The sector is booming and maturing globally — but management challenges lie ahead.
The critical digital infrastructure sector continues to expand and attract enviable levels of new investment. The coming year (and beyond) promises opportunities but also challenges that only some data centers will be likely to navigate successfully.
The Upstime Institutes latest report predicts some of the potential outcomes ahead, including achieving zero-carbon emissions, reducing dependency on cloud, benefiting from processor innovation and ensuring supply-chain resiliency.
For the digital infrastructure industry, 2021 was an unexpectedly positive year, given the mood over the previous 12 months. When the pandemic struck, in early 2020, the global business outlook was very unsettled, with many data center and IT managers fearing major staffing issues, supply chain problems, budget stresses and a severe recession. It was not clear at this stage that effective vaccines against COVID-19 would be developed or that economies would recover so fast, or even that major political upheaval would be avoided.
Heading into 2022, the mood is — guardedly — more positive. Although the threat of COVID-19 variants persists, we can nevertheless repeat many of the sentiments from our Five data center trends for 2021: “The critical digital infrastructure sector continues to expand and to attract enviable levels of new investment. The ongoing build-out of new data centers and networks is largely being driven by cloud, hosted, and other as-a-service workloads…”
Overall, the critical infrastructure sector has adapted well to the pandemic. Fears of major outages, equipment shortages, huge budgetary overspends and a high loss of available staff have largely dissipated. These problems have been both more chronic and milder than feared — balanced by a strong uptick in demand as more people and services move online and more investment is made in resiliency and automation.
At the beginning of each calendar year, Uptime Institute highlights a short list of trends — or predictions — for the year ahead. We try to avoid stating the obvious or repeating the forecasts of the previous year. For 2021, we highlighted five trends that have largely
been borne out and these are detailed in the Appendix. The trends spanned growing demand for more resiliency and accountability; renewed investment in remote monitoring and automation; a belated investment wave in edge data center capacity; a significant increase in sustainability reporting requirements; and, finally, a wave of innovation.
And for 2022? The Institute’s five predictions are unusual in that our confidence level in these predicted trends is not as high as usual, and some are also more contentious. However, the purpose of a prediction (or of highlighting a new trend) is not to be exact, but to provide some insights that may help to inform and guide the industry.
Five data center trends for 2021
- Accountability — the “new” imperative
Enterprises want more cloud and greater agility, but they can’t outsource responsibility — for incidents, outages, security breaches or even, in the years ahead, carbon emissions. In 2021, hybrid IT, with workloads running in both on- and off-premises data centers, will continue to dominate, but investments will increasingly be constrained and shaped by the need for more transparency, oversight and accountability. More will be spent on cloud and other services, as well as in on-premises data centers.
- Smarter, darker data centers
Following a scramble to effectively staff data centers during a pandemic, many wary managers are beginning to see remote monitoring and automation systems in a more positive light, including those driven by artificial intelligence (AI). An adoption cycle that has been slow and cautious will accelerate. But it will take more than just investment in software and services before the technology reduces staffing requirements.
- Edge — the next frontier
Significant new demand for edge computing, fueled by technologies such as 5G, the internet of things (IoT) and AI, is likely to build slowly but the infrastructure preparation is underway. Expect new alliances and investments across enterprise, mobile and wireline networks, and for a wide range of edge data centers, small and large. Smart and automated software-defined networks and interconnections will become as important as the physical infrastructure.
- Sustainability: More challenging, more transparent
For years, operators could claim environmental advances based on small, incremental and relatively inexpensive steps — or by adopting new technologies that would pay for themselves anyway. But the time of easy wins and greenwashing is ending: Regulators, watchdogs, customers and others will increasingly expect operators of digital infrastructure to provide hard and detailed evidence of carbon reductions, water savings and significant power savings — all while maintaining, if not improving, resiliency.
- A surge of innovation
Data center operators (and enterprise IT) are mostly cautious, if not late, adopters of new technologies. Few beyond hyperscale operators can claim to have gained a competitive advantage through technology. However, several new technologies are maturing at the same time, promising advances in the performance and manageability of data centers and IT. Storage-class memory, silicon photonics, ARM servers and software-defined power are ready for greater adoption.