Data Center Trends to Watch in 2023

Data is considered to be the new oil and is now virtually valued more than oil. Data is digitally synonymous with crude oil because it is needed as a fuel and to run businesses around the world just like crude oil is essential as a fuel to power machines and vehicles. But there is a stark difference between the two. The quantity of crude oil has been on a constant decline since the beginning of its usage, whereas digital data has been increasing in quantity every single day.

If companies don’t make wise use of their data then their businesses might just witness a drastic drop in performance. The wise usage includes every aspect of interacting with data, i.e. storage, high computing power, good connectivity of servers for smooth transfer of data, and skilled professionals working on data for analysis. The more the data increased by every passing year, the more the need of handling that data increased.

Back in the day before the Internet and even a few years after it, connectivity among people around the world was minimal and so was the amount of data. Fast forwarding to this day, with the rise and evolution of technology and the reliance of businesses on the Internet for connectivity and reach, the amount of data that emerges with it has never been larger.

Over the years, to manage this large amount of data, we have come up with storage capacities, processing power, and network connectivity that became better incrementally with time. We have reached the point where we can store huge data and run computations on it in a different location and can access it from elsewhere.

In this day and age, there are two major storage and computing services apart from hosting in-house storage servers, i.e. cloud services and data centers. One might ask what would companies prefer between the both. The answer is, it depends. Both cloud platforms and data centers provide almost similar features such as storage, computing, networking, and analytics. Cloud platforms provide these facilities on a pay-as-you-go pricing by putting a veil on the hardware and infrastructure underlying them. Some companies do not need access to the hardware and other infrastructure to carry out their tasks but those who do need them with additional flexibility, customization, and ownership might opt for data centers.

The following are some important types of data centers:

Enterprise Data Centres: They are developed and owned by an organization mostly for its employees.
Colocation Data Centres: The space and resources of a data center available for other people to rent are known as a colocation data center.
Hyperscale Data Centres: Data Centers built especially for processing a large amount of data and maintaining scalable applications.

With the advent of versatile cloud services provided by companies like Amazon Web Services (AWS), Microsoft Azure, Google Cloud Platform (GCP), and many more, one might say it will give data centers a run for their money. But many qualities overpower those of cloud services such as decreased latency, higher levels of performance, increased levels of security, increased levels of control, and data sovereignty.

Due to this reason, the data center industry is predicted to expand over the coming years.

As per the report by Statista Market Forecast, the Data Center industry in the United States is predicted to grow by 4.12% by 2027 resulting in a market volume of US$117.50 Billion in 2027.

Considering these aspects, let’s take a look at some of the data center trends to watch out for in 2023:

Fluctuating maintainability and the rise of green data centers

Infrastructure inside the data centers needs a significant amount of resources to maintain it properly. Cooling of the servers, generating constant power to keep the servers running, and other maintenance costs. According to research by Ernst and Young in December 2022, the data center industry contributes to 4% of greenhouse emissions.

Since environmental conditions have gone downhill due to increased global warming, governments are enforcing the use of sustainable sources of energy to generate electricity to protect the environment. While these sustainable sources could power smaller data centers with less amount of data to handle, they are not easily able to power hyper-scale data centers. If one has to use solar power to generate electricity for hyper-scale data centers then it would require solar panels covering multiple football fields which may or may not be cost-effective for some countries.

In 2023, it is predicted that as governments around the world are encouraging the usage of renewable sources of energy, they will increase the budget for it and it may be beneficial for data centers around the world.

Increased need for better hardware and infrastructure

With the exponential advancement of technologies like Artificial Intelligence and Machine Learning, providers of IT solutions around the world are required to keep up with the game, and data centers are no exception. They need better and more robust hardware and infrastructure than ever before to handle the complex computations that come with implementing AI and ML algorithms and processing big data. They need better-cooling systems, better cabling and switch network,s and expert IT professionals for troubleshooting. Earlier, this kind of processing power was only seen in the infrastructure of massive research institutes but now it has become so commonplace at data centers, especially the hyper-scale ones.

Small-scale data centers will increase in number

With the rise of 5G technology in the telecom industry, companies strive for the lowest amount of latency for their customers. Since data centers provide decentralized support for computing and memory services, more data centers are required now than ever. Here, small-scale data centers come into the picture. These facilities will now be located at different locations locally where data is being generated.

Need for better cybersecurity

With more companies relying on data centers to conduct their businesses, there comes a dire need to increase the security of the data. Due to the nature of infrastructure in data centers where multiple software and technologies are used, it is not difficult for malicious hackers to find loopholes and vulnerabilities. This can leave businesses of thousands of companies at risk. Solutions like prevention of network-based exploitation using intrusion prevention systems, deploying system firewalls for small and large-scale applications, etc. will be used to protect data centers from security threats.