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How is Demand Driving Data Center Market Growth

By: Joseph Mileo on May 17, 2019

Technology is rapidly changing the economic landscape and creating new opportunities for more organizations to consider how they can expand their IT solutions to capitalize on emerging markets. However, many companies aren’t giving much thought to how data centers, especially smaller operations can play a significant role in helping support leveraging new technologies in a way that will allow them to be more effective and efficient.

The demands for new services are driving a dramatic period of data center market growth. Over the next few years, data center growth statistics are not only expected to increase by 12-14 percent per year, but a staggering 50 percent of all data traffic in the world is expected to pass through the largest facilities alone. Companies are already investing heavily to construct new data centers and retrofit existing facilities to incorporate the latest industry standards.

Data centers are far more than depositories for information. These facilities provide a wide range of services that make them invaluable to companies of all sizes and industries. There are a number of ways that the demand for these services is driving data center growth trends.

How Demand is Driving Data Center Market Growth

Edge Computing

Today’s businesses need to be able to deliver services to customers where they are. The days of simply providing access are long gone. Customers not only want access to the services they need, but they also want to access them now. Considering that 40 percent of visitors will leave a website if it takes more than 3 seconds to load, speed isn’t just a luxury anymore, but a necessary feature.

For many companies, edge computing provides the solution to delivering content and services quickly. Since network latency is a byproduct of distance and bandwidth, pushing key processing functions to the edge of the network and closer to end users can dramatically improve performance. This has led organizations to rethink their data center strategies, making use of smaller edge data centers in growth markets rather than concentrating solely on larger markets. These dynamics are directly driving data center growth trends.

Internet of Things

As the Internet of Things (IoT) becomes more popular, organizations are facing significant challenges in building and maintaining the networks that allow them to capitalize on this technology’s potential. Capable of generating massive amounts of useful data, IoT edge devices present a tremendous opportunity for companies willing to make the investment in the IT infrastructure necessary to support them.

From medical devices to autonomous vehicles, IoT edge devices are already transforming a diverse range of industries. Many of the companies affected don’t have the resources or expertise in place to fully take advantage of the latest IoT innovations. Fortunately, they’ve been able to leverage the power of local data centers to implement the network infrastructure and data management necessary to facilitate the delivery of their IoT strategies a reality, which in turn is driving data center growth trends.

Digital Content

According to Pew Research, 77 percent of Americans are going online on a daily basis and 26 percent are online “almost constantly.” About two-thirds of Americans have broadband access, either through their home internet service or through smartphones. In an increasingly connected world, more and more content providers are moving to purely digital forms of distribution. DVD and Blu-ray sales, for instance, have plummeted over the last five years as customers turn to streaming services for their entertainment needs.

In order to keep up with the insatiable demand for these digital services, companies will need to expand their data center infrastructure. Whether it’s building more hyperscale facilities or using edge data centers to cache high-demand content and reduce latency for local users, content providers are investing heavily in new facilities to position their content services for future success.

Data, Data, and More Data

The sheer amount of data being generated each year continues to astound, and it shows no sign of slowing in the future. As organizations continue to expand their data collection capabilities, their storage needs will grow with them. Data centers provide an obvious solution for companies struggling to manage the vast amounts of data they’re gathering on customers and user behavior. With more hyperscale facilities capable of storing massive amounts of data being built around the world, the demand for storage is clearly driving data center market growth.

To complicate matters, much of the data being gathered is an unstructured mess. While there are tremendous insights to be gained from that information, it’s impossible to sort through so much data without the use of powerful analytics programs. Unfortunately, these machine learning programs require extensive computing resources and the power to drive them. These resources are usually beyond the capabilities of most organizations, leading them to turn to data centers to provide the necessary infrastructure and driving market growth.

Hybrid Cloud Architecture and Multi-Cloud Solutions

Although more and more companies are choosing to migrate their IT operations to cloud-based solutions, many of them are hesitant to embrace a fully public cloud. They may want to have the convenience and lower costs of cloud storage or cloud computing, but a public cloud may not provide the same level of security or reliability that their business requires. In extreme cases, they also don’t want to be stuck looking for a new home should a public cloud provider go out of business. Rather than relying strictly upon public cloud providers, these companies can find customized solutions that meet their specific needs through a data center.

For some organizations, this could mean implementing a hybrid cloud architecture. Hybrid clouds consist of two distinct network environments: a private cloud server maintained by the company and a public cloud provided by a third party. Configured to work together, hybrid clouds typically store essential, mission-critical data and run core processes in the private cloud while using the computing resources of the public cloud to perform more specialized tasks. While hybrid cloud architecture is versatile and offers numerous advantages, it must be custom built to accommodate the needs and capabilities of a company’s existing network.

Multi-cloud models are a bit more varied than hybrid cloud architecture. While a hybrid cloud always consists of a private and public cloud environment, a multi-cloud can consist of multiple public clouds from multiple providers. While a private cloud can be incorporated into this network architecture, it is usually more isolated from the public components. Multi-cloud deployments allow companies to pick and choose from various cloud services to cater their solutions to every department’s business needs. The connectivity options available in a carrier-neutral multi-tenant data center make them the ideal environment for building a multi-cloud solution.

As organizations try to position their IT and network infrastructures to take advantage of future opportunities, data center growth statistics are keeping pace with those demands. Data centers provide the foundation for the network and computing solutions that will enable companies to capitalize on emerging markets and keep pace with rapidly changing technologies.

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