APAC will be the world’s largest data centre market by 2025
A new report from industry analyst firm predicts that global investment in the data centre industry will almost double over the next few years as industry spending expands from $244.74bn in 2019 to $432.14 by 2025, at a CAGR of 9.9%.
While North America currently leads the world in terms of annual data centre investment and maturity, by 2025, a number of factors are expected to push of the global market. North America will slip into second place, with EMEA coming in third.
Increased adoption of IoT technologies, as well as the widening use of Big Data applications and the global 5G rollout will be the primary drivers behind this growth trajectory, as well as sweeping expansions of digital economies in emerging markets.
First & Sullivan’s report points specifically to developing asian markets like and which it notes are still in a relatively “nascent stage” compared to more mature data centre regions like the US and the Nordics.
Construction in these markets is also “in its infancy”, notes the report, and the two factors combined point towards these developing markets exhibiting huge growth over the coming years.
"The move from enterprise to cloud and colocation data centres will gain momentum because companies can reduce capital and operational costs by avoiding investments in hardware or software infrastructure and reducing maintenance and space requirements," said Manoj Shankar, a research analyst at Frost & Sullivan.
"Additionally, 5G will move processing closer to the point of data collection, leading to increased deployment of micro and edge data centres and driving investments in new and next-generation data centre technologies."
Advances in edge computing, AI and 5G will drive increased data centre activity while creating a number of new opportunities for operators in the space, with innovations like connected homes, AI, game streaming, autonomous vehicles and mixed reality all propelling edge data centre adoption to new highs. At the same time, the demand for high performance computing (HPC) infrastructure will also continue to grow as increasingly powerful AI is required to handle larger and larger datasets.
Shankar added, "Onsite cloud data centres will become crucial as companies will require critical data to be kept in-house or at a nearby location, thereby lessening the security risks such as data theft. Further, given the high demand for modular data centres and competitive pressures, modular data centre manufacturers need to innovate in this space and come up with advanced concepts that allow additional flexibility and modularity."
Equinix: Digital leaders expect changes to working patterns
A global report released by Equinix has revealed that digital leaders expect long-term changes to the way people work.
As part of the report, the data infrastructure company surveyed 2,600 IT decision-makers from several different businesses spanning 26 countries in the Americas, Asia-Pacific and EMEA regions. The study also highlighted the biggest technology trends affecting global businesses and how the COVID-19 pandemic has impacted digital infrastructure plans.
Talking about companies’ expansion strategies, Claire Macland, Senior Vice President of Global Marketing at Equinix, said: “Many companies are now investing more in their digital infrastructure to enable them to embrace a hybrid working model and thrive in the new world of work we all find ourselves in.
“Despite headwinds in many sectors, many organizations are continuing to expand physically and virtually into new markets and regions around the world”, she said.
The report drew the following conclusions:
- 64% of the 2,600 digital leaders surveyed believed there will be “long-term changes to both how and where people will work in the future.
- 57% of global companies intend to expand into new regions despite the effects of the pandemic
- 51% of businesses worldwide say they have rearchitected their IT infrastructure so that it can meet the demands of remote and hybrid working. Digital transformation has also been accelerated due to an increase in businesses’ technology budgets.
How might digital transformation be affected post-pandemic?
COVID-19 has demanded that companies make several changes to the way that they operate, including digital transformation. According to the study, 47% of those surveyed reported that they have accelerated their digital transformation plans because of the Coronavirus pandemic. A further 42% of organisations said their budgets have increased to keep up with the growth of digital transformation.
Another change in adapting to the pandemic was to businesses’ IT strategies with six in 10 companies saying that it has been revised in response to the situation. 58% said they are looking to invest in technology to “improve agility’ post-COVID.
When asked about their priorities for their digital strategy, 80% of respondents said that digitising their infrastructure was of utmost importance, while 57% viewed interconnection as a ‘key facilitator’ of digital transformation.
"This increasing focus on digitization and expansion is one of the reasons why Equinix has continued to invest in its own growth. We completed 16 new expansions in 2020—our most active build year ever—and expect to continue to evolve Platform Equinix to support our customers as they continue on their digital transformation journey”, said Claire Macland.
Potential concerns disperse over expansion plans being halted by COVID-19
The study has also revealed that organisations’ previous concerns that the pandemic will negatively affect their business expansion plans have been lessened.
57% of businesses have said that they “still have plans” to expand into new regions and of that percentage, nearly two-thirds (63%) plan to do so virtually instead of investing in physical IT infrastructure.
The full Equinix report can be found here.