The pandemic has expanded our use of many technologies. Web meetings, video calls, collaboration tools, streaming, online shopping, and many others have kept us safe and productive. What followed was an enormous demand for Internet Service Providers and data centers that support streaming services, cloud computing, content delivery, and video conferencing.
While these demands drove urgent projects to increase capacity, private cloud and enterprise-related projects faced new headwinds. Many IT departments shifted to essential services, postponing system migrations, upgrades, and new deployments. The impact on the data center contractor depended on what their clients’ data centers supported.
We still see the impacts of this disruption, but what is becoming clear is that the service demands created by the pandemic will become long term. There are also new drivers for that demand to increase. Businesses will restart projects. They cannot be delayed indefinitely. Ultimately, the data center market will be driven to new highs.
The future of the data center remains bright. As businesses accept the long-term implications of the pandemic and sustainability of at-home workers is proven, investments that support this way of life will occur.
Drivers Accelerating Data Center Demand
Entertainment — A winter of limited entertainment options will drive content and gaming consumption. Families putting off a 4K investment, streaming service, or a new gaming system will be driven to do something to shake off the pending gloom of a pandemic winter. The latest home entertainment includes more 4K options and gaming subscriptions. This trend is accelerating with the PS5 Plus Collection, Nintendo Switch Store, and Xbox Game Pass.
5G — Apple is releasing its first 5G devices. In larger markets, faster consumption at the edge will drive greater demand at the core. Furthermore, we are relying on smartphones more while working remotely, and using them for backup connectivity during home network outages.
Social — Video chats, Zoom meetings, and sharing videos with family members is replacing family gatherings. Sadly enough, these services may even replace holiday visits for many Americans this year. While virtual gatherings are a poor substitute, post-pandemic, society will have grown comfortable with meeting family and friends this way, familiar with the technology, and ultimately more likely to use it long term.
Wi-Fi 6 — Lower latency and higher speeds will drive more consumption at the edge, increasing UHD viewing, and supporting more connected devices in businesses and homes.
Work from Home — Commercial buildings may be putting less strain on Internet Service Providers, but residential demand is up. We are working from home, learning at home, and streaming entertainment content all day long. You may not have been allowed to stream podcasts, music, or even your binge program at the office, but you are at home.
Enterprise Demand — Many workers have been sent home to work remotely. Some have chosen to do so forever. The pandemic has thrown the work-from-home trend into high gear and may become the future norm. While some technologies are hard to imagine today, VR collaboration solutions, dedicated HD conference systems, and virtual town hall meetings could be central components of tomorrow’s productivity improvements.
Building Automation — Remote monitoring and management has increased as a driver for building automation solutions. Reducing on-site facility staff is possible when building systems can be viewed and adjusted from home.
Smart Homes — We are receiving more at-home deliveries for our households and businesses. The value of those deliveries is increasing along with the demand to keep those deliveries safe. Remote entry systems such as MyQ, Amazon Key, and the related cameras are adding to home networks. Those systems also lead to more integrations with Google Nest, Alexa, Ring, and other home automation solutions for lighting, HVAC, and security.
It’s becoming clear that the pandemic has accelerated demand for many technologies. These technologies are likely to remain in higher demand post-pandemic. Once met by a return of full business operation, the data center’s consumer and enterprise sides will result in a boom in demand. The pandemic has disrupted data center business, but in many ways has created longer-term demand for growth.