Data centers have become a crucial part of the digital infrastructure as more industries embrace digital transformation. According to research, the global data center market is expected to grow at a CAGR of over 2% from 2022 to 2030, reaching approximately $519 billion. This growth will be driven by the rising demand for cloud computing, big data analytics, Internet of Things (IoT) devices, and artificial intelligence. At the end of 2023, the continuing tendency of global data center growth doesn’t strike us as a surprise anymore. The trend is here to stay as the volume of data created worldwide continues to grow at rates never seen before. While there are quite a few data center hotspots, the phenomenon isn’t merely regional but of global significance. The step-by-step digital transformation worldwide is a major contributing factor driving the demand for more data centers. The wider-range internet accessibility, the IoT, Artificial Intelligence, and the more and more expansive adoption of cloud services and edge computing are undeniably changing the global landscape, prompting data center growth.
Technology is already interwoven with the fabric of everyday life, and as a result, most industries are becoming increasingly data-intensive. Robust and reliable data center infrastructures are needed more than ever for storing, processing, and working with the vast amounts of data produced. Depending on the speed of digital adoption and future growth prospects of specific industries, we can predict which ones will considerably benefit from the global data center growth we anticipate.
Some key industries could benefit tremendously from the continued expansion of data centers globally. This article reviews industries that could gain the most from global data center growth. Let’s take a closer look!
The boom of post-covid digital transformation
The pandemic presented the world with significant transformations that are here to stay. Those changes have been shaping many areas of our lives ever since, introducing the world to new, more efficient ways of doing things.
Global digital transformation got a sudden kick out of the pandemic. Working from home, schooling from home, and telemedicine are the three most prominent areas experienced directly by most of us. Since then, the world has been adapting new technologies at an unprecedented pace. The volumes of data are growing exponentially, and thus, the role of global data center growth is unquestionable. Let’s take a look at the industries that can benefit the most from the growth phenomenon.
Industries Set To Benefit The Most From Global Data Center Growth
The industries of healthcare and life sciences
Healthcare and life sciences are two industries that have generated significant amounts of data over the past few years. Medical imaging, clinical trials, patient records, research materials, and statistics – the sum of those can add up to incredibly large volumes. The pandemic has only increased the amount by propelling the rise of smart gadgets for medical use, telemedicine, and the like. The pandemic has accelerated the digitalization of health records as well, while technological and scientific advancements have also added to the data density of the industry. Managing all that data is a complex task, making data centers essential for the healthcare industry.
It’s easy to see that data center growth is much needed for storing, processing, and analyzing medical data. The industry can considerably benefit from performant, compliant data centers because those are essential for providing fast connections and low latency.
Financial Services
Global data center growth can also make the financial sector’s work easier. Financial transactions make up a significant amount of global data production. Data center growth can benefit the industry by catering to the increasing demand for secure, high-performance storage and processing options.
Efficiently analyzing huge amounts of financial data can help the industry in risk assessment and decision-making. The financial sector is fast-paced, and facilitating all digital payments requires excellent network connectivity and speed. Undoubtedly, secure, compliant, and performant data center growth can come with major benefits for this industry on a large scale.
The financial services industry relies heavily on data centers for storing sensitive financial data, running core banking applications, algorithmic trading, risk analytics and ensuring compliance. As financial institutions aim to improve customer experience through digital banking while optimizing costs, the demand for co-location services, cloud hosting, and managed data center services among banks and insurance companies will rise. Expanded data center infrastructure is vital for financial institutions to support digital transformation initiatives like open banking APIs, blockchain, and AI integration.
The e-commerce and retail industries
The popularity of e-commerce and online retail is one of the drivers behind global data center growth. This results from the internet reaching more and more previously secluded areas and moderate growth of the middle class. Data center growth makes online platforms more reliable and flexible while also providing lower latency during peak times.
Additionally, better availability of data centers on the edge contributes to fast data analysis and a better understanding of customer behavior in different regions – key assets of targeted marketing and inventory management.
Global data center growth supports these industries by beefing up cybersecurity as well. Industry regulations are changing to protect customer information and financial transactions against cyber threats.
The industrial and manufacturing sector
With the recent rise of 5G and the acceleration of data-intensive, remote operations, there has never been a bigger need for data center growth in the world. The automatization of different production processes, the Internet of Things, and machine-to-machine communication need performant data centers with a lot of compute power to work optimally. Real-time monitoring, data analysis, and optimization require high-performance data centers to handle the load. Digitalization has brought positive changes and value to manufacturing, and further data center growth will aid in making things run smoothly in the future.
The cloud and the IT industry
Cloud adoption continues to be a huge phenomenon globally. Data center growth featuring new technologies is expected to mitigate the strain of handling all the data in the cloud. Since data centers are responsible for the quality of network connections, cloud service providers can substantially benefit from the global growth we’re seeing. Since 2018, cloud investments have shown annual compound growth of over 20 %. The IT industry can reap significant benefits from enhancing infrastructures and capacity. A vast data center network can offer more power, storage, and network resources crucial for IT operations.
Artificial intelligence – skyrocketing data center growth across all industries
Lastly, the rise of artificial intelligence applications may be the most significant factor in increasing global data center growth. The recently developed large language models, for example, have reached many people, opening the door to new possibilities and millions of applications. However, the training of these models required lots of resources. For analyzing incredibly large quantities of data and reacting in real-time, generative AI needs excellent data center resources like connectivity and computing power. The vivid interest in AI will keep data center infrastructure demands high.
This is just the beginning
AI has merely made its appearance, but the interest is already exceeding predictions. It will be one of the major spurs for global data center growth in the upcoming period. The spread of generative AI applications marks a new paradigm, and this will be visible in the market as well. The industry is anticipated to reach $1.3 trillion in the next ten years. AI will likely become increasingly integrated into various industries, leading to data being created at an unprecedented pace. Data center growth is already happening, and the importance of robust infrastructures for handling all that data will likely create further growth.
AI across industries
AI is expected to expand to many industries and applications. It will benefit the financial sector by bettering risk assessment and optimizing customer service. It comes with significant benefits for e-commerce and retail by enhancing consumer behavior analytics and creating personalized shopping experiences. The manufacturing industry will see great growth thanks to automation and supply chain optimization. In healthcare, AI is a very promising tool for disease prediction, scientific research, and medicine development, as well as patient care and the analysis of medical data. The IT industry and cloud services will greatly benefit from AI’s enhanced security, storage, and overall data management capabilities. AI’s hunger for data will inevitably lead to significant global data center growth. The increasing interest in AI is estimated to bring $280 billion in software revenue.
Conclusion
As the digital economy expands globally, data centers have become indispensable infrastructure supporting innovation and technological advancement across industries. Financial services, healthcare, retail, telecom, and government sectors stand to gain the most from continued investments in data centers. With data center growth showing no signs of slowing down, companies that supply these facilities, like real estate firms, cooling solution providers, and cloud infrastructure companies, are poised to benefit greatly. However, the environmental impact of data centers will also warrant greater scrutiny going forward. Overall, data centers will remain mission-critical to supporting the needs of data-intensive industries worldwide.
