Data centers have become a crucial part of the digital infrastructure as more industries embrace digital transformation. Research projects global data center growth at a CAGR of over 2% from 2022 to 2030. That would take the market to roughly $519 billion. Rising demand for cloud computing, big data analytics, Internet of Things (IoT) devices, and artificial intelligence will drive this growth.
By the end of 2023, continued global data center growth no longer comes as a surprise. The trend is here to stay, because the volume of data created worldwide keeps growing 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. Wider internet access, the IoT, and artificial intelligence are changing the global landscape. The expansive adoption of cloud services and edge computing does the same, so data center growth keeps climbing.
Technology is already woven into everyday life, so most industries are becoming more data-intensive. Industries need robust, reliable data center infrastructure more than ever, because they now store and process vast amounts of data. Some industries will adopt digital tools faster than others and have better growth prospects. We can predict that those industries will benefit the most 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 shaped many areas of our lives ever since. They introduced 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 add up to incredibly large volumes. The pandemic increased that amount further by driving the rise of smart medical gadgets and telemedicine. The pandemic has accelerated the digitalization of health records as well. Meanwhile, 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 benefit considerably from performant, compliant data centers, because they provide 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 meeting rising demand for secure, high-performance storage and processing.
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. They store sensitive financial data and run core banking applications, algorithmic trading, and risk analytics. They also help firms stay compliant. Financial institutions want to improve customer experience through digital banking while optimizing costs. As a result, banks and insurance companies will demand more co-location, cloud hosting, and managed data center services. Financial institutions need expanded data center infrastructure to support digital transformation, such as 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.
Better availability of edge data centers speeds up data analysis and improves understanding of customer behavior in different regions. Both are key assets for 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
5G is on the rise, and remote operations are getting more data-intensive. As a result, the need for data center growth has never been bigger. Automated production, the Internet of Things, and machine-to-machine communication need performant data centers with plenty of compute power. 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. Further data center growth will help keep things running smoothly.
The cloud and the IT industry
Cloud adoption continues to be a huge phenomenon globally. Data center growth featuring new technologies should ease the strain of handling all the data in the cloud. Data centers are responsible for the quality of network connections. Cloud service providers can therefore benefit substantially from this global growth. 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 behind global data center growth. Recently developed large language models, for example, have reached many people. They have opened the door to new possibilities and millions of applications. However, the training of these models required lots of resources. Generative AI needs excellent data center resources, like connectivity and computing power. It has to analyze incredibly large quantities of data and react in real time. 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 could reach $1.3 trillion in the next ten years. AI will likely spread across various industries, and those industries will create data at an unprecedented pace. Data center growth is already happening. Robust infrastructure for handling all that data will likely create further growth.
AI across industries
AI will likely 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. It also helps with 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 could 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. Data center growth shows no signs of slowing down. Companies that supply these facilities, like real estate firms, cooling solution providers, and cloud infrastructure companies, stand 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.
