We are living through a digital revolution that is transforming the way we work, shop, travel and spend our leisure time, as well as how business, academia and governments operate.
A phenomenon that was already moving at pace has been supercharged by the pandemic lockdowns that led growing numbers of us to work from home, shop and download our entertainment online.
The digitisation of the world runs on data – according to Statista, more than 64 zettabytes of data (a zettabyte is a trillion gigabytes) was captured, copied and consumed globally in 2020 and over the next five years that figure will almost triple to more than 180 zettabytes, an unimaginable figure.
Just 2% of this newly created data was saved and retained into 2021, but 2% of 180 trillion GB is still a huge amount of data to store. That’s why data centres had 6.7 zettabytes of storage capacity in 2020, a figure set to grow 19.2% a year from 2020 to 2025. That is big business – $192bn will be spent on data centre systems in 2022.
Data centres comprise three key elements – compute, or the process power and memory that runs the applications, which is provided by servers; storage; and networking, which connects the different components within the data centre and with the outside world.
Having handed over the running of their website to an outside provider, the logical next step for companies was to let them manage other data operations, a process known as colocation – either by putting their own servers in a data centre or renting server space to run some applications remotely, such as email, storage or back-up.
The stage was set for the rise of cloud storage.
More than 90% of enterprises have adopted the cloud in some form, according to Accenture, because “it has offered greater flexibility, more agility and new opportunities for innovation”.
The cloud enables organisations to store and manage their date offsite, or rather have it managed for them. They save money because of the economies of scale and expertise that dedicated data centre operators can offer. “Unless you migrate the majority of your workloads to the cloud, you will not be able to realize the full business value, including making your business more efficient, resilient, and customer focused,” Accenture warns.
As firms consider the possibilities of the cloud, it has become clear that some data applications, such as high frequency trading, are ‘low latency’ applications that need to be close to their end users to perform at their maximum potential. But for others their location is less important, if not irrelevant, to how they perform.
Apps that crunch numbers for hours, days or even months, are totally latency insensitive, so they can be located in cheaper and more energy efficient data centres, cutting both capital and operating costs. Examples of these applications include weather forecasting, genomic sequencing, protein engineering, natural language translating and even some financial models that use enormous machine learning models.
As demand for data storage has surged, the number of data centres has grown and their size has, too. These new giants of the data storage world are known as hyperscalers, and between 2015 and mid-2020, the number of hyperscale data centres more than doubled, according to research firm Synergy.
The importance of data centres was brought sharply into focus by the pandemic and a growing number of countries, including Germany, treat the sector as critical national infrastructure, while the UK gave data centre employees key worker status to ensure the nation could stay online.
The pandemic gave the sector a massive boost (and presented it with a massive challenge at the same time), with huge numbers of people not only suddenly working, learning and shopping from home but also downloading huge amounts of music, games, films and other entertainment services. That meant that many cloud customers used a lot more of their storage capacity than previously, and not just at peak times.
While these behavioural changes were specific to the pandemic, they have changed many activities – such as remote working – for good. It is not just employees that will increasingly be remote. Data will be, too. That means demand for data centres will remain strong and more hyperscale – and larger – centres will be built – and not just in the major markets of Frankfurt, London, Amsterdam, Paris and Dublin. Other cities such as Berlin, Madrid, Milan and Warsaw are also seeing strong growth.
However, the disruptions caused by Covid have slowed progress on providing new facilities due to delays in planning processes and shortages of labour and materials.
And another issue is becoming ever more prominent – the enormous amount of energy that it takes to run these facilities.