Global electricity demand is soaring, driven by the rapid adoption of cloud computing and artificial intelligence (AI). The International Energy Agency (IEA) projects electricity consumption by data centers will grow at a compound annual rate of 15% from 2024 to 2030, creating significant opportunities for commercial real estate developers while simultaneously transforming the facility management sector.
As workloads transition from traditional storage to high-intensity AI processing, managing data centers has become far more complex. This isn’t just about needing more space; it’s about requiring advanced technical expertise to address new operational challenges. The rise of AI-driven infrastructure is opening long-term opportunities for service providers who can assist operators with increasingly sophisticated facilities.
A key driver of this complexity is server rack density. Traditional workloads, such as email hosting or database storage, require relatively low power inputs, but AI applications demand immense computational power. Typical colocation server racks draw between 10 and 20 kilowatts (kW), while AI-optimized hyperscale racks can draw anywhere from 20 kW to 100 kW.
These high-density racks generate significant heat, creating thermal challenges. Traditional air-cooling systems have become inadequate, pushing operators to turn toward advanced solutions, like liquid-immersion cooling and enhanced power systems, to meet needs. Implementing and maintaining these upgrades not only increases costs but also amplifies the complexity of facility management.
The data center market itself can be divided into three categories, each with distinct levels of complexity. Enterprise data centers, often located on corporate campuses that support industries like finance or healthcare, handle lower-intensity workloads and represent about 28% of capacity. With less operational complexity, they are the least likely to outsource facility management.
Colocation facilities, on the other hand, introduce more complexity. These shared spaces, where tenants rent racks, require management across multiple clients and seamless physical interconnections. According to the IEA, colocation centers currently account for approximately 36% of capacity and are becoming increasingly central to the market.
At the top end are hyperscale data centers, operated by major tech companies to support mission-critical AI workloads. These facilities demand advanced cooling systems, 24/7 technical oversight, and robust security measures. Hyperscalers account for 37% of current capacity, a figure expected to exceed 60% by 2030 as they expand to meet the increasing AI demand. Due to their intricate operations, hyperscale operators are the most likely to outsource infrastructure management to specialized providers.
This increasing complexity in data centers is driving strong demand for managed services firms. Higher server-rack density and power requirements translate directly into greater revenue potential, while the technical demands of these sophisticated environments encourage longer-term service contracts. The result is a growing, stable opportunity for operators capable of supporting high-density environments.
The rise of AI is fundamentally reshaping the data center market. The focus is moving away from simply adding square footage and toward optimizing power density, cooling, and operational expertise. Investment in Generative AI alone is expected to reach $2 trillion over the next five years, and as hyperscale operators invest heavily, the operational burden is quickly outpacing internal capacity. This shift is creating one of the largest long-term growth opportunities in the data center and facility management sectors, redefining how digital infrastructure is built and maintained.
For more information on related investment opportunities and insights, read CRE Services: A Quiet Champion of the Data Center Boom, by William Blair technology analyst Stephen Sheldon.