-proofing elements or infrastructure systems to reduce future upgrade costs and timelines. A successful data center should work well today and 50 years from now.
Thanks to the increased demand for cloud computing and AI workloads, there is a global shortage of data centers, which makes speed to market another crucial factor for property owners and organizations to consider.
Future-Ready Starts with Building Right
As society’s reliance on the internet for business, education, entertainment, and information continues to grow, so will the need for adaptable data centers with forward-thinking designs. Meeting this demand for efficient data management and security requires a general contractor with the expertise and agility to keep pace with constantly changing business needs and technologies. PREMIER Design + Build Group consistently delivers facilities that not only meet today’s requirements but are also well prepared for the future.
Backed by a national footprint, PREMIER boasts a strong network of skilled partners and suppliers with proven experience in executing complex projects, ranging from healthcare facilities to cold storage facilities and data centers.
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