Data Centres: Balancing progress and responsibility
The data centre industry has been in the public eye on a much wider scale since the beginning of the pandemic, with the increased exposure driven by industry and the public alike turning to digital means as an answer to Covid induced restrictions. Demand for data centre services, and in turn supply expansion, has surged across markets in 2021, with London alone recording a 24% rise in data centre capacity over the past year.
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So what does 2022 hold for the industry? We expect that three main themes will dominate:
- The Tech giants will broaden focus beyond the core markets.
- Edge will emerge as a central component of digital business strategies.
- The push for ‘Green solutions’ will create conflict.
With forecasts indicating that business transformation spending will increase by 15% in 2022, we can expect business demand for data centre solutions to grow sharply. Significantly, firms are looking beyond digitalisation as just a survival mechanism and are increasingly accelerating the role of digital or digitally enhanced service offerings. The Cloud is sure to be the enabler to many ambition, which will add further fuel to the appetite of the major Cloud providers to increase both market share in core data centre locations, and gain a foothold in new, under supported markets.
An emerging component of service digitalisation will the need to capture, process and analyse data near where it is created or the end consumer otherwise known as Edge computing. Businesses and consumers are prioritising speed of service, meaning low latency in a vital feature of service delivery. A recent report from GM Insights projects that the Edge data centre market will register annual growth of 23% each year up to 2026. As a natural extension of cloud computing, the edge is considered essential to facilitate the widespread deployment of the Internet of Things (IoT) and a global sharing economy. We expect that it will come to prominence in the data centre ecosystem in 2022.
The predicted growth of data centre services and associated uplift in power consumption, is sure to generate new conflicts between data centre development and climate targets in the coming year. The dynamics and the apparently conflicting demands of digitalisation and sustainability have been tested in recent years, with authorities in the major markets of Amsterdam and Singapore imposing a moratorium on data centre development. The Climate Neutral Data Centre Pact – a commitment to make data centres climate neutral by 2030 was agreed in 2021 by 22 EU trade associations and 57 European data centre operators. The pressure of power resources will continue to test the resolve of local authorities, however. Expect in 2022, intensification of clean data centre technologies and investment into the use of renewable energy.