The data centre market is experiencing unprecedented change - we explore the challenges and developments on the road ahead. 

The Big Picture

The data centre market is experiencing unprecedented change. The recent boom in Artificial Intelligence (AI) applications and the mass adoption of cloud computing is driving a massive growth in demand for data centres globally. This is having a significant effect on digital infrastructure and driving a relentless appetite for computing power and storage.

According to a study by Telecom Advisory Services, cloud adoption contributed more than $1 trillion to the global GDP in 2023. The same study projects that between 2024 and 2030, global GDP based on cloud adoption will surpass $12 trillion.

The surge in AI applications, particularly generative AI, is accelerating data centre growth at a spectacular rate. Goldman Sachs Research estimates that data centre power demand will grow by 160% by 2030, due to AI workloads by 2028. AI is expected to represent about 19% of all data centre power demand. Demand at this level has never been experienced before.

Power Density

AI workloads require significantly more computing power and consume more energy than traditional data centre operations. This is leading to a dramatic increase in average power densities which have more than doubled in just two years, from 8 kW per rack to 17 kW, with projections reaching up to 30 kW by 2027

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Sustainability hits the agenda

The environmental impact of data centres is gaining attention everywhere. Some governments are heavily restricting data centre expansion and there has been press coverage about data centres preventing housing development by sucking up grid capacity. 

Energy consumption is at the top of the list of sustainability concerns. Data centres worldwide currently consume 1-2% of overall power and this figure is expected to rise to 3-4% by the end of the decade. In the United States alone, data centre power consumption is projected to increase from 3% in 2022 to 8% by 2030. This significant surge in demand is putting pressure on power grids and raising questions about the sector's carbon footprint.

Sustainability concerns across Europe have resulted in the Energy Efficiency Directive (EED) which is a European Union law that requires organisations to reduce energy consumption and improve energy efficiency. The directive has introduced new obligations for data centre monitoring and reporting for facilities with power consumption of greater than 500kW. While the EED is an EU-wide directive, member states may implement additional requirements. In Germany there is mandatory reuse of 10-20% of waste and a stipulation of 100% by January 2027.

Energy sources for data centres will face increasing scrutiny in the future due to growing environmental concerns. Most operators have switched to purchasing sustainable power, while this has given them the green credentials they need, it’s really only taken that power away from other uses. The key to solving this problem is the generation of net new sustainable electricity. One example of this is the use of Small Modular Reactors (SMRs) as a power source. SMRs offer benefits such as scalability, reduced carbon footprint and consistent power supply. While they also bring different environmental concerns, it is highly likely that they will be deployed for data centres as power demands increase.

 

Need to build bigger, cheaper and faster 

 

The AI boom is attracting massive investment across the globe and demanding more and more data centre capacity. This capacity is putting significant pressure on supply chains for the data centre IT infrastructure. Economy of scale is also featuring strongly in data centre construction as developers seek to build the supporting infrastructure at a lower cost per megawatt. Data centre developments of over 500MWs are now not uncommon and are appearing in numerous global locations.

 

The impact on data centre infrastructure

 

High-density computing and liquid cooling technologies are revolutionising data centre construction. These advancements are reshaping the physical layout of the buildings as well as the data halls themselves, for many operators these changes make retrofitting existing facilities impossible. 

 

Increased power density brings big changes

Traditional air-cooling systems can no longer manage the heat generated by high-power density AI hardware. Liquid cooling is rapidly being introduced, but this requires significant modifications to data centre infrastructure. This includes the installation of specialised piping systems, heat exchangers and liquid distribution units. In comparison with conventional air cooling, liquid cooling provides many benefits for data centre operators including higher energy efficiency, smaller footprint, enhanced server reliability and lower noise. However, it also has drawbacks, initial investment is higher, plus, it requires new data centre operations and maintenance skills. Also, it’s not yet clear whether direct-to-chip or immersion cooling will become the industry standard. 

 

More power for everything

Every element of data centre infrastructure is being impacted by the AI-boom. Data centre developers are increasingly seeking large scale infrastructure options for uninterruptable power systems, switching, cooling, backup generators and monitoring solutions.

Modular to the rescue

Modular infrastructure has been around for many years now but is gaining traction in next-generation data centres, as it has several significant advantages.

 
Scalability

Traditional data centres require significant upfront investment and long-term planning to accommodate future growth. In contrast, modular deployments allow for incremental expansion as needed. This "pay-as-you-grow" model enables operators to align their infrastructure investments more closely with actual demand, reducing initial capital expenditure and improving return on investment.

 
Speed

Prefabricated modules can be manufactured off-site and quickly assembled on location, dramatically reducing construction time compared to traditional build methods. This rapid deployment capability is particularly valuable in the current AI boom where time-to-market is critical.

 
Standardisation

Using standardised modular components operators can ensure consistency across their data centre portfolio, simplifying management and maintenance. This standardisation also ensures better regulatory compliance as well as enabling more predictable performance and reliability.

About Socomec

We are powering the future of data centres today through our unrivalled expertise in critical power management. We are constantly innovating to meet the future demands of data centres, including, higher power densities, increased energy efficiency, greater sustainability and the flexibility to adapt to rapidly changing technologies. We combine innovative hardware solutions with advanced software and analytics to deliver the latest available Data Centre power, monitoring and services technology.