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AI set to deliver boom in data centre market

Frost & Sullivan expects AI-related activity to contribute to a 10% lift in data centre investment by 2025

|Feb 11|magazine5 min read

AI is set to deliver a boom in data centre investment, according to analysts at Frost & Sullivan.

Investment in data centres is forecast to grow by 9.9 per cent CAGR as big data and IoT drive demand for capacity in all markets, led by APAC, followed by North America and EMEA.

Researchers identified four key areas for growth:

Edge computing

Connected devices, connected living/homes, AI, gaming and video streaming, autonomous cars, and virtual and augmented reality will propel edge data centres.

Artificial intelligence

Surging AI usage in data centers will lead to demand for advanced electronics and specialists in AI-based solutions for data center applications and architecture.

New capabilities

As data processing takes place close to the source, the processing time reduces. This will augment technologies like autonomous vehicles, smart devices and sensors and augmented reality.

Geographic expansion and partnerships

Market participants need to focus on high-growth, emerging markets, like India and Southeast Asia, where data creation is still in the nascent stage and data centre construction is in its infancy. Similarly, partnerships with colocation and cloud service providers will give equipment manufacturers access to new data centre construction markets, providing them the much-needed boost.

‘Need to innovate’

Manoj Shankar, research analyst, energy and environment practice, Frost & Sullivan, said, "The move from enterprise to cloud and colocation data centres will gain momentum because companies can reduce capital and operational costs by avoiding investments in hardware or software infrastructure and reducing maintenance and space requirements. 

"Additionally, 5G will move processing closer to the point of data collection, leading to increased deployment of micro and edge data centres and driving investments in new and next-generation data centre technologies.

"Onsite cloud data centres will become crucial as companies will require critical data to be kept in-house or at a nearby location, thereby lessening the security risks such as data theft. Further, given the high demand for modular data centres and competitive pressures, modular data centre manufacturers need to innovate in this space and come up with advanced concepts that allow additional flexibility and modularity."

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