Modern business uses and produces more data every year. According to International Data Corporation, our datasphere will double between 2022 and 2026. So it is worth asking which currents carry that growth, how we will cope with it, and what it means for our companies.
Closer to the consumer
First, it is important to understand that data has developed gravity, a pull of its own. Apps and digital services in the hands of users draw companies closer to consumers. That means the erosion of centralised data management, where a company could serve a large region and millions of customers from a single central data center. Data volumes keep growing and moving them over long distances becomes ever more time-consuming. Customers' patience, however, does not grow; if anything the opposite, everything has to work faster and more smoothly. So it makes sense to move servers and computing power closer to end users.
The wider spread of 5G adds fuel to the fire, allowing large volumes of data to be moved within a limited radius in almost no time. Consequently, a broader decentralisation of data management can be predicted. This is of course a longer trend whose culmination does not lie in 2023, but internet-based businesses have to reckon with it today.
Distributing the infrastructure
Decentralisation in turn steers companies towards multicloud. That means an organisation builds its IT infrastructure around both internal and external needs. Work and the supporting infrastructure are placed where they bring the most benefit. That may mean combining an on-premises server room, data centers and a public cloud or clouds (Google Cloud, Azure, AWS and so on). Figuratively, the change can be compared to a grocer that used to sit with its warehouse and office in the heart of a big city. Now the business consists of physical shops spread across the country, logistics centers and an online store, because buyers' preferences and needs have changed.
The infrastructure itself keeps getting smarter. More and more systems are automated, and machines learn on their own how to run other machines more efficiently. A good example is the Greenergy Data Centers facility in Estonia, whose Siemens cooling system is controlled and optimised by artificial intelligence.
Allowing for unpredictable growth
Decentralisation brings us, thirdly, to modularity. When an organisation's IT infrastructure is spread across different solutions and locations, it is not sensible to build extensive spare capacity everywhere in advance. It is worth keeping the option to scale volumes up quickly, though.
Returning to the grocer, building a huge logistics center in a fast-developing area is not necessarily sensible, but placing the warehouse in a larger complex where the rented space can be increased as needed sounds much better. In data terms this means, for example, preferring modular data centers that allow new space to be occupied quickly using standard solutions. The public cloud model has this option built in as well.
Higher energy demand
Fourth, innovation and technological progress have to be taken into account. The equipment at our disposal keeps getting more capable, and with it the hunger for electricity grows. Keeping IT equipment in a data center or your own server room therefore sooner or later hits a limit beyond which it is technically impossible to go. In Estonia that limit is generally around 3 kW per equipment cabinet (holding servers, hard drives, network equipment and so on). Newer data centers, however, are capable of considerably more, and there is a practical need for it. A good example is the new generation of liquid-cooled cabinets, which remove heat significantly better than air-cooled solutions. Such a cabinet can be filled with equipment drawing up to 100 kW. That much electricity would supply 7 to 8 ordinary households at their peak consumption.
Newer equipment is as a rule also more efficient, which plays a role in meeting the environmental requirements placed on companies. Adopting more modern technology is therefore inevitable in the longer term. It is smart to allow for that when building your digital infrastructure, so the shoe does not start to pinch later.
Towards climate neutrality
Fifth, we arrive at tightening legislation. The European Union has set its members the goal of cutting EU emissions by at least 55% by 2030 and reaching climate neutrality by 2050. To achieve that, new legislation is being adopted that companies must follow.
Large companies, for example, must publish a sustainability report as part of the management report in their 2023 annual accounts, covering among other things the environmental impact of their governance and operations. In the context of building and running IT infrastructure this clearly points towards verified efficiency, because companies gain an additional incentive to reduce their ecological footprint in order to report a smaller negative impact. That in turn increases demand for server rooms certified for energy efficiency.
In this context the rising value of certificates more broadly can also be considered a trend, because in an ever more complex legal environment they offer certainty. Whether the topic is ecological footprint, physical security or cybersecurity, an internationally recognised certificate opens doors and builds trust. That was also one of the main reasons the Baltics' largest data center undertook a long and demanding certification process to prove compliance with Europe's highest standards. We covered it recently in a blog article.
In summary, the new year can be expected to bring growing data gravity, decentralisation of IT infrastructure and a preference for flexibility. Technological development and new, more powerful equipment will draw more attention than before to electrical capacity, and tightening legislation will prompt thinking about certification and international standards. The need to reduce the ecological footprint and meet the related reporting will put IT infrastructure on the management's table more often than before.