Digitization and the Data Center Operations Tsunami

The path to digitization has been fraught with an almost debilitating underestimation of the disruption required. Data center operations, however, have served as the cornerstone for the inevitable change.

As the transition to digitization occurs at a global scale, the market for data centers has seen manifold growth. Across the USA, but also across Asia, data center construction has taken centerstage to keep up with quantum computing demands, the advancement of big data analytics and the deployment of automation solutions. The expertise for specialized data center architecture lies has also bred immense competition amongst the biggest players in the industry. Considering that the business world faces a point of no return when it comes to crossing a digital threshold, the rush towards that point has been rapid and unabated.

The need to be able to process the amount of data available today has become pressing from across industry sectors, and the efficiency of today’s technology has aided the establishment of the data center operations as foundational. The market itself is a highly concentrated one (source), with the established presence of the biggest players posing significant barriers of entry. According to sources, some of the biggest players, such as Intel, are betting on their data center operations capabilities to power their near-term growth. The switch to digitization is a significant milestone for most, though, and the choice of whether physical data centers or the cloud is the most viable option is dependent upon the capacity requirements, and the operational ones.

A divide or a convergence?

The global data center market size has been showing rapid growth, with an incremental growth of almost USD 97 billion predicted by 2022. Driven by the growing dependence on quantum computing for scaling up functions across the board, the organizations opting for storage in cloud data centers rest on the accomplishments of Amazon Web Services, Google Cloud and Microsoft Azure. Also at a crossroads is the IoT industry, with the internet of things spanning everything from watches to cars, pushing the global data center construction market, specifically, to achieve an 8% increase in CAGR by 2022. To see the data center construction market converge due to overlapping organizational functions requiring higher or diverse capabilities is something that is not unlikely, especially as demands for all digitization functions even within a single organization continue to grow.

The APAC scenario

NTT, China Telecom and China Unicom are some of the vendors making the most of the heated data center operations scenario. Providing data center colocation at a scalable level in the Asia-Pacific region, these vendors are pushing growth in the next four years to the double digits. They do face some competition from the other big players listed in this market study.

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Since the market as a whole is seeing a lot of investment, colocation services offering better connectivity to smaller organizations are moving from the traditional server rooms to colocating spaces. Baidu, China Telecom and Equinix are players in the hyper scale data market, helping migrate data to the cloud storage (STaaS). Is this being used by Japan? A lot of data does point to it being a benefactor, but while Japan does make for an impressive client, data center construction will possibly be less established in the region as compared to China, the APAC giant.

The debates surrounding digitization and the best ways to transition continue to fuel investment rounds for data center operations as a whole. The best of data center construction as well as cloud data center markets are predicted to help halt the faltering steps and help connectivity for clients, however, and while the digital transformation currently seems like a rapid evolution on progress, if it is to stabilize, a lot will depend upon the choices of data center, their construction and capacity, of global businesses. At the moment however, much economical growth fuels exciting chaos.

Read our latest market report surrounding the data center debates here.