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November 16, 2021

Data Centres: Macroeconomic Trends

By GlobalData Thematic Research

The data centre market is expected to expand with the building of more hyperscale data centres and the introduction of edge data centres. Most enterprise-generated data in the future will be created and processed outside remote data centres or the cloud.

Listed below are the key macroeconomic trends impacting the data centre theme, as identified by GlobalData.

Covid-19

Covid-19 has made the online world even more valuable. The internet has become a lifeline for many businesses, enabling the use of collaboration software and providing an outlet for individuals forced to self-isolate. As a result, Covid-19 has boosted demand for cloud-based services and, at the same time, demand for information technology (IT) hardware and software in the world’s data centres.

Hyperscale providers signed large deals to use complete wholesale facilities, but some sites still sat dormant, even in cities like London, where demand was high, according to real estate firm CBRE. This may change as cloud providers expand their focus and look to increase server capacity in all major markets.

Data centres as a public utility

The increasing reliance on the data centre became an enduring storyline, with much business activity moving online in the face of the Covid-19 pandemic. Data centres and their accompanying information ecosystem are expected to cement their position as a fifth critical utility.

The shift towards utility status will be noticeable in several ways. High expectations for network availability will extend deeper into rural and remote areas, bringing critical applications to more of the population as they need them. That will increase the pressure on data centres to maintain connectivity even at their networks’ outer edges.

Enterprise colocation

The growing costs and complexity of maintaining on-premise data centres, including hosting private cloud solutions, will fuel an enterprise migration out of on-premise data centres during 2021 and beyond. Enterprises are choosing to collocate their IT operations in third-party, multitenant data centres.

Corporate IT workloads will increasingly be shared between providers of off-premise co-location and cloud hosting services as enterprises start to address the cost, complexity, and risk of running servers and private clouds in-house. Organisations are starting to rethink their ongoing use of office space hastened by the impact of Covid-19 and continued lockdowns. Some will want their IT stack to be independent of their offices, in a lights-out critical services environment that supports distributed operations. Data centre facilities will need the available space and extensive reserves of highly concentrated power, cooling, and high-speed connectivity to satisfy these needs.

Data centres – districts

A growing trend in several cities worldwide is the development of data centre districts driven by two factors: market forces and public policy. Developers are creating ambitious projects, buying adjacent properties, and tearing down existing buildings to create new data centre campuses. Examples include Santa Clara in Silicon Valley and Ashburn in Virginia in the US. Local government has even started to showcase their local internet industries, with improved signage identifying local data centre districts.

This is an edited extract from the Data Centers – Thematic Research report produced by GlobalData Thematic Research.