In a quarter of a century, data centres have become from a niche industry to one of the most important things in people's daily lives. Although many do not even realize it, the pictures they take, the content of their favourite entertainment services and even online shops are stored in modern data centres that occupy areas the size of sports arenas. It will not be over the top to say that everything that happens on the internet is connected to data centres. Consequently, global challenges and new opportunities directly affect this industry as well.
Let's see how disruptions in the production of digital infrastructure, cyber security issues, the entry of artificial intelligence (AI) into business and other current events affect the development of data centres.
Data storage facilities become more expensive
Undoubtedly, the industry is adversely affected by the supply problems of modern technologies that started during the pandemic years. Their production volumes have still not returned to previous levels; therefore, many manufacturing industries are competing over semiconductors, chips, cables and other components. The lack of spare parts and new equipment is also affecting data centres.
In addition, while equipment and car manufacturers are already used to the situation, data centre builders are truly facing the problem only now, as building a data centre takes several years. It means that the equipping of the new centres, the foundations of which were laid before the pandemic, started very recently. And the prices now are much higher than they were before the pandemic. As a result, data centre expansion projects are more expensive, therefore the size of data storage facilities can no longer be increased as quickly as before.
Avoid wasting gigabytes
This is not good news for businesses and end consumers, as competition for space in data centres will intensify and every terabyte will have to be used more rationally. It will be especially interesting to watch what the world's biggest consumers of server power such as Meta, Amazon Web Services, Microsoft and Google will do. These companies traditionally reserve space in data centre servers 3-5 years in advance. If they continue this practice to the usual extent, it will create issues for smaller players. Already now, most data centre and cloud service providers have increased their prices, and it is expected that they will increase them even more in the second half of the year. Otherwise, service providers will not be able to cover the costs of using additional storage facilities in data centres.
This will also place some responsibility on the end users. Until now, many users have freely uploaded their images, videos and other content to cloud storage or video platforms such as YouTube, TikTok, etc. without thinking about the number of used gigabytes but they will have to change this habit in the near future. Perhaps service owners will be forced to set stricter limits or a higher price per gigabyte, and older content that has not been used for a long time may be deleted.
Latvian companies are in a much better situation, because we are currently building the third DEAC data centre in Riga for tens of millions of euros, and it will be put into operation as early as 2025. The new data centre DC3 will have up to 1,000 racks with a total capacity of 10 MW and will be certified according to the requirements of the Tier III standard. This certificate sets very high safety standards regarding the design, construction and maintenance of data centres. Although we have planned to complete the construction works at the end of 2024, potential customers can already reserve a place in the new data centre.
Self-production of electrical power
The new trend of generating electricity very close to the data centre could become a useful method for reducing costs in a long term. Data centres consume a lot of electrical power, because the building not only contains thousands of servers that run continuously, but also cooling equipment for maintaining a favourable working climate for the machines. Recent fluctuations in electricity prices have encouraged data centres to build their own power plants. For example, Microsoft is planning to build a massive 170-megawatt gas-fired power plant in Ireland to support existing diesel generators.
Our DC3 will also use electrical power produced only from renewable resources. Even the back-up electricity generators use a "green" solution – MY Neste Diesel fuel, produced from 100% renewable resources. At the same time, the chemical formula of the substance is identical to fossil diesel fuel.
AI will help
Another solution to keeping control over the costs and saving space could be the promising artificial intelligence that is gradually entering the data centre industry. The so-called generative AI or equipment capable of creating original content will make it possible to personalize services and rationally use available space. AI algorithms will customize the language, recommend the most appropriate features for the customer, perform detailed programming, create design and content and provide customer service. At the same time, AI will make sure that the processes take place as efficiently as possible and do not unnecessarily waste space on the servers. All of this will contribute to reduction of the costs that are currently being passed on to relevant service providers. It must be noted here that AI is only this year showing its ability to be a useful help in business, therefore useful AI powered solutions for automation could become common only in 2-5 years.
However, there is an area where radical changes are not expected, and it is cyber security. The activation of cybercriminals experienced in the last year and a half makes it necessary for data centre employees to be maximally vigilant and adhere to the highest cyber security standards. And it means that if the data centre has received the appropriate certification, then customers can be certain that their data will be taken care of. They will be protected from attacks, as well as backups will be available even if one of the servers stops working.