Data centres are a key element in modern IT infrastructure and continue to see rapid growth

Today, more companies are outsourcing data operations. These data centres provide physical space for servers, power and cooling systems, as well as connections to local communication networks

Data centers are the backbone of our digital world, providing the infrastructure that enables cloud computing services and Internet-connected devices. However, the industry continues to grow at a rapid pace.

In fact, data center market demand is expected to continue its surge over the next several years.

The global data center market was valued at USD 220 billion in 2021 and is projected to attain a market size of USD 311.63 billion by 2028 at a CAGR of 5.10% during the forecast period (2022–2028).

In turn, this growth is leading to a need for more data center space, which some say could be expected to become scarce over the next few years.

Data center growth is also being driven by increasing demand for Internet-connected devices, particularly those used in smart cities, industrial automation and other IoT applications.

In addition, organisations are experiencing a growth in data volume, which is leading to an increased need for storage capacity and more powerful computing capacity.

The growing demand for business

The growing demand for data center infrastructure is a good thing for businesses, as it provides them with ample opportunity for growth and investment.

With demand for data center services rising, organisations can expect to see an increase in the amount they spend on data center capacity. In other words, businesses of all sizes can expect to see a rise in their data center costs.

The increase in the demand for data center infrastructure is likely to create a shortage of space, making it increasingly difficult for organisations to find the capacity they need.

This shortage is likely to be exacerbated by the fact that capacity is expected to be in high demand in emerging markets, as well as among major global players.

Chipmakers worried about possible slow growth.

The chip industry’s strongest sector, data centres and cloud computing, is becoming a concern because customer demand for cloud-based entertainment has started to wane.

The sector has been a key beneficiary of the post-financial crisis COVID era, as companies re-engineered their offices. However, as consumers gain access to entertainment across different devices and outside of the home, the demand for cloud services is decreasing.

Big Tech companies say that advertisers have been tightening their purse strings as consumers and economists debate recession signals, as 40-year-high inflation weighs on them.

Data Center Market Investments

According to a CBRE report series ‘Capturing the Cloud’, 31% of investors said they were interested in investing in data centres throughout the Pacific by 2022, up from 2% in 2018. The jump was the sharpest of any alternative asset class, with a 29% increase since 2018.

The data centre sector is extensively examined in the report, from investment options to the major location opportunities in the Pacific. Everything investors need to know is included, from data centre types to location opportunities to the investment drivers, risks, and more.

The increase in data demands has been driven by the prevalence of Australians working. In addition to rising office costs and a growing data centre demand, outsourcing data storage is driving data centre demand.

Furthermore, the increase in data collected by the public sector, combined with more connected devices, has led to an increased demand for enhanced cyber security and modern data centre facilities.

As for the Australian businesses, in 2022, the asset class cloud computing services is firmly on the agenda because of the restrictions and governance, in which 69% of businesses can only consider local market services.

The rapid expansion of technology

• Data centres have been significantly affected by the rapid expansion of technology in today’s world.

• The data centre skills gap, a delicate problem across the world data centre industry, continues to be a formidable issue.

• Data centres are booming, impacting both the computing industry and a variety of other sectors, according to current estimates and future projections.

• The years to come are likely to produce heated debate over how widespread the data centre personnel skill gap remains.

There has been a hybrid approach that combines co-locations and new technologies, as well as the need for an in-house data centre team, and how common this problem is likely to remain in the years to come.

Data centre trends

• Edge computing

The data centre market will experience significant growth thanks to edge computing.

As people increasingly adopt smart technology, both at work and at home, the demand for edge computing devices will also increase.

This will have a significant impact on data centres as decentralised computing power will play a critical role in future data centres.

According to statista.com, the global smart home market is expected to reach $53.45 billion by 2022.

• Sustainability

Data centres must work towards sustainability as businesses become more conscious of climate change and demand swift action.

According to the David Mytton blog, data centres accounted for 1% of the world’s energy consumption. However, data centre energy consumption did not increase proportionally with workloads between 2010 and 2020, which grew 6-fold while consuming the same amount of energy.

The development of data centre technology, such as new CPU technologies and more energy-efficient storage solutions such as Non-Volatile Memory Express (NVMe), is indicated by these numbers.

• Automation

The online work shift was one of the consequences of the global pandemic. At the same time, the number of employees allowed on-site was significantly reduced in many nations.

Data centres of the future may handle such issues by fully or partially automating work using AI and Robotic Process Automation (RPA) solutions.

Meeting Future Storage Needs

An ever-growing number of new applications for artificial intelligence and machine learning are driving the demand for next-generation data storage, management, and transportation solutions.

Machine-to-machine technology, for example, generates huge quantities of data that are expensive to transfer. Data centres are collaborating and sharing resources to form larger data centre districts or corridors, one of which is colocation and/or cloud ecosystem integration.

Extended Summary

There are currently about seven billion Internet-connected devices in this age of data, and that number is increasing. Data must be captured, routed, stored, evaluated, and retrieved for many of these devices, particularly those associated with the Internet of Things (IoT) and Industry 4.0.

More businesses are outsourcing their data operations to third-party providers that specialise in data center operations. Colocation data centres are particularly popular because they provide physical space, power, and cooling systems as well as server storage and connectivity to local communication networks.