The data center industry continues to shift and evolve as more and more customers become digital-native. Gartner predicts the worldwide spending on digital transformation and IT services will cross USD 3.8 trillion and on data center systems to cross USD 195 billion in 2019. Going into the ‘New Year’, customer digital transformation will continue to drive the creation of value, growth, and competitive advantage through new product/service offerings, innovative business models, and deeper business relationships. However, CIOs of most organizations need to realise that the key to successful transformation lies in converting their data centers from just being the back-office enabler of internal business processes to increasingly playing a leading role as the engine powering digital business flows between people, things, and data. IT leaders driving this critical transformation need to understand the impacts that MSPs, CSPs, alternative energy, edge computing and software-defined will have on data centers, storage and Colocation in 2019 discussed below.
Colocation & cloud will thrive: Colocation and Cloud will play a major role in 2019 as more as more businesses will allocate resources to where they are most needed rather than invest in building their own distributed centers. Instead they will be looking to partner with companies that specialise in running data centers. Also, the need to secure growing volumes of dispersed data generated will drive businesses to set up and operate data vaults in multiple colocation facilities. IT asset spending on nearby colocation facilities versus core data centers is likely to become a driver of digital services to local users and things. Businesses will also shift internal investments to deploy dedicated cloud platforms to launch innovative services rather than investing in modernizing existing data centers.
Edge will scale out: Edge investments will significantly accelerate in 2019. According to Global Market Insights, the edge data center market is projected to hit USD 13 billion by 2024. Driven primarily by the decentralization of IT workload, businesses are building smaller data centers in regional locations to bring services and compute closer to the customer. It’s potential to reduce latency will enable businesses to meet the demands for high-quality digital experiences moving forward. Also with businesses increasingly adopting IoT, collecting massive amounts of data at the edge, data centers will continue to scale, but they will scale out, not up.
Alternative energy options will make an entry in India: Data centers consume 2% to 3% of the world’s total electricity and have a carbon footprint that only revivals the airline industry. By 2020, this power consumption is expected to reach a staggering 73 billion kWh. For this reason, the industry has been feeling the heat over the last decade, leading to operators becoming more proactive in minimizing the environmental impact of their facilities. Some of the prominent companies of the world like Apple, Google, Telstra, Equinix, Digital Realty and NEXTDC are adopting renewable energy solutions in their data centers. While this trend has established a solid ground in developed economies, it is gaining popularity in India as well. Energy storage solutions in India are being fine-tuned with the government’s push towards more renewable and green energy concepts such as free cooling and waste recycling. And its potential to go 100% solar could prove to be a boon for the industry in the future. According to Technavio, the worldwide green data center market is forecast to grow by 14% annually, exceeding $55 billion by 2021 as customers increasingly make sustainability a top priority when selecting a provider.
Data center security will remain paramount: Financial damage of data breach has grown exponentially over the years. It costs companies now $3.86 million each on average, according to a recent 2018 Cost of Data Breach Study. In addition to data breach, data centers also need to address many issues around physical security as well as security of their IT workload. Which is why large enterprises, typically with more data and devices to lock down, are primarily increasing budgets due to growing security concerns. The year 2019 will bring further a tightening of security standards and a higher profile for the rapid adoption of leading-edge security techniques, tools, and software across the data center industry.
Automation and AI will further drive data center efficiencies
Today’s complex technology driven business environments require a shift away from gut-feel or human decisions to more data-driven decisions. Companies still face the challenge of leveraging the amount of data available within their data centers. In order to address these changes increasingly businesses will implement IT assets in data centers, that will have the ability to run autonomously using embedded AI functionality that leverages smart IT and facilities systems. AI will be implemented to provide failure recognition, predictive analytics and other functions within I&O. And enable businesses to do more and at faster rates, scale up infrastructure without necessarily having to grow headcount. AI and autonomous operations will disrupt the market by bringing in major shift in the talent department. The array of skills that will be sought and valued within IT organizations and colocation partners will be completely different from what is currently accepted in the next few years.
In a digital economy where owning the customer experience is the goal, businesses place a premium guaranteeing response time and rapid but secure data movement. Greater use of automation and AI, cloud, edge, and the creation of a service delivery edge will dominate data center decisions.