What are data centers and how are they impacting the IoT (Internet of Things)? Data centers are like a backbone, supporting the internet and, by extension, the IoT. Typically, a data center serves a as a facility that stores IT infrastructure and all the systems required to keep this infrastructure up and running.
Research from Technavio suggests the global data center market is expected to increase by $97 billion during the five years leading up to 2022, to about a 10% compound annual growth rate between 2017 and 2022.
Arizton puts the total global market size for data centers at $174 billion by 2023.
Technavio’s ATA predicts particularly strong growth in the data center market in the Americas, Europe, and Southeast Asia. In Europe, for instance, the research firm suggests the GDPR (General Data Protection Regulation) will help fuel $25 billion worth of growth by 2023. And that’s because the GDPR rule is encouraging many vendors in the European Union to construct data centers in this region.
Looking at just the U.S. slice of the data center market, Arizton has some projections for that too. It says the market will be a $10 billion market by 2023.
Alongside of the GDPR in the EU, what else will contribute to data center market growth in the U.S. and globally?
The main reason is simply because so many organizations in so many industries are somewhere on the road to digitization. There has also been a marked increase in organizations’ need for cloud storage.
Technavio points to other trends too, like quantum computing, that will help drive data centers in the coming years.
One trend that’s definitely impacting this space is the incredible demand we’re seeing from hyperscale cloud users. Hyperscale cloud users are companies like Amazon, Facebook, Google, and Microsoft, among others.
In the next couple of years, we’re probably going to be looking at more than 600 hyperscale data centers. These data centers are going up all over the world.
They’re in Mumbai. They’re in Oregon. They’re in Sweden. We are even seeing a data center in Iceland on a former NATO base.
The growing data center market is going to boost related industries, such as the global data center power market and the data center construction market. Because data centers are an increasingly big source of revenue, governments are looking to attract data centers to their regions, in some cases by offering tax incentives.
For example, a couple of years ago, the Swedish government slashed taxes on the electricity used by data centers by 97%. In fact, many forward-looking governments have already recognized the value in incentivizing data center growth.
For instance, if you put a sales tax incentive on computing equipment, thereby incentivizing data center providers to build, it could bring thousands of construction jobs and inject billions of dollars into the local economy.
Data center campuses also generate property taxes to help fund the communities they’re in.
The data center construction market is also being shaped by the spike in data center demand. The need for rapid data-center facilities delivery is changing how construction companies go about building these facilities.
Increasingly, off-site construction is the most effective way to deliver a data-center facility on time and on budget.
What is meant by off-site construction? Typically, this involves the prefabrication of walls off-site, and then assembly onsite. This does a couple of things.
First, it makes for faster construction. You can accomplish tasks simultaneously that once had to be done sequentially. And second, it cuts costs, largely because it’s faster.
Data centers are growing in popularity. Hyperscalers are trend setters. But, data centers aren’t just for the big guys anymore. The money ticket is for anyone. Any company, organization, or entity that generates or uses data can benefit from investing in data centers. We are seeing it more and more every day, in every industry.
However, before jumping into anything. Think about sustainability. Sustainability is becoming more and more important in every business sector, and that includes data centers. If you’re investing in this space, you need to think before you act. Deploy strategies that lead to more efficient data centers. This could include renewable power sources, but it should also include minimized water usage. Don’t be a green blob.
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