Data centers: The COVID-19 impact
Reports are showing that cloud computing, unlike many other industries, has seen a massive uptick in volume during the COVID-19 crisis. Because a publicly released vaccine is unlikely to enter the market for some time, content driven data centers might be in the middle of a growth period.
These speculations are supported by what we are seeing at RackSolutions – a rise in large quantity server rack purchases with a decrease in lower quantity purchases. So, unless the virus is killed off, now seems to be an important period of expansion in the data center industry.
New streaming services increase data demands
One of the most interesting examples of a growing need for data storage solutions is an app called Marco Polo. It’s like Snapchat meets iMessage meets live streaming and it’s grown 12x since COVID-19 hit.
This is the one of the only applications that saves every video message ever sent. Unless a group chat is inactive for 90 days or someone intentionally deleted videos, they are kept forever at no cost.
Marco Polo compensates for having to store everything by making the video quality, frankly, terrible. Because of this, it’s not surprising that they can afford to store data. What is exceptional about Marco Polo is that they are getting users accustomed to free video storage through the cloud.
Outside of this app, users are conditioned to believe that storage is one of those features that you just have to pay for. If your iMessage is filled with too many videos, you will have to pay for iCloud and Google Drive only comes with 15gb for free.
Potentially, Marco Polo has opened Pandora’s box when it comes to free storage which in the long run could incentivize bigger players to offer more free storage. This, in turn, would drive more people to embrace cloud storage.
On top of this, Tik Tok’s growth throughout 2019 only sped up while the US started to lock down. Video content was already flourishing on Instagram, so the fact that an entirely new video sharing app expanded so quickly goes to speak to consumers relentless demand for video content.
Working from home means video chatting
Working from home on its own doesn’t create a larger demand for cloud storage in comparison to working in an office. Most businesses have some sort of centralized and secure network that is able to store data in an effective manner.
Increased data usage while working from home is primarily a result of human preferences. Video chatting is common and easily accessible these days, but it hasn’t been as much a case in the office.
Employees could easily start a conference call with no cameras enabled, but that’s just not what they like to do. So, as soon as workers got sent home, they were trying out every video conferencing app under the sun to find out what they liked.
After US workers were sent home in March, Zoom saw a 20x increase in users throughout the next 3 months. Since conferences are routed through data centers on Zoom, they likely needed to sign contracts for more bandwidth which would incentivize the place that they signed to expand capabilities.
A potential resurgence in cases
The bottom line is, the Coronavirus pandemic did not slow the growth of the data center industry. We are experiencing a rise in orders from data centers and a decrease in low volume web orders, which traditionally come from small businesses or enthusiasts.
Now, while everyone knows RackSolutions makes amazing products, these larger purchases aren’t driven by sales interactions, but by internal forecasting based on increased capacity demands.
Currently, data centers need more racks which means they are expecting more business. Working from home in most states only lasted for about two months. If data centers didn’t think there would be an increase in sustained demand afterwards, they wouldn’t need to be making purchases.
One reason for expecting sustained demand is that this experience has systematically changed people’s habits. A few months ago, a grandma who spent tons of time with their family might have found themselves alone more often and picked up a new hobby playing Fortnite. Okay.. Maybe not the best example, but the point is that COVID-19 is driving people to the internet, and there’s a chance of it lasting.
The other consideration is that COVID-19 hotspots might develop again in the near future and drive people right back to working from home. If this was the case, data centers would need to be prepared.
Regardless of what happens next, we are excited to create solutions for the evolving industry. It’s great to see that data centers are proving to be resilient institutions even throughout exceptionally difficult times.