Digital infrastructure is central to today’s global economy as well as societal development. In this landscape, data centers are important enablers – read on to find out which are the top trends likely to impact the data center sector in 2023.

1. Expect market constraints

After many years of rapid expansion, the current climate for establishing new data centers is challenging. Consequently, data center capacity will be tougher to locate and may cost more, especially in the latter half of 2023. Due to geopolitical concerns, power supplies are constrained in key markets. On the demand side, business IT departments are likely to have budgetary restrictions.

As cloud solutions and AI continue to reshape the commercial environment, enterprise IT must balance budget limitations with the danger of falling behind in a time of digital transformation. Southwest’s catastrophic breakdown during the holiday weekend is the most recent example of what could happen if you fail to face and address this tension.

2. New semiconductor shops emerge

According to research by SEMI, 28 new semiconductor production facilities are scheduled to begin construction in 2023. Countries will also prioritize indigenous manufacturing to gain a competitive advantage and relieve supply chain challenges on a global scale. This is also a direct response to the pandemic-time pressures that we witnessed.

3. Hyperscale data centers will dominate

Hyperscalers are massive data centers intended to facilitate the installation of a significant number of servers rapidly and seamlessly. Typically larger and more advanced than conventional data centers, they serve the demands of tech giants and other businesses that create and analyze massive quantities of data.

Due to the sheer complexity and size of the workloads, cloud data centers need a higher degree of automation than traditional data centers. Frequently, hyper-scale data centers include modular architectures and modular components, allowing for rapid installation, expansion, and customization.

Amazon, Microsoft, Alphabet, Alibaba, and Facebook presently dominate the market for hyperscale data centers, which is expected to expand in 2023 despite a general economic slump.

4. New infrastructure to support the ChatGPT era

Artificial intelligence (AI) with machine learning (ML) demands the creation of brand-new data center infrastructure, greater than any other application. Artificial intelligence (AI) and machine learning (ML) might need three times the power density of conventional data processing, necessitating a shift in data center architecture. This is also predicated on sophisticated cooling systems to accommodate the higher output.

The intense nature of AI and ML computations might also lead to a substantial dispersion of computational, memory, and storage resources over a large number of computers in a computational cluster. The cluster also requires new network cabling and switches.

5. Prepare a sustainability roadmap beyond 2023

Data centers, which are some of the most energy-intensive structures in existence, are under heightened scrutiny as institutions and municipalities all across the globe set out carbon emissions objectives by the end of this decade. In Ireland, wherein data centers consume more than 10 percent of the nation’s electrical supply, a de facto ban prohibits the building of new data centers.

Currently, renewable energy sources such as solar are an exciting option for smaller urban data centers. In contrast, the energy requirements of hyperscale data centers, which could be as huge as sports arenas, would involve a solar farm. 2023 will be the practical start of these conversations.

6. Clouds will be hybrid by default

Telcos would need additional servers and low-latency connectivity options as people spend more time online. The scale and interconnectivity of hyperscale data centers will be necessary to accommodate burgeoning use.

In 2023, services will be distributed, deployed, and operated across numerous resources, like private or public cloud services, networks, and devices, all of which will continue to function in tandem to deliver a single service or package of services. This is due to the fact that private clouds provide greater control and security, whilst public clouds offer tremendous computational capacity.

7. Automate significantly

Much of the activity at a data center is monotonous and repetitive. It is problematic that the quantity of data a facility must manage continues to grow. Companies are increasingly resorting to data center automation to counteract this.

The automation of many common data center processes, including monitoring, repair, and app delivery, increases data center productivity and adaptability. In 2022, companies such as Nokia and Juniper Networks, which assist businesses in managing and automating data center processes, expanded their product lines – a trend that will continue into 2023.

8. Smaller-scale data centers: a necessary counterpart to hyperscalers

Due to big data, IoT, VR, and other emerging technologies, latency has become a key risk for data center management. Latency is the amount of time it takes for data to travel from its source to the consumer. Users today expect anytime, everywhere access to data and services.

This will result in the expansion of regional data centers, which are traditionally dispersed facilities that provide storage and computing services. These facilities are often close to the location where data is created — or near the user.

In 2023, such relatively small data centers will play a crucial role in the development of 5G services.

9. Giving back to the grid

In 2023, it is anticipated that data centers will become active participants in the energy ecosystem. In other words, they can sustain the electrical systems upon which they depend more successfully.

Utilizing the battery storage capacity of an uninterruptible power supply (UPS) to offer frequency balancing services is one way for data centers to act as producers as well as consumers. The Frequency Regulation Functionality (FRF) may be easily added to the UPS. This enables the grid to use the unused power reserves of a data center to respond to fluctuating load demands, thereby lowering the danger of blackouts.

10. Get your data center ready for global warming

Extreme temperatures, which caused Google and Oracle to shut down in the United Kingdom, have prompted several data center administrators to reassess their cooling strategies in anticipation of summer 2023.

Extreme heat affects cooling systems by causing their parts, including compressors, pumps, and fans, to work harder than normal, hence increasing the probability of system failure. Appropriate plant design, sufficient backup power, and an appropriate contingency plan for excessive heat may all contribute to the solution.

In addition, the shift to liquid cooling systems in data centers may be explored. This enables unprecedented rack density while delivering a system that is substantially more dependable and energy-efficient than mechanical cooling.

11. Greater virtualization to keep costs down

Software virtualization enables a computer server to interact with numerous virtual systems by building an abstraction layer above the computer hardware that divides its components (processors, memory, etc.) into numerous virtual computers.

This method can reduce hardware-related expenses since more activity may be completed with lesser physical units. Virtualization is one of the most relevant data center trends in a period marked by recession fears and inflationary pressures.

12. The data center industry may have to combat bad rep

There is a growing perception of data centers as “undesirable essentials” that consume important community resources such as water and energy. In a number of the most vital data center markets, community pushback to data center expansion is a growing impediment.

In Virginia, for instance, the clearance of a massive data center construction required a 14-hour supervisor conference to let hundreds of people voice their opinions.

As unfavorable news stories gather, aversion to data centers is likely to spread to newer growth markets.

The data center industry has long chosen to work behind the scenes to secure the support of local politicians while maintaining a low profile in any public discourse concerning its location. It needs to be seen if this is a viable long-term strategy.

One thing is clear: the industry is poised at an inflection point, and the right measures can drive growth, even as failure to acknowledge these top data center trends can cause enterprises to fall behind. That is why it is so important to understand the meaning and role of data centers in 2023.