It all revolves around lowering latencies and bandwidth usage while keeping data center customers happy but “edgey”
2019 was a year for digital transformation across a number of areas and industries, and the data center market was no exception. Under increasing pressure to stay relevant and keep up with rapidly advancing technologies, data center providers saw a need to transform and prepare for what is to come.
In 2020, the outcomes of the adoption of both newer and more mature technologies will start to take shape in the data center. Specifically, we will see 5G drive an increase in demand for edge computing, while Artificial Intelligence (AI) will heighten deployment of new services in this market for both the end user and internal employees.
With that premise, here are our top three predictions for the regional data center market in 2020.
The rise of 5G Edge Computing
In 2020, the first applications using 5G’s super high speed, low latency, machine-to-machine communications will be introduced. These new offerings—like high-resolution cloud gaming, industrial IoT process control and onsite augmented reality guidance for workers—will demonstrate the value that 5G can unlock.
While we do not expect such applications to be widely deployed this year, their potential will start reshaping industries, including the data center market. For example, with 5G’s sub 10ms latencies it will soon become much easier to deploy low-latency 5G applications—and 2020 will see the data center preparing itself for their arrival.
However, for such applications to be successful, you will need more than just 5G. You also need to process these applications’ data close to their sources using edge computing technologies like edge data centers. With edge computing, you can avoid sending data back and forth from an edge device to a remote data center. This significantly reduces latency and enables these new, low-latency 5G applications to fully realize their promise.
As a result, we will see more data centers move to edge computing in 2020 in order to bring these applications to fruition.
AI will drive adoption of new data center tech
The deployment of machine learning, deep learning and other artificial intelligence technologies is now mainstream, and they power many of the cloud services we use every day.
We expect to see the use of AI accelerate this year, as companies increasingly use the data they collect to build and deploy AI models powering new services and generating new business insights. Data center operators need to respond to this trend, not just with faster networks and servers in their core, but also at the edge to enable the deployment of AI models closer to end-users.
While this represents a challenge to data center operators, it is also an opportunity: if they are smart about adopting the right networking, computing and edge data center technologies to support AI, customers will come knocking on their doors. That is why in 2020, we expect data center owners and operators to increasingly focus on how they can deliver the performance their customers need for AI-enabled cloud services.
AI for workforce efficiency
With the rise of co-location, the demand in the Asia Pacific region remains high. A Cushman & Wakefield research paper has tabbed the region as the second-fastest growing region for co-location over the next five years, with a CAGR of 12.2%, second only to the Southeast Asia region, where the growth would be spurred by the rapid pace of digitization and the surge in demand for cloud-based services.
Despite all this demand, a tight labor market and the increasing need to build edge computing centers away from Tier-1 locations will challenge data center operators when it comes to recruiting and retaining the technical talents they want in the new year.
Given this, we can expect data center operators to increase their use of new artificial intelligence and other smart technologies to maximize the productivity of their employees. For example, AR headsets can utilize AI to guide service technicians as they complete tasks. At the same time, data center equipment providers will use predictive maintenance powered by AI to make their equipment work efficiently and to reduce costs, allowing data center operators to do more with less human resources.
Data center operators that wait to adopt these new AI capabilities may experience slower growth as they fail to find or keep the people they need to deliver all the services their customers demand in today’s highly competitive market.
The next phase of the data center
2020 will see the first applications of advanced technologies like 5G start to find their way in the data center, while the deployment of machine learning and other AI technologies will create new ways of learning and doing things.
In the new year, this means greater opportunity for data center providers to grow and enhance their businesses. While the benefits of these technologies may take at least a few years to come to fruition, data centers that incorporate them now will be the ones best positioned to reap the benefits down the road.
