As business leaders continue to find their feet at the start of this new year, Michael Winterson, Managing Director, Equinix Services and Chairperson of the European Data Centre Association, outlines some of the trends expected to develop despite anticipated economic challenges.
The past year has been beset by challenges affecting the data centre industry which have not only tested its resilience but forced operators to concentrate their thinking on how best to manage the difficult road ahead. Despite continued geopolitical turbulence, the ongoing energy crisis and continuing supply chain struggles, the industry remains focused on its longer-term ambitions to meet sustainability targets and programme of innovation to keep pace with advancing technology.
One of this year’s key priorities for the data centre industry is to position sustainability at the forefront of everything it does. With the European Sustainable Finance Disclosure Regulation making emissions reporting compulsory in 2023, businesses will be looking for reliable partners who can help them minimise the Scope 3 emissions arising from their IT infrastructure. The data centre industry is striving to achieve carbon neutrality by 2030, and Equinix, as a founding member of the Climate Neutral Data Centre Pact, is leading the charge. It has opened a new co-innovation facility to develop new sustainable data centre technologies, including fuel cells and liquid cooling, which will add to industry efforts to cut emissions.
The industry expects to see a rise in the use of renewable energy sources as well as the application of ‘circularity’ by developing frameworks for the reuse of resources, such as waste heat and hardware. European business leaders, partners and customers are now prioritising sustainable initiatives. According to Equinix’s 2022Global Tech Trends Survey (GTTS’22), 56% of IT decision-makers in EMEA will only work with IT partners who meet key carbon reduction targets, while 73% of global IT decision-makers believe reducing the carbon footprint of their digital infrastructure is critical. Aligning with clients and partners and supporting them in their sustainable transformation is now a key factor in securing new business.
In today’s fast-paced, digital world, it is essential for data centres to focus on improving the customer and employee experience. This includes providing fast and reliable access to data and resources, as well as a seamless and intuitive user interface. By continuously improving and modernising their systems and processes, data centre operators can meet the needs and expectations of their customers and partners by seamlessly supporting the rapid adoption of new technologies and digital infrastructure. According to Equinix’s 2022 GTTS’22, 82% of EMEA IT decision-makers see improving customer experience as one of their top priorities for future success, while 78% think improving employee experience is a future-proofing priority.
Companies are striving to become more resilient and are branching out into new areas to bring their digital infrastructure closer to their partners, customers and employees. This will deliver an improved user experience and gives businesses the power to grow their data capabilities to realise their expansion ambitions.
Businesses are adopting new technologies, such as AI, IoT and 5G, to improve their competitive edge and operational resilience. The applications of these technologies require the ability to process tremendous volumes of data, and the need for increasing data capacity is only going to accelerate in coming years. The data centre industry needs to support businesses in improving their underlying IT architecture to facilitate their Digital Transformation and to form faster and more reliable connections. For example, enabling companies to scale rapidly by deploying a hybrid multi-cloud infrastructure or deploying at digital Edge locations to allow them to expand through secure backend and frontend IT connectivity.
Investing in new technologies such as digital twin technology will also be a key focus in 2023. It enables businesses to create a virtual replica of a physical asset, process, or system, which allows them to simulate and analyse performance in a virtual environment before a physical implementation. Through this process, organisations can optimise their operations, better serve their customers and predict business trends that reveal potential issues and opportunities early on. Faced with an uncertain economic landscape, digital twin technology can provide vital insights into business-critical factors, such as supply chains and data capacity, which will give them an added advantage against their competitors.
Companies are also looking to improve the digital connectivity of their remote workforce in order to improve productivity, employee well-being and retention. Hybrid working is here to stay, but it can be difficult for companies to ensure that remote workers feel engaged, connected and supported. According to PwC’s global workforce survey for 2022, 63% of the employees surveyed would prefer a mix of in-person and remote working. Digital infrastructure will play an ever-increasing role in supporting companies as they grow their digital communication channels to ensure their remote workforce can continue to work collaboratively.
Cyberattacks create costly disruptions and data breaches which can significantly harm an organisation’s reputation and bottom line. This challenge is set to significantly increase, according to the EU’s latest cybersecurity report, while the GTTS’22 reveals that 83% of European IT decision-makers list cybersecurity as their top priority for the immediate future.
In 2023, data centres will play a crucial role in increasing cybersecurity by implementing advanced technologies and protocols to protect against the evolving threats. These measures will include solutions including Multi-Factor Authentication (MFA), encryption and continuous, real-time monitoring to detect and respond to potential vulnerabilities. Businesses will need to trust that their data is being securely stored and managed, particularly as they expand into new markets and migrate more functionality to the cloud.
As the industry navigates the path ahead, there is much to celebrate in terms of Digital Transformation and technological innovation. This will not only improve services and offerings but help to shield businesses from a shrinking global economy while remaining competitive in their markets. This is a time for the industry to invest and innovate so they can embrace the exciting possibilities ahead.
