Forecasting the Future: Top 7 Anticipated Trends Reshaping the Data Center Landscape in 2024

05 December 2023

The data center industry is vast, and it’s getting bigger. With thousands of data centers spread across the globe, of which the vast majority are in the US, the industry is projected to bring in $340.2 billion in 2024.

However, this growth will not come without changes to sustain this spike in demand. In fact, over the next five years, experts anticipate several trends reshaping the data center landscape.

Below, we look at some highly anticipated trends that will transform the data center market in 2024.

7 Trends Revolutionizing the Data Center Industry

The common trends we see emerging in the data center space are based in technology, sustainability, automation, and energy demand. Let’s look at them in detail.

1. AI Integration

Artificial Intelligence (AI) is here to stay. Across several industries, businesses are turning to AI in droves. Research from the US Census also showed that the most extensive use of AI is in the information sector, with 13.8% of businesses using this technology. By Q1 of 2024, AI adoption in the information sector is expected to increase to 21.8%.

In the data center industry, AI can help improve sustainability and operational efficiency. For instance, data centers can monitor energy usage and optimize power distribution using AI-powered sensors and Machine Learning.

AI-powered tools can also improve security by monitoring network traffic and identifying potential security threats. For example, AI can alert the data center NOC (network operations center) in event of network congestion or a potential breach.

2. Partnerships for Predictable Supply Chains

The COVID-19 pandemic, followed by an unstable geopolitical environment and a looming recession, has disrupted supply chains, lengthening delivery times for data centers. Moving forward, data center owners will look to forge meaningful relationships and partnerships to tackle this problem.

Many capital sponsors and infrastructure funds are keeping an eye out for opportunities in the market.

Traditional methods of infrastructure deployment are no longer sustainable, resulting in delayed timelines and unreached milestones. In the future, partnerships and collaborations will be essential to keep pace with future demands

3. Hyperscale Dominance

Hyperscale data center dominance has already begun and is here to stay. Companies are expected to increase their spending on hyperscale data centers by 20%. A look at the hyperscale data center capacity scale shows that over half of it (53%) is in the US, followed by 26% in Asia Pacific.

Hyperscale data centers are the need of the hour, with companies rapidly increasing their digital footprint. They are characterized by massive scalability, high density, efficient operations, and a shift from traditional norms.

These data centers are designed to handle enormous workloads. It ultimately makes them critical assets for companies like Google, Apple, and Amazon, who are looking to meet the demands of the digital age.

4. Increased Energy Demand

It takes an exorbitant amount of power and infrastructure to keep the internet available everywhere.

Experts say that data centers need to be built with affordable, renewable energy to sustain the future of the cloud. Facilities and companies relying solely on energy grids won’t be sustainable enough for the growing demand for energy – companies need to find new methods of generating power.

According to McKinsey, the demand surge will reach 35 gigawatts (GW) by 2030, a considerable increase from 17 GW in 2022. Here are some approaches companies are taking in this escalated need for energy:

• Microsoft (Dublin) plans to use natural gas as an energy source for its multi-facility campuses.
• Google is working with Fervo Energy to use fiber-optic sensors that tap geothermal energy in Nevada.
• Enchanted Rock, a fuel cell provider, will use renewable natural gas made using food waste to power a Microsoft data center microgrid in San Jose.

In 2024, we’ll see more projects of this sort as businesses attempt to find sustainable energy sources to power their operations. This calls for more innovation and better builds.

5. Focus on Sustainability

Speaking of sustainability, businesses are taking steps to ensure that their data centers are both functional and eco-friendly. These steps include adopting renewable energy sources, using less water, reducing carbon emissions, and using advanced cooling methods.

In the coming months, we’ll likely see more companies in the data center sector taking similar steps in the future.

For construction companies, a push for sustainable building will likely include integrating eco-friendly fuel sources and spending less time on site. Companies integrating solutions to streamline their process are already steps ahead of the curve.

6. Automation Imperative

Labor shortages and credit crunches have created a situation where organizations need a supplementary option to handle complex data center tasks at scale. For many industries, automation has been the best solution to address these concerns, reducing costs and boosting efficiency as a result.

The global data center automation market is expected to be worth $28.58 billion by 2023. Its compound annual growth rate of 13.79% can be attributed to the increasing demand for data center automation to improve productivity and reduce operational costs.

Modular Designs

With the spike in data center demand, construction companies also face pressure to deliver more projects within tighter timelines. To keep up with this, modular designs will gain more momentum in 2024, especially with regard to pre-packaged power rooms.

These prefabricated rooms can be quickly deployed and are more flexible than traditional data center designs.

Modular design allows for scalability so organizations can add additional infrastructure as needed without rebuilding their entire data center. For construction teams, this means quicker, more efficient construction.

Embrace Innovation in Your Data Center Construction Process and Eliminate Rework

Technology and innovation shouldn’t be limited to data center operations; you can leverage them during the construction process. XYZ Reality’s Atom™ headset is an innovative technology enabling teams to harness Engineering Grade AR™ and a state-of-the-art project controls solution.

Data centers need accuracy and efficiency. The headset enables you to view your data center design model with 3 to 5-millimeter accuracy on-site, so you can detect clashes before you start building. Our project controls solution gives you access to real-time progress data so you can keep teams on track and deliver on time.

Reduce rework, save costs and streamline your construction process with XYZ Reality. Book a demo to learn more.