Navigating the Challenges of the Enterprise Data Center Market in 2023

What’s Happening with the Global Data Center Market? 
 

Before you start the journey of finding a data center facility, it’s essential to understand what’s currently happening in the market. 

Power availability is one of the primary driving forces behind the challenges of meeting demand for data center facilities.  

According to Cushman Wakefield’s Global Data Center Market Comparison Report, while the rising costs for things like construction haven’t slowed growth in North America, ongoing power sourcing issues mean providers are dealing with backlogs.  

Other global markets — Europe, Latin America, and Asia Pacific — are experiencing the same challenges with power availability. Each region has seen year-over-year growth but continues to struggle to keep up with demand. Power costs in these markets have continued to rise by a median of 16%. 

Vacancy rates continue to decline in all four global regions, with the most significant challenge in Singapore, which has a record-low vacancy rate of less than 2% and less than 4MW of available capacity. 

Also, the increased adoption of Artificial Intelligence (AI) has dramatically affected the data center market. 

AI applications, particularly deep learning models, necessitate substantial computational resources and storage capacity for data analysis. AI workloads are continuing to grow in both data volume and complexity, which further increases the demand. 

These AI workloads need everything from high-density computing to specialized hardware. Many enterprise data centers must adapt their infrastructure to accommodate when you factor in the extensive power and cooling capabilities needed.  

With AI technology and demand showing no signs of slowing down, data centers face challenges keeping up with demand.  

Ultimately, purchasing data center solutions has become more challenging than ever, so you need a strategic plan to find the right provider to meet your needs.  

Finding the Right Enterprise Data Center

Ensuring the proper storage, data security, and handling of data is essential to your company’s success, so choosing the right provider isn’t something to take lightly. 

Considerations for selecting an enterprise data center fall into three main categories: Operational, Location, and Physical.  

Operational 

Every organization will have specific needs to meet the demands of their operations, so these should be carefully reviewed before deciding on an enterprise data center. 

Some questions you’ll want to answer include:

• How does the enterprise data center handle latency to critical workloads?  
• What does the data center offer for multi-cloud and hybrid access?  
• Can the potential data center meet security and compliance requirements? 
• Does the data center meet your goals for any green energy initiatives?

Location 

When considering the location of your data center, companies often focus on proximity to their end user. While that is an essential aspect of your selection, it isn’t the only thing you should consider concerning location.

Other vital considerations should include:

• Is the enterprise data center in an area impacted by natural disasters?  
• How often will people from your company need to travel to the enterprise data center?   
• Where are your SaaS and Security providers located? 
• Does the location you’re considering offer any tax rebates or advantages? 

Physical  

The physical components — what hardware and services the enterprise data center has available — will also affect your decision-making. 

Some things to look at include: 

• What are the utility rates and PUE efficiency for the enterprise data center location you’re vetting?
• Are peering exchanges available?