While 2022 has been a year of turbulence due to record-high inflation and supply chain disruptions, it also pushed many organizations to find their post-pandemic footing and reassess their infrastructure and growth strategies. The combination of a tight labor market and the increased cost of capital due to rising interest rates has forced companies to think more creatively and focus more on innovation if they want to remain competitive.
As 2023 gets underway, many industries will continue to rely heavily upon colocation data centers for their ability to deliver that versatility as they push forward with their digital transformation efforts. By keeping a close eye on emerging data center trends, they can develop an IT strategy that maximizes the business potential of colocation services.
Why Watching Emerging Trends Is Important in the Data Center Industry
Third party data centers play a vital role in today’s high tech, interconnected economy. Without their ability to provide efficient power and cooling infrastructure, high levels of system uptime, partner ecosystems, and direct on-ramps to the world’s leading cloud services, organizations would be forced to make heavy capital investments in their own on-premises data solutions. Even companies that rely exclusively on cloud computing services depend heavily upon data centers since those services are made possible by hundreds upon hundreds of servers located in hyperscale facilities around the world.
Staying on top of emerging data center trends helps IT decision makers make better choices regarding their tech stack and networks. Enterprises that have not been following the innovations in colocation services that have greatly improved reliability and connectivity, for instance, could be missing out on valuable edge computing strategies, zero-trust cybersecurity resources, and disaster recovery options.
Data Center Growth Projections for 2023
Despite inflationary pressures, beleaguered tech stocks, and supply chain disruption, the demand for data center capacity will likely increase in 2023. A recent report on the North American market found that the percentage of new megawatts coming online was up 20 percent in 2022, while data center vacancies decreased to an average of 3.8 percent, down from 10.3 percent in 2021. Although more capacity is expected to become available by 2024, 73 percent of the under-construction supply in primary markets has already been preleased.
According to industry insiders, colocation providers are leading the industry in construction time by focusing on retrofitting existing facilities and repurposing other spaces. Bypassing the site selection, region planning, utility coordination, and shell construction has allowed colocation companies to trim as much as six months off their construction schedules.
5 Emerging Data Center Trends for 2022
Here are some of the noteworthy emerging data center trends to watch in 2022.
1. Even Greater Push toward Net Zero
Data centers have been best-in-class innovators when it comes to energy efficiency over the last twenty years. New technologies like intelligent monitoring and AI-managed cooling have helped data centers keep their carbon footprint much lower than other energy-intensive industries. With more and more organizations facing public and regulatory pressure to reduce their impact on the environment, colocation data centers have a tremendous opportunity to help them leverage more sustainable infrastructure.
Hyperscalers are leading the charge with ambitious net zero goals. While carbon offsets and power purchase agreements are powerful tools, in 2023 look for more movement around behind the meter power, and onsite power generation.
2. Hyperscale Edge Deployments
As organizations continue to shift away from office-centric operations, distributed networks that help facilitate remote workplaces will be critical. From gaming, to self-driving cars, to mobile banking enterprises are finding speed and gaining an edge with edge locations. Edge data centers can help enterprises break down their centralized systems to position key assets closer to end users to get better performance, lower latency, and better uptime reliability. In fact, much of the growth in the coming year will focus on shifting workloads to the edge, with the market expected to increase from $44.7 billion in 2022 to $101.3 billion by 2027. As 5G services continue to roll out in 2023, the push to the edge will likely accelerate and fuel continued data center growth.
Flexibility will continue to be a key priority for many organizations as they look for the optimal environment for hosting their data and workloads. The last thing anyone wants is to have their IT spending committed to a deployment that doesn’t meet their evolving needs. Priorities can shift quickly, especially in times of economic uncertainty, inflation concerns, and shifting customer demand. If applications and data are committed to an inflexible environment, organizations could end up wasting resources and find themselves unable to capitalize on new opportunities.
Evoque’s SpendAgility service represents an innovative step forward in the way companies leverage colocation services. Rather than locking customers into their deployment, SpendAgility allows them to shift their colo spend dynamically as the need arises. For instance, a company that initially hosts all of its workloads in a colocation data center may decide instead to shift a portion of their workloads to the cloud and reallocate some of their spending to another facility for either edge computing or disaster recovery. As more companies discover the benefits of SpendAgility in 2023, old-fashioned deployments that limit their flexibility will become far less appealing.
4. Move from On-Prem
The slow but steady transition away from relying exclusively on-premises data solutions has been a trend for several years now, 2023 should see a record number of organizations finally putting their outdated, legacy infrastructure to rest. Few companies have the capital resources to build and maintain state-of-the-art facilities, especially when they could realize greater cost efficiency and performance flexibility by outsourcing to an infrastructure partner.
At the same time, however, fewer and fewer companies are relying solely upon a single location to manage their data and workloads. The ability to enhance control and compliance with hybrid IT and hybrid cloud solutions offers tremendous flexibility and security for organizations that need to be able to adapt quickly to changing business and regulatory needs. Connectivity-rich colocation environments are frequently the best place to design and build these dynamic networks.
5. Growth of Azure and GCP
For the foreseeable future AWS will remain the market share leader in public cloud. In 2022 Azure and GCP made impressive gains that we expect will continue in 2023 as their solution sets increase and multi-cloud deployments grow.
Microsoft’s cloud business saw tremendous growth in 2022, increasing overall revenue by 32% percent. The company expects to see double digit revenue growth in 2023 as it continues to grow hyperscale capacity around the world.
Google, meanwhile, has announced plans to build its first data center in Japan in 2023 and expand new cloud regions to Africa, Malaysia, Thailand, and New Zealand. The company expects to offer services in 41 total regions by the end of 2023. Despite the recent wave of layoffs in the tech sector, Alphabet’s CEO Sundar Pichai has insisted that the company will continue to invest heavily in Google Cloud in the coming year as part of its effort to catch up to AWS and Azure in the global cloud market.
Hit the Ground Running in 2023 with Evoque
Evoque Data Center Solutions offers more than one million square feet of mission critical data center space across North America to provide organizations with the secure, dynamic infrastructure they need to meet the challenges of 2023 and beyond. In addition to flexible colocation services, Evoque also delivers industry-leading cloud engineering consulting to help companies build a versatile hybrid IT environment that empowers their digital transformation strategy. And thanks to our innovative SpendAgility offering, Evoque customers are never locked into a solution that prevents them from adapting to an evolving market or restructuring their tech stack to meet future needs.
To learn more about how Evoque can help you stay ahead of the competition in 2023, talk to one of our solutions experts today.