Growth in the data center market shows no sign of slowing: compute power for artificial intelligence (AI) alone doubles every six to 10 months, and around 20% of global data center capacity is already being used for AI. The data center must keep evolving to support business growth and our demand for data and cloud computing.
It’s a busy time for data centers. In today’s digitally-driven world, data centers are the engines that power our online experiences and much of our daily work and personal lives. At the end of 2023, there were around 10,978 data center locations globally, according to research – and this is set to grow further.
There are different underlying trends for this data center growth. In Mexico, for example, low supply, construction delays, and power challenges are making it increasingly hard for large corporations to find enough data center capacity. Supply shortages have seen price increases for data center capacity, with Singapore demonstrating the highest rental rates at $300 to $450 per month for a 250- to 500-kilowatt (kW) requirement.
According to Telegeography, over 250 new worldwide data center sites are in the current development pipeline, with Asia showing the highest percentage of new deployments. The US, China, India, and Germany head the list of countries with the most new data center deployments scheduled over the next few years.
Several factors are driving the demand for more data centers. First, there is simply more data in the cloud, with cloud competing with AI for data center capacity. Indeed, cloud adoption has grown even more than predicted in recent years, with massive data center leasing deals increasing constantly. AI workloads are progressing at unprecedented rates, so much so that demand for data center capacity began to outpace supply back in late 2022 – and they are projected to grow at a CAGR of up to 36% to 2028.
Data sovereignty is also a key issue, with many countries looking to exert greater control on data collected within their borders, especially since the introduction of legislation like the EU GDPR. So, as more governments, particularly in Europe, have increased requirements for data to be stored within their own countries, more facilities, particularly in smaller cities, are needed.
There’s also the trend for more edge data centers. These are typically smaller data centers closer to end-users, to reduce latency and speed-up processing. They are also popular because they help keep sensitive data local, which increases data security. In addition, by not transferring data to large central data centers, you can free up more resources and bandwidth, which reduces costs and CO2 emissions.
The data center landscape is also shifting towards increased geographic redundancy, with data residing in multiple locations. The reasoning behind this is sensible: one major data center outage incident and valuable data can be compromised or lost altogether. Just because your applications and data are housed securely does not mean they can’t still be at risk.
Major incidents are becoming increasingly common. For example, weather-related power failures in the US are at an all-time high, and natural disasters worldwide have increased ten-fold since the 1960s. Storms and floods comprise the majority of these severe weather events, with over 70% since 1990. These events have an impact on data center safety and security.
With the threat of outages growing, it is prudent to diversify your data center geographical footprint. Putting servers in different geographical locations, known as geo-redundancy or geo-diversity, places them in diverse weather systems and on separate power grids. It’s an insurance policy that’s worth taking to ensure that your data remains safe in at least one location, no matter what happens.
Data centers also face environmental challenges as they consume lots of energy, especially for cooling. However, there are moves underway to focus cooling in data centers on what needs cooling most, rather than trying to cool down the entire building. Free cooling is a more efficient way of cooling the air within the data center, using external air without needing energy-hungry electrical air conditioning. The Orange Group has invested in this technology in its most recent data centers to support its net-zero carbon goal by 2040.
Using renewable sources to cool data centers, such as solar, geothermal, or wind power is important. Google already uses wind energy in its data centers in Chile and Finland. Other approaches to make data centers more environmentally friendly include re-using existing buildings and constructing them from eco-friendly and low-carbon concrete.
Legislators are also turning their focus on data centers. In the EU, for example, new regulations set out sustainability performance standards for data centers by 2025. The industry needs to accelerate efforts to reduce energy consumption and increase sustainability in general in data centers.
To meet these multiple requirements Orange Wholesale is taking action on several fronts. This includes diversifying locations to serve existing customers and meet future customers’ needs. Energy provisioning is key too, and new data centers should ideally have two or three different energy supplies plus systems. The local climate can be a factor in choice of location, as that may help naturally reduce cooling needs.
We’ve focused on identifying key neutral data centers that can help us extend coverage in locations close to our customers, and their customers too. Our ecosystem is made up of first-class partners such as Equinix, Digital Realty, Telehouse and Data4. The data centers we choose offer the best quality of service (QoS) vs environmental impact ratios. They support Orange Group’s carbon emission reduction goals and those of other customers and partners in our ecosystem.
To help us deliver on this, we’re working with numerous stakeholders in the data center space, from hyperscalers and big tech companies like Google, Amazon and Microsoft, to new entrants that have niche value propositions. Our goal is to build partnerships that enable us to pinpoint the best data center locations to place our equipment to serve our customers best today and tomorrow.
