Data Center Industry Expecting Double-Digit Growth

Savvy investors are always looking for places to put their money where they can expect not only safety, but also significant growth. A large number of them are turning to the data center industry, and experts believe this is going to pay off handsomely over the next several years. This is driven largely by the rapidly advancing technologies, including cloud computing and edge computing, which require both large data centers, and higher numbers of data centers spread out over geographic regions.

A recent report from Cushman & Wakefield predicted annual growth in the data center industry to be between 12 and 14% over the next two to five years. They do predict that a significant amount of this growth will come from expanding or retrofitting data centers that are already out there. New builds, however, will also continue to be a part of the industry.

Whenever dealing with significant growth in an industry like this, it is also going to bring in some additional opportunities. Specifically in this case, opportunities for mergers, acquisitions, and buyouts are going to continue to be popular. Companies that want to enter the data center industry, or those that want to have greater control over their own data center use, will be making bids on buying existing data centers, and even data center companies.

What is Pushing Growth?

Data centers are a key component of most types of technology today, which is not only driving the building of new data centers, but also helping to keep existing data centers full. Whether the data center is built, owned, and used by one company, or it is rented out by many, the demand is only increasing. The following are some of the key factors pushing continued growth in this industry.

  • Internet of Things (IoT) – Just about every new device you purchase from coffee makers to refrigerators connect to the Internet. This is a great convenience, but is putting huge new demands on the Internet infrastructure, including data centers.
  • Cloud Computing – With more and more data and processing being done ‘in the cloud’ (which actually means ‘in a data center’ the demand for data centers is going up significantly.
  • Edge Computing – Edge computing requires data centers to be located as close to the users as possible, which is helping to push the building of new data centers around the world.
  • Mobile Devices – Mobile devices are consuming more and more bandwidth, interacting with apps, and surfing the web. Much of this activity has to travel through data centers at some point.
  • Distributed Computing – Fast network connections and advanced data centers are allowing companies to move back toward ‘dummy terminal’ type devices where the actual storage, processing, and applications are done in a data center rather than on a local device.
  • Virtual Reality – This is one of the fastest growing types of entertainment out there. Virtual reality requires extremely powerful computing, which is often done in data centers rather than on the VR device itself.
  • Augmented Reality – Whether it is a simple AR game like Pokémon Go, or it is an advanced AR simulation like those used in the medical field, data centers are playing a key role.
  • Future Tech – There is little doubt that the next generations of technology will rely heavily on the type of stability and power that can only be handled in a data center.

Whether looking at the industry just for its ability to meet the technical demands of the future, or looking for an investment opportunity, data centers have a lot to offer.