Four Factors Shaping the Data Center Market

Unprecedented Demand is Creating Challenges Across the Industry

1. Capacity Constraints

The increased use of data-intensive technologies such as cloud computing, Internet of Things (IoT), artificial intelligence, edge computing, and streaming services requires greater processing power and storage capabilities. However, space and power constraints make it difficult to expand data center capacity. Data center operators face rising real estate costs, particularly in urban areas. Strict zoning regulations and sustainability requirements designed to minimize the environmental impact of data centers further limit available space. Aging electrical grid infrastructure is another limitation, making it difficult to support power-hungry data centers.

2. New Approaches to Sustainability and Efficiency

With hundreds or thousands of servers running around the clock, data centers have a significant environmental impact. Power demands stress local electrical grids and contribute to greenhouse gas emissions. Cooling systems require massive amounts of water - up to 5 million gallons a day for the largest data centers. That strains local resources and ecosystems at a time when extreme heat and drought have already depleted reservoirs, rivers, and aquifers.

To address these issues, more data centers are incorporating solar power and other renewable energy sources to reduce their electricity consumption. They are also using air-cooled chillers that recirculate water in a closed loop to reduce their water use.

3. Physical Security Threats

Cybersecurity is always among the top priorities for data center operations, but improving physical security has become an area of increased focus. Analysts say the likelihood of physical attacks and sabotage has increased substantially in recent years. For example, the FBI foiled a 2021 plot to bomb an Amazon data center in Virginia.

According to one recent study, more than 70 percent of IT security executives say physical data center threats have increased dramatically since 2020.² To mitigate the risk, data center and colocation facilities are increasing investments in physical security solutions such as video surveillance, access controls, fire suppression systems, and physical barriers such as fencing, walls, and bollards.

4. The Growth of Colocation Facilities

More than 90 percent of IT leaders are considering moving critical workloads from the public cloud to a colocation facility, according to CoreSite’s State of the Data Center Report for 2023.³ Leasing space in a provider’s data center allows companies to address cost, security, and environmental concerns.

Colocation can eliminate upfront capital investment for infrastructure, cooling, power, and equipment, instead paying for the services and resources they use on a subscription basis. Colocation facilities typically feature hardened physical security measures along with advanced network security features. Finally, colocation facilities consolidate resources from multiple organizations, leading to more efficient utilization of hardware and reduced overall energy consumption.

Conclusion

Increased digitization is driving the need for more data center capacity, but demand currently outstrips supply. See how the data center professionals at Wesco can help you develop strategies that meet your current and future requirements.

¹ Data Center Frontier, 2023

² Data Center Knowledge, 2021

³ CoreSite State of the Data Center Report, 2023