Data Centers:

An Industry Shaped
by Disruption
and Change

December 2020

Commissioned by
Contents

3 Foreword

4 Introduction

5 Executive summary

8 Part 1 | Data centers in times of crisis – a historical perspective

Digital momentum – a story of prolific growth
Recession and shortage of capital
Natural disasters and terrorism
Key points

12 Part 2 | 2020: the year of mass disruption – the story so far

The impact on data center operations
The impact on project planning and execution
The impact on technology adoption
How portfolio strategies are changing
Key points
“We are delighted to have
written such a comprehensive
17 Part 3 | Adapting to an uncertain future report exploring disruption
Continuing relevance
Keeping the customer in focus
in the data center industry, as
Adaptability well as looking to the future
Sustainability landscape we find among
Resilience
Key points
such drastic change.”
Nick Parfitt
Global Analyst
DCD

2
Foreword

The global data center industry has remained resolute and

resilient, despite the adverse economic conditions across the
world caused by the coronavirus (Covid-19) pandemic. The sector
has played a crucial role in ensuring access to critical information
and services, as well as supporting key parts of the economy. This
mission-critical industry has never been more important.

As the rest of the world adapts to the new Covid-19 reality, data
center providers must redouble their efforts to build more capacity
across key markets as cloud adoption accelerates. If demand
continues to challenge supply in the short to medium term, there
is a danger that redundancy levels will thin across the board.

The pace of growth required to meet this rising demand means

bigger challenges lie ahead for the sector. Issues around land,
power and utility, availability, cybersecurity, the skills gap and
sustainability are all expected to become more pronounced
should Covid-19 continue to disrupt the world.

Today, the public are more aware of data centers and the major
role that they play in providing access to online services for
work and personal use. This has led to a notable positive shift in
perception among key stakeholders, particularly those in state “As we look to the future and
and city government. The sector must use this as an opportunity
to build and cement new global partnerships, and invest now to
our ‘new normal,’ it is vital we
safeguard the future. reflect on what we have learned
from the pandemic and the last
Matt Pullen, EVP and Managing Director Europe, CyrusOne
20 years of crises in our industry,
and weave the lessons into our
future business and operational
strategies.”
Matt Pullen
EVP and Managing Director Europe
CyrusOne

3
Introduction

This report examines how the demand for, and supply of, data
center and cloud services are impacted by global social, economic
and political disruption. This paper has three main sections:

1. H ow have past disruptions shaped the direction of the

industry, and what can be learned from them today?
2. H  ow is the industry currently responding to the pandemic
in terms of operations, design and planning, and how are
the dynamics of supply and demand changing?
3. What are the likely medium- and long-term impacts of
Covid-19 on the industry, and how will other projected
disruptions, including climate crises and geopolitical
conflicts, impact the sector?

Where relevant, the answers to these questions are supported by

industry research conducted by DCD globally since 2006. Where
other research or information is referenced, its source is specified.

4
Part 1 | Executive summary

What can be learned from past disruptions today?

Over the past 20 years, we have seen the global data center • he industry evolves its own solutions to deal with its
T
industry disrupted by multiple external forces, including economic problems. The shortage of capital for major data center
crises brought about by the dotcom crash in 2000, the global projects at a time of high demand growth in 2007-2009 led
financial crisis of 2007-2009, the coordinated terrorist attacks to sharp increases in enterprise data center rack densities
of 9/11, and a number of natural disasters. and migration into colocation and the emerging cloud
services sector. Among enterprise data center owners,
These disruptions have taken place in the context of an ever- energy consumption and costs quickly moved up their list
increasing demand for data center services. This has been driven of concerns. This in turn led to the increased adoption of
by increased access to the internet as a key part of everyday life virtualization to add capacity more cheaply and quickly.
and business. One of the key challenges faced by the data center
industry throughout this era has been keeping up with demand From the coordinated terrorist attacks of 9/11 in New York came
and maintaining availability. the recognition that back-up facilities needed to be separated
from primary facilities. New Jersey emerged as a location for
In a decade of rapid expansion, the two financial crises of 2000 back-up data centers for New York’s financial sector. The attacks
and 2007-2009 had the major impact of cutting off capital for exposed the vulnerability of networks linking data centers to
investment in new data center builds and major expansions, each other and to the world outside. Disaster management
leading to two key learnings: was re-evaluated as data centers cut off from utilities needed
to source diesel for generators, deal with a shortage of staff
• ithout adequate infrastructure, digital progress cannot
W and suppliers who were willing to come back into the city, and
happen. The dotcom crash was caused by overvaluing deal with air full of dust from the collapse of the Twin Towers. It
companies in the emerging technology and web-hosting was recommended that disaster planners prepare for multiple
sectors. This occurred predominantly because the simultaneous challenges, rather than just one.
infrastructure for fulfilling the growing demand for internet
services was not in place. The analysis of growth was Natural disasters have occurred in increasing numbers over the
largely correct but acted on far too early. This scenario of past 20 years. These present the most direct threat to a data
infrastructure running behind demand is now occurring center as they can put it out of operation through sheer physical
in a number of major emerging markets across the world, force, or by cutting it off from utilities, networks and suppliers.
including India, Indonesia, the Philippines, and Nigeria.
These markets do have the option of sending their data New York suffered again in 2012, when Hurricane Sandy hit lower
overseas – something that was not available 20 years ago. Manhattan, though there was a greater degree of preparation
as the city was switched off before the storm hit land. While the
extensive flooding knocked out those data centers where back-up
diesel and pumps were located in basements, the lesson from
11 years prior to distribute capacity, and the fact that the storm
was anticipated, allowed a degree of survival.

5
Part 2 | Executive summary

How is the industry responding to the Covid-19 pandemic in terms of operations, design
and planning, and how are the dynamics of supply and demand changing?

The data center industry found itself in a unique and privileged unabated, it may be that we start to see a return to the global
position when the pandemic hit, with no shortage of demand for financial crisis practice of ‘sweating assets’ and the potentially
its services as data traffic increased sharply at the declaration of the greater risks of failure that come with that.
pandemic in March. The growing trend has continued due to the
increased numbers of people working from home, international What has helped the industry during the pandemic is some
lockdown measures, and key services such as healthcare, European governments’ move to recognize the data center as
ecommerce and education delivered online. With a large portion essential, providing special dispensation for the continued mobility
of the population at home, the use of media platforms such as of labor and goods. The subject for debate for now, however,
Teams, Zoom, Google Meet, Skype and Webex has increased, and is whether the industry needs to be defined as critical national
on-demand video-streaming services have skyrocketed. infrastructure (CNI) or just ‘essential’, since there will likely be
some significant repercussions, including becoming subject to
In an operational sense, the industry has maintained resilience greater scrutiny and regulation from governments that still don’t
with some high-profile downtime incidents but nothing beyond properly understand the sector.
the average. Data centers are designed to be secure environments,
permitting only limited access, but extra measures have still There are different challenges in different parts of the world.
been put in place in order to prioritize the health and safety Emerging markets in Asia, Africa and South America are less
of employees, customers and partners. Such measures have likely than the United States and Europe to have manufacturing
included segregating operations teams, reorganizing rotations capability and the expertise to fit and repair equipment within
and handovers, and deferring all non-critical activities. Site their own borders. This makes these developing markets more
environments are sterile through increased cleaning and hygiene susceptible to supply chain failure.
services, and all team members are adequately informed and
protected through internal communications, best practice While there are some reported delays with larger projects, the
advice, and primary screening. need for suppliers to prioritize their resources has meant there
are even longer delays for smaller projects. This has particularly
From a design and construction point of view, the key issue is impacted the ability of enterprise data centers to keep up with
managing and maintaining the development pipeline to meet demand, and will likely push more to migrate into colocation and
demand. The steep rise in demand across the G7 economies in cloud where they can have access to the scalability and specialist
2020 in the first half of March was followed by a more gradual skill sets that may not be available in-house.
increase across the rest of the year. Naturally, there has been an
impact both to the supply chain and the ability of skilled workers As we come to terms with this crisis, it appears the
to travel to sites, though seemingly this has only impacted projects recommendations to prepare risk strategies for multiple
by a matter of weeks. The issue of permitting, however, has been catastrophes happening at once have not necessarily been
seen to be more problematic where government bodies do not heeded. Some data center providers remain unprepared for
enforce statutory timelines to respond to permit applications, problems with their supply chain, while others have not invested
and where resources are challenged. In these markets, such as quickly enough in automation technology and proactive facility
Frankfurt, operators are seeing the permitting process add months management. Put simply, some work needs to have been done
of delays. If delays to the delivery of new capacity continues before the events of 2020 played out.

6
Part 3 | Executive summary

What are the likely medium- and long-term impacts of Covid-19, and how will other projected
disruptions, including the climate crisis and geopolitical conflicts, impact the sector?
The demand for data centers and cloud will continue at the elevated cloud, colocation and ‘on-prem’ components, while those less
levels of H2 2020. It is expected that remote working will continue evolved relied far more heavily on their own data center’s capabilities.
to become more commonplace, employment levels may not return
quickly to where they were in 2019 as the use of technology as a What has happened through 2020 may be closer to the continuing
substitute for human labor accelerates through 2020, and a larger economic future than many data centers may be comfortable with.
number of new internet users will come online from emerging Global and large-scale problems can have serious local consequences
markets. Also, new technologies will continue to evolve towards in terms of the availability of investment capital, client bankruptcies,
more ‘data-hungry’ specifications. and the inability to import labor and expertise across borders into
new or emerging markets.
The operational processes for automation and proactive facility
management to allow fewer staff interactions adopted by data In terms of climate change, balanced and scientific opinion puts the
centers have largely been validated through 2020. timeframe for the consequences of global warming at less than the
20-year lifespan of a data center built today, if we don’t decrease
The future impacts of Covid-19 and its following recession are carbon emissions. In the past decade, data centers have been
broader. The events of 2020 will impact how demand requirements impacted by floods, storms, earthquakes, volcanos and bushfires,
will change, how the industry prepares against risk, and how it in both developed and developing economies alike. While all
fulfills its corporate role. businesses and industries share responsibility, data center operators
and their customers have a particular obligation to sustainability
Demand will change in terms of its source and requirement. A and stewardship given how they concentrate computing power
combination of increased demand, smaller and less agile data under one roof. The industry seems to be rising to the challenge
centers, and greater difficulty in executing upgrade or repair projects with commitments to becoming carbon-neutral or even negative
accelerated the migration of enterprise companies into colocation widespread among hyperscalers and operators.
and cloud – a consequence likely to impact smaller companies the
hardest. As consumption patterns change, this will continue the The skills gap is also a continuing theme of the impact of Covid-19
development of hybrid IT, multi-cloud and exchange ecosystem in 2020. Restrictions on labor in the data center and problems with
models. This may push colocation into a default position from which getting the right skills to the right place at the right time is a major
most forms of hosting and IT architectures can be accessed. concern across the entire industry. One key aspect of this is the
cultivation of workplace diversity. In the context of the industry’s
The companies that survived the pandemic and the subsequent skills gaps, this is not just a good corporate social responsibility policy
recession will likely need to transform how they do business in order but also a chance to refresh the engineering functions within the
to survive and prosper afterwards. This process of transformation industry, as well as filling the new sets of skills requirements.
would depend on access to adequate infrastructure.
The data center is moving closer to new technologies, data science,
A 2019 DCD survey indicated that as companies progressed through software, cloud and business objectives, and more recent skill sets
business transformation, they developed a portfolio including public are required to guide these transformations.

7
 PART 1

Data centers in times of crisis – a historical perspective

How have past disruptions shaped the direction of the industry, and what can be learned from them today?

Digital momentum – a story of prolific growth

The data center sector today is in a good place. Increasing
demand for services is based on the continuing reliance of Figure 1: Growth in data centers, 2000-2020
businesses, individuals, and governments on technology and data. Source: Estimates made from DCD Research surveys, 2006-2019
The evolution of the ‘digital era’ has driven the 21st century so far;
since 2000 we have seen: 60 60

• 13-fold increase in the number of internet users between

A
2000 and 2020. By September 2020, there were 4.929 billion

White space (m2 million)

users [InternetWorldStats].
• Growth based on the number of connected devices, which
rose from 2000 to 2020 by a factor of 11,500 to 23 billion. 40 40
Estimates suggest that by 2023, half of all connections

Capacity (GW)
will be machine-to-machine [Cisco Annual Internet
Report 2018-2023].
• The value of ecommerce increased from US$650 billion in
2000 to US$3.9 trillion in 2020 [Statistica]. Consider that the
figure for all ecommerce activity in 2000 is less than 8% of 20 20
the value of Amazon’s online revenue today.

The demand for data is potentially limitless. Digitalization has

created online equivalents for activities that have been around a
long time – shopping, communicating with friends and colleagues,
gaming and entertainment, working from home, and applying for 0
2000 2005 2010 2015 2020
jobs. It has enabled users to live in an always-on world of endless
choice and convenience. It has created dependence, particularly
when the physical world is inaccessible or threatening. White space (m2 million) Capacity (GW)

Data center growth has run in parallel to this growth in demand.

In 2000, the industry consisted of around 8 million m2 of white
(technical) space and 7GW capacity globally. By 2020, its footprint markets of North America, Western Europe, and Japan. The
has increased to an estimated 52 million m2 and 56GW capacity industry has grown since to meet demand in the markets of the
in 2020 (across all data center types). This growth has pushed data Middle East, Asia Pacific, and Latin America. As the recession “A 13-fold increase in the number of
center energy consumption to a point higher than the total energy of 2007-2009 delayed projects in North America and Western
consumption of the United Kingdom. Europe, the emergence of China, India, Russia, Brazil, and South internet users between 2000-2020.
East Asia created a new phase of growth. Further growth will come
from large numbers of people and businesses in South Asia, Latin
By September 2020, there were 4.929
Growth in the demand for data centers across the world has not
all happened at the same time. The initial base was the established America, and Africa, which are still to fully come online. billion users [InternetWorldStats].”

8
 PART 1

“Continuing increase in demand

has created resilience against the Figure 2: Growth in the proportion of enterprise data center servers virtualized, 2005-2019
Source: DCD Research
broad economic challenges the
industry has faced. Data centers 20%

are essential infrastructure.”

Growth comes also from advances in digitalization. Successive

% Enterprise footprint virtualized

15%
generations of data-driven technologies across all business
sectors and areas of personal life require greater connectivity and
greater data center capacity to function:

• isco estimates that between 2018 and 2023, the average

C
global fixed broadband speed will more than double, mobile 10%
speeds will more than triple, and 5G speeds will be 13 times
higher than the average 2018 mobile connection.
• While the proportion of enterprise companies in the EU
using a fixed broadband connection has remained steady at
just over 90% since 2014, the proportion of these enterprise
companies using the fastest internet connections of greater 5%
than 100 Mb/s has tripled to 23% [Eurostat].

This continuing increase in demand has created resilience against

the broad economic challenges the industry has faced. Data
centers are essential infrastructure. 0%
2006 2008 2010 2012 2014 2016 2018
Recession and shortage of capital
The most critical threat to the data center is the lack of the
resources needed to deliver its services. One of these resources
is money. Data centers need capital to build or extend, to meet
demand, and then money to run the facility. The first decade of This particularly hit the expanding colocation sector as tenants, storage and data center infrastructure. Investment after the crash
this century was marked by two periods of time where money particularly those in the web-hosting sector, faced financial looked to remedy this. The scenario that it is impossible to satisfy
was in short supply. Both periods started in the United States – hardship and bankruptcy. In response, colocation companies the accelerating IT requirements of local businesses and citizens
then, as now – the world’s leading data center market. exposed to vulnerable IT sectors cut costs and halted expansion without adequate data infrastructure continues to be played out
plans as occupancy rates and revenue declined. in a number of emerging data center markets around the world.
The late 1990s saw considerable interest in the opportunities
presented by increasing use of the internet. Web-hosting emerged The crash created a sense of risk around the emerging IT sector, The survival of data centers through a period of low capital
as a key means of enabling emerging consumer and business until continuing demand from consumers and businesses availability was demonstrated again during the 2007-2009
demand. Investors and markets sought to capitalize on this trend, established more realistic growth expectations. Yet it spurred global financial crisis.
but it did not materialize as quickly, or to the extent expected. investment once capital became available. The inflated expectations
This led to the dotcom crash. Less available capital and investor of value that caused the crash failed to recognize that in the late The challenge faced by data centers was driven by delay in signing
suspicion of IT companies impacted investment in data centers. 1990s, demand was being held back by inadequate network, off on building new enterprise data centers, and a number of these

9
 PART 1

Natural disasters may be ‘one-off’ events, but they are usually

Figure 3: Global incidence of weather-based, natural-disaster events, 1970-2019 based on continuing local geological or climatic risk factors.
Derived from: EM-DAT: The Emergency Events Database – Université Catholique de Louvain (UCL) – CRED, D. Guha-Sapir The acceleration of climate change over the past 50 years has
www.emdat.be, Brussels, Belgium contributed strongly to the increased incidence of weather-based
natural disasters, as shown in Figure 3.

There has been a three-fold increase in global fossil carbon

400 dioxide emissions, from around 13 billion tonnes in 1970 to 37
billion tonnes in 2019 [Global Carbon Emissions, United States
Environmental Protection Agency].
Number of events

300
Critically for data centers and other key infrastructure, natural
disasters can lead to the shutting down of power, water and
200 networks, and restrict access to staff and suppliers. Hurricane
Sandy hit the Atlantic Coast of the United States in October 2012.
ConEdison, the utility company providing electricity to New York
100 City, shut off power at 7pm on 29 October in anticipation of Sandy
making landfall later that evening. Problems in accessing mains
electricity and then running out of diesel led to a number of major
0 data centers staying down for several days.

2000

2008
2004

2006

2009
2002
2003

2005

2007
1980

2001

2010
1990
1988
1984

1986

2018
1989

1998
1994

2016
1996

2019
1999

2014
1982
1983

1985

2012
1992

2013
1993

2015
1995
1970

1978

1987
1976

2017
1979

1997
1974
1972
1973

1975

1981

2011
1991
1977
1971

Additionally, flooding caused problems in lower Manhattan,

in buildings where back-up fuel was stored in the basement,
Year together with the systems that pumped the fuel up to the data
center. In this situation, facilities in the main flood areas that had
Wildfire Flood Extreme weather Extreme temperature Drought fuel stored higher up the building performed better during the
storm. It is worth noting that some buildings had moved fuel and
pumping systems lower after the 9/11 attacks.

The hurricane knocked out 300,000 voice access lines, 4.5 million
builds were held over to 2009/10. The demand for data center Increasing power densities drove the deployment of server data circuits and disabled 10 cellular towers [Harvard Business
services continued unabated, so the challenge was to increase IT virtualization as a means of improving efficiency in energy and Review], and affected the operation of a number of data centers in
capacity without relying on high-capital projects for building or space use. It also sped up the delivery of additional capacity. lower Manhattan, including those at 25 Broadway. This data center
extending data centers. As data center technologies and hosting Virtualization has enabled cloud service providers to spin up was not hit directly but was impacted by the loss of mains power,
options had further evolved in the years since the dotcom crash, so servers very quickly to meet a rapidly increasing demand curve. the need to find supplies of diesel (and spare parts), and problems
had the industry’s capacity to adapt and respond to the challenge: caused by poor air quality after the collapse of the Twin Towers.
Natural disasters and terrorism
• One option used was to keep capacity in-house by ‘sweating Natural disasters, including earthquakes, tsunami, volcanos, Following these events, business continuity plans paid far greater
the asset’ – putting in higher rack densities and supporting this hurricanes, cyclones, bushfires, snowstorms, heatwaves, floods attention to how to resume critical operations rapidly after an
with refit and upgrade. However, increased power densities and drought, are the most common form of crisis potentially faced unanticipated disruption, and how to continue across a time
added to concerns about rising energy consumption and costs. by data centers. As they tend to be local in impact, they present period when the availability of supply utilities, vendors and staff is
• The two-year period also marked a strong increase in the use the greatest threat to the availability of the people and resources restricted. There was greater attention paid on distributing critical
of colocation by US enterprise companies to supplement the required to run the data center. capacity across different locations.
capacity in their own facilities.
• There was an acceleration also in the uptake of emerging The overall number of disasters has increased since 1970. The The concentration of infrastructure supporting the financial
cloud services – DCD research on the New York market five-year moving average increased from around 60 ‘events’ in sector around the World Trade Center, and the location of
indicates a five-fold increase in the number of enterprise the mid-1970s to 320 at 2019. This cannot really be explained by back-up facilities close by, made the whole system vulnerable
companies starting a cloud deployment from 2007 to 2009. advances in media and information-gathering since 1970. to interruption.

10
 PART 1

Post-9/11, New Jersey took on a greater importance as the

location for ‘split operations’, disaster recovery, back-up and
secondary facilities, especially for New York City’s key financial
sector. This strategy was validated as a means of reducing the
impact of Hurricane Sandy.

The threat from wildfire is also mounting. In California, raging

bushfires hit Sonoma County in November 2019 and forced gas KEY POINTS
and energy supplier PG&E to cut off part of the power grid, which
affected both the Lawrence Berkeley National Laboratory and
the NERSC supercomputer. This decision enabled a planned and The past 20 years have been marked by an ever-
staged shutdown and, as a longer-term strategy, influenced the
subsequent decision to migrate suitable footprint into the cloud.
increasing demand for data center services, which
even global recessions have not halted.
At the same time, bushfires in Australia did not directly impact
any data centers but exposed the vulnerability of comms and Therefore, the key challenge in most situations is to
data networks traversing affected areas. maintain availability.

The dotcom crash was in part caused by the failure to

recognize that without adequate data infrastructure,
“The past 20 years have been marked digital progress cannot happen.
by an ever-increasing demand for The industry generally looks within itself for solutions
data center services, which even through technology and operations. To make up
global recessions have not halted.” for a lack of capital for new build, data centers
compensated by increasing rack densities. Enterprises
migrated into colocation facilities and the emerging
cloud services sector.

Natural disasters have occurred in increasing numbers

over the past 50 years. These present the most direct
threat to a data center as they can put it out of operation
through sheer physical force, or by cutting it off from
utilities, networks, and suppliers.

To avoid local threat, separate back-up facilities are

needed from primary locations.

Disaster planning needs to prepare for multiple

challenges happening simultaneously and visualize
how to survive over a period of little or no supply from
utilities, vendors or staff.

11
 PART 2

2020: the year of mass disruption – the story so far

The events of 2020 have impacted the data center industry across • Backing up supplies of diesel and spare parts.
many of its core activities: • Using DCIM and BMS to monitor critical infrastructure.
• Developing a maintenance schedule that focuses on priorities
• Operations
and defers other tasks.
• Project planning and execution
• Technology adoption The situation is more complicated for colocation data centers
• Portfolio strategies that would normally welcome visitors from client organizations,
particularly at a time when the pressures on client IT may be
The impact on data center operations increasing. Visiting may have been arranged under different
It is rarely possible to operate a data center without any visitation policies, service-level agreements, and access rights with different
from staff, clients or contractors. While there has been some drive customers. There are a number of solutions that have been
towards ‘lights-out’ facilities during the pandemic, this cannot be adopted to minimize risk, in particular AV-based technologies so
an immediate solution in many data centers. clients can check on their space and activity without needing to
visit the data center in person.
Many of the technologies and upgrades required to create a
people-free data center also require staff or suppliers to carry For companies providing colocation and hosting services, there
out the installation and maintenance work. will be the need to ensure agreed levels of resilience by working
out issues of staffing, supply chain management, replacement
According to Marlana Bosley, data center strategy and market equipment, and maintenance procedures, in situations where client
intelligence lead at Corning, speaking in April 2020 at DCD’s resources are not available to conduct or assist these activities.
New York virtual conference: “These few months have been
challenging, and there’s no clear view of when these headwinds The second major area of impact on operations is the increased
will come to an end. Starting with staff and construction, level of demand through 2020. The number of people working,
moving people in and out of data centers has always been shopping, gaming, communicating online, and learning from
tricky, but now it’s more difficult than ever.” home has added to a volume of network traffic that was
already increasing rapidly.
Most data centers already control human access closely for
security purposes, therefore they are better able to adapt to The pandemic has seen a significant increase in remote working.
minimizing human interaction and creating a Covid-sensitive The International Labour Organization (ILO) estimates that almost
space than most other workplaces. However, a number of 8% of the world’s workforce – some 260 million people – were
key practices have also been introduced in response to the working from home before the pandemic. This number may triple
pandemic including: before the end of the year [Policy Brief: Working From Home:
Estimating the Worldwide Potential]. Studies have indicated that as
much as 40% of the working population in the European Union and
• Ensuring staff safety and availability for the work that needs
United States are working from home in the second half of 2020.
to be done in the data center.
• Minimizing human access and contact. Unemployment provides another source of additional internet
traffic, as people at home make up for the activity, social
• Ensuring that there are replacements for key personnel. framework and direct contacts they had at their workplace. The
• Tracking cleaning and sanitation activity. director-general of the ILO, Guy Ryder, indicates that working

12
 PART 2

hours lost globally in the second half of 2020 will represent the
equivalent of 400 million full-time jobs.
Figure 4: Experience of disruption during Covid-19 pandemic
Source: The Uptime Institute
The volume of IP traffic started in 2020 at around 194.4 exabytes
per month [Cisco]. The UK’s Organisation for Economic
Co-operation and Development, in its publication, “Keeping the 5%
Internet up and Running in Times of Crisis,” estimated in May 4%
that internet exchange points were experiencing growth as high
as 60% over pre-pandemic levels. Since then, record increases
in data traffic have been observed in most countries, and new
10% Not experienced a service slowdown or outage
that could be attributed to Covid-19
records have been set in a number of exchanges.
Had Covid-19-related IT service slowdown
The Frankfurt Internet Exchange (DE-CIX) reached a record peak
in data traffic in March at more than 9.1 Tb/s, more than double
Had Covid-19-related IT outage or service
the five-year average of 4.1 Tb/s. On 10 November, that peak was
interruption
surpassed as traffic reached almost 10.4 Tb/s.
Had IT service outage, interruption or slowdown,
Exchanges in Dublin, London, New York and Amsterdam (key data
but operator unsure if related to Covid-19
center hubs) have also hit new peaks throughout 2020.

A key indicator of change in human behavior during the pandemic 81%

has been the way in which we communicate, and the platforms
that enable us to do so:

• M
icrosoft Teams saw 75 million active daily users in April,
accounting for 4.1 billion minutes. By October, the number
of active daily users had increased to 115 million.

• Z
oom indicated that a volume of 100 billion minutes at the
end of January 2020 rose to 2 trillion by April 2020. Zoom • A
mazon Prime membership hit 150 million in January and overall increase year-on-year. Revenue from hyperscale
as a company is now worth more than any of the world’s is projected to reach 200 million by the end of the year. operators grew far more, by 22% [Synergy].
largest seven airlines.
• The Disney+ streaming service, launched in November 2019, According to DatacenterHAWK, commissioned power into North
• W
ebex hosted 20 billion meeting minutes in April, up from reached 55 million subscribers in May, and surpassed 61 America’s top 18 data center markets increased by 2.8% into
14 billion in March and around 7 billion in February. million in August. Q3 2020, an increase broadly in line with the average rate of
quarterly increase. Major European markets – Frankfurt, London,
• G
oogle Meets, a relatively new entrant in this space, achieved Note that the figures above are largely those reported by the Amsterdam, Paris – indicate a similar rate of increase of 3.6% in
100 million daily participants in April. companies themselves. commissioned power quarter to quarter.

• F
acebook usage has increased by 37% since the start of the The digital world cannot happen without infrastructure. As a result There was a considerable increase in all forms of data traffic
pandemic, while WeChat has increased usage by 58%. The of demand, overall global cloud spending reached $36.3 billion immediately after the World Health Organization announced
Facebook subsidiary, WhatsApp, increased by around 40%. for Q3 2020, up 33% over Q3 2019 [based on data from Canalys]. Covid-19 as a pandemic in early March. Major stock markets
Year-on-year revenues have increased by over 45% for the major declined sharply in response to the announcement.
Similar growth patterns can be observed for subscription viewing US-based players (AWS, Microsoft, and Google) and by lower rates of
services: 1
increase for the major Chinese cloud providers (Alibaba and Tencent). In China and Eastern Asia, this data step-change started earlier as
the pandemic surfaced earlier. These countries have more recent
• N
etflix grew to 193 million subscribers at the end of June 2020, The demand for cloud services drove Q1 revenue for the experience of dealing with epidemics than Western markets and
up from 158 million 12 months before. colocation sector to US$9.5 billion, which represents a 7% knew to shut down activity and test widely as quickly as possible.

13
 PART 2

In these situations, there will need to be some examination of The key steps taken to overcome these challenges include the
Figure 5: Challenges faced on data center projects through 2020 contracts to realign the costs of maintenance, resilience and protection of people through distancing, temperature-testing,
Source: DCD expected lifecycles of facilities. support to staff, remote meetings, and keeping in regular contact
with suppliers. In one in four cases of new build, there has been
60% The core expectation of the data center is that it will remain some need to revise the project schedule.
resilient, and there is no suggestion that there has been
58% Major cloud and colocation projects appear to be progressing,
more downtime or service interruption due to the upsurge in
% Projects (2020)

demand since the start of the pandemic. if slower than originally planned. The designation of data center
projects undertaken for major cloud providers as ‘essential work’
Writing in May 2020, Andy Lawrence, executive director of by the US Department of Homeland Security, Cybersecurity &
40% research at the Uptime Institute, stated: “For the most part, Infrastructure Security Agency has helped construction in key
internet traffic flow analysis shows that a sudden jump in demand, areas such as northern Virginia in the United States.
along with a shift to the residential edge and busy daytime hours,
has had little impact on [uptime] performance.” Points of bottleneck include:

In Uptime Institute’s survey of 200 operators conducted in April • G

etting the permissions for necessary stages of the project; in
24% 2020, 84% of the respondents had not experienced a service particular, securing planning permission or permits. Projects
20%
22%
slowdown or outage that could be attributed to Covid-19. Yet one planned for regions where there is no statutory response time
16% in 10 had suffered a Covid-19-related IT service slowdown, 4% are finding the process delayed for an extended period as local
revealed a related IT outage or service interruption, and 5% had an authorities shift their focus to other areas of responsibility.
12% 12%
IT service outage, interruption or slowdown, but the operator was
8% • T
hose parts of the construction process that are most labor-
6% unsure if it was related to Covid-19.
0% intensive, and where skilled labor needs to be brought from
It is possible that the changed world and increased dependence distance.
-si r

me

es

on the internet has created a greater focus on downtime. Some

en
on isito

ilit
te

nin t

an y

ca ent
sio jec

liti
em kl
g

n
pti
ipm

ilab

of the notable reported outages that have occurred through

tio
t d uic

uti
rtifi m

• Delays caused by blockages in supply chains.

ety r, v

mi pro

ce vern
va

the pandemic (without attributing any of these specifically to

qu

ee y q

ith
o
saf cto

t
om in

ta
e
s

gw
s

Covid-19) include Zoom, Microsoft, Cloudflare, Google Cloud

i

ing go
a

to apac
, c em

en
o
ntr

ris

Additionally, there is a growing challenge for larger cloud

alin

including Gmail, Snapchat and Nest, AWS, OVH IaaS services,

i
ly

ett ith
m

l
l
co

,c
tio rob

al
pp

dc

providers that increasingly require a significant level of

s, g w
ion

De
tor

Sharp, IBM Cloud, Tokyo Stock Exchange, Unisys, CenturyLink,

ff

su
ina P
n

cie ing
ad
Sta

customization of equipment and away from operators’ standard

dit

ac

Equinix, T-Mobile and Adobe.

s in

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to

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Ad

designs. This can add to delivery times, as well as requiring

ag De
lay

ed

co
ord

additional permits for bespoke specifications.

De

Ne

The impact on project planning and execution

fe,
co

Sa

There have been issues with delivering construction, fit-out and

extension work. This has serious implications for an industry These additional considerations in 2020 will potentially impact
needing to meet high demand and maintain resilience, as well how quickly these new buildings can be constructed.
as stopping projects to install technologies such as automation
After the initial step-change, data traffic then rose more gradually and other AI-led innovations.
through the year.
A review of 50 data center projects conducted through 2020
Data center capacity consumption patterns have also changed. indicates that 31 projects have been impacted in some direct way “A review of 50 data center
Before the pandemic, cloud customers in colocation facilities by the Covid-19 pandemic. These projects include data center
typically utilized 75-80% of their capacity outside peak times. new builds and extensions, edge rollouts, migrations and refits. projects conducted through 2020
During the Covid-19 crisis, they have regularly drawn 100% of
their available capacity for extended periods to meet public Covid has meant that the main pain points are the increased
indicates that 31 projects have been
demand for applications and services. This poses a long-term need to address staff, contractor and visitor safety on-site, impacted in some direct way by
challenge for data center operators and may directly impact difficulties with project coordination and management, and
their ability to maintain resilience. delays in the supply of equipment. the Covid-19 pandemic.”

14
 PART 2

chains are more regionalized, within the established markets of Microsoft CEO Satya Nadella stated in April 2020 that the
Figure 6: Actions taken on data center projects through 2020
Europe or North America, there appears to be less disruption. company had seen “two years’ worth of digital transformation
Source: DCD [of Microsoft technologies] in two months.”
Emerging markets may be more vulnerable due to a greater reliance
on imports and a greater need to bring in specialists from overseas. The acceleration towards automated management and control
50%
systems, and towards software-defined infrastructure, is a longer-
Through the course of Q1 2020, most major equipment vendors term trend that started before 2020. The objective has been data
48%

into data centers reported or projected decreased revenue as centers that are more agile in dealing with variable demand, more
40% projects got pushed back, or as suppliers in their supply chain efficient in using resources, and which require fewer people.
were unable to deliver. The second half of the year is seeing Fewer staff reduce labor costs and may also reduce the 70% of
stabilization and recovery. downtime for which people are estimated to be responsible. It
enables the data center to be managed remotely and for ‘failover’
34%
% Projects (2020)

30% A similar picture emerges for stock markets: those that got hit badly to be activated automatically. Companies need to have been
in early March had also mostly recovered by early November 2020. proactive enough to have put those controls in place beforehand.

Relatively few have done so. Research conducted across the Asia
The impact on technology adoption Pacific in 2019 indicates a cautious adoption in the deployment of
22%

20%
The necessity of deploying technology to meet the challenges digital technologies in the data center.
of 2020 has brought innovation and adoption forward. It is
16%

estimated that the development, testing and adoption of systems The trend towards modularization has accelerated since it
12%

10% that are automated and software-driven has accelerated. incorporates more off-site assembly. This move is also long-
10%

8%

6%

0%
Figure 7: Technology adoption, Asia Pacific, 2019-2020
lls
ga es –

tin s

lie t

re f d

ule

jec n,
rly
pp tac
ee ion
n

gs

rs

ab

ts
, p an

ski
p ro at i o

Source: DCD Research

tio

ed
ea
on
t
g re u r

on gn
d m ica

al
ch

for om
nt
se as

loc
cti esi
u
an un

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g, me

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s

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Deployed/deploying Intend to deploy

tru d

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m

in
h

n s i ze
t
g
cin lth

om

ftw on

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qu

ro
Re

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tanHea

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ec

re

s o re

Br

25%
nd

mo
de

vis
lin

St a
Or
On

Re
dis

ly
Re

20%

15%
In North America, it is reported that data center providers are
focusing on projects for larger customers, therefore a backlog 10%
of smaller projects is building up. This is impacting enterprise
projects more than service data centers and is a factor in pushing
5%
more enterprise companies towards colocation and cloud.

Supply chain disruption is also mentioned as a cause of delay. 0%

s

lea chinnd

aly a/

ras defi ware

IM
This may be due to the increasing focus of China on the internal
tem

rni e

ctu d
an g dat
tic
ng

re
tru ne
ma AI a

DC
market, the closure of local manufacturing operations, and

ft
sys

So
transportation difficulties in response to health and safety risks.

Bi
IoT

In the Asia Pacific, equipment sourced from Taiwan or South Korea

inf
tended to be easier to access than that from China. Where supply

15
 PART 2

established, on the basis again of reducing labor costs on-site

and shortening delivery timescales. Figure 8: Change in global hosting profile –
enterprise, 2010-2019
How portfolio strategies are changing Source: DCD Research
The pandemic has sped up enterprise migration out of their 4%
on-prem data centers. The acceleration of this trend is due 3% 3% 1% 1%
to concerns about managing an enterprise data center with 100%
14% 18%
insufficient staff available, uncertain supplier support, and the 8%
19% KEY POINTS
need to access the greater depth of skills and resources found 20%
in larger service data centers. 21%
75% 23%
The Uptime Institute study of April 2020 indicates that the 74% 2020 has seen a continued increase
major concern of data center operators is a reduced level 69%
64% in demand based on more home working,
of IT infrastructure operations staff (32%), a loss of business
revenue/demand (17%), and reduced scheduled maintenance 58% lockdowns, and the delivery online of key

% Footprint
50% services such as healthcare and education.
for equipment (15%) [“Covid-19: What worries data center
management the most?”].
The key issue is managing and maintaining
The colocation sector is continually evolving and has developed
facilities so they are able to maintain
a flexibility beyond its initial role of providing space and power. 25%
The sector moved into facility-based services, then into the resilience while meeting demand.
provision of cloud services, interconnectivity and exchange
ecosystems. This will enable it to meet the upswing that has Changing and more continual demand
occurred since the beginning of 2020, particularly in demand patterns has left less room for error
0%
for cloud services. 2010 2013 2016 2019 for cloud and colocation providers.
Cloud and colocation data centers that offer hyperscale will Maintenance and repair schedules are
On-prem Colocation Public cloud Other now being prioritized.
benefit as enterprise struggles to deliver necessary levels of
agility and scalability inside their own data centers.
Emerging markets are more vulnerable
The key reasons given for migrating out of the enterprise data network mean greater vulnerability to cyber threats. Cybercrime
to supply chain failure, and there are
center include: has increased sharply since the start of the pandemic:
longer delays for smaller projects that
• Security (both physical and cyber) • I n January, Google registered 149,000 active phishing websites. are not prioritized. This is pushing more
By March, that number had increased 3.5 times to 522,000. enterprises to migrate into colocation
• Resilience and cloud, but it also indicates the need
• I n April, Google reported seeing 18 million malicious emails and
for a strategy using different hosting
• Cheaper cost Covid-19-related malware in a week.
components.
• Scalability • According to the FBI, there are 4,000 reports of cybercrime
per day, or one every 20 seconds in the United States. There is strong evidence that some
• Agility [DCD Research, 2019] data centers have not invested quickly
• I n August, the United Nations Security Council also warned of
enough in technologies for automation
The need for security has joined availability at the top of this a 350% increase in phishing websites, many targeting hospitals
ranking. People working from home and a more dispersed and healthcare systems. and proactive facility management. Some
work needs to have been done before the
events of 2020 played out.

16
 PART 3

Adapting to an uncertain future

The strengths that have enabled the data center industry to These trends have evolved over the past 30 years. They • C
ompanies that had not looked at transformation were far
overcome past challenges include: accelerated in 2020 but do not represent a major change of more reliant on in-house data centers (for 75% of their IT
direction. The virtual world offered advantages of convenience, capacity) than those at the more advanced end of the spectrum.
• R
elevance: Meeting an increasing need based on the global ease of access and time-efficiency (not having to travel to go Their portfolio is divided between on-prem (32% of capacity),
trend towards internet usage and digitalization. to work, go shopping or visit people) well before the pandemic. colocation (37%) and public/private/hybrid cloud (31%).
All that changed in 2020 was that more people spent time online
• C
ustomer focus: Understanding how customer requirements out of necessity rather than choice. For colocation and cloud providers, this business transformation
of services and facilities will change. will mean increased demand for their services. Businesses may
It is predicted remote working will become more commonplace choose to deploy servers in retail forms of colocation to access
• A
daptability: Using technology and process innovation to in developed economies, while a greater number of people in cloud directly or via a colocation provider.
respond to challenges, and learning from those responses. developing countries are due to come online. These factors will
drive growth in the data center sector for the foreseeable future. As hybrid IT configurations evolve, this suggests some continuing
• S
ustainability: An understanding of the industry’s corporate role for on-prem data centers, and for colocation providers offering
role and responsibilities in terms of global issues. Businesses that survive the pandemic and the subsequent access to both the rack and cloud components of hybrid IT.
recession will have done so by rethinking the way they do
• Resilience: Maintaining service availability through best practice. business, particularly as to how they can incorporate technology It is possible that a lengthy recovery from the current global
into their business processes – their online presence, sales recession will impact data centers adversely, with some sources
Will the strengths that have enabled the industry to move forward and service delivery, the automation of systems and processes, suggesting a recovery period might last most of the coming decade.
through past challenges enable it to do so once again? customer response, and being able to reach beyond a limited
physical territory to new customers and suppliers. A recession in both established and emerging markets will
Continuing relevance reduce the numbers of small and medium enterprise companies
The key reasons for the existence of data infrastructure – to Studies in both the European Union and United States indicate available as potential clients of colocation and cloud operators.
house, protect, store and network data – will continue. that most businesses are concerned about what will happen after It may also slow the speed at which smaller businesses are able
the pandemic subsides. Business survival will require strategies for to grow. This would limit the number of companies requiring
IDC has estimated that the sum of the world’s data will reach transformation in applications relevant to their business activity. data center and cloud services.
175 zettabytes by 2025, representing a compound annual
growth rate of 61% from 2018. This estimation was made before Bernard Marr, author, futurist and strategic business and Some of the warning signs from the recessions following the
2020’s upsurge in data traffic unfolded, so the 2025 figure will technology advisor, writing in Forbes, said: “In the coming months, dotcom crash and the global financial crisis are emerging. These
end up higher. businesses are going to become more reliant than ever on their include reports of clients of colocation providers in financial
digital strategy. Without wanting to sound too alarmist, in many hardship, media reports of unoccupied or underoccupied data
cases it will be the deciding factor in whether they make it centers, and some smaller vendors and providers in difficulty.
through the tough times ahead.”
While the wider tech industry is far larger and broader now, this
Without adequate data infrastructure, it is far more difficult to still has the chance to disrupt. The spectre of 2020 may give a set
“IDC has estimated that the sum deliver business transformation. The DCD Research study of of events that would happen in most ‘normal’ years a darker hue.
January 2019 indicates that:
of the world’s data will reach 175 Keeping the customer in focus
• I n-house server densities rise as business transformation moves The profile of companies using cloud and data center services
zettabytes by 2025, representing forward. In enterprise companies that had not really started will change over the next decade, as will the hosting and
a compound annual growth to think about transformation, power to the IT load averaged IT delivery options available to them. Understanding these
3.1 kW/rack. In companies where the process was considered changes will be important in supplying data center services
rate of 61% from 2018.” to be well advanced, the average was 5.2 kW/rack. and procuring them.

17
 PART 3

industries and less likely to be serviced by the infrastructure

necessary to enable digitalization. Therefore, growth will come
Figure 9: Post-pandemic changes in sectoral growth and IT requirement in a series of waves from different regions and sectors, at
Source: DCD different stages of the digital evolution.

Growth 2019 proportion The commercial basis of data centers means that there needs to
be a transactional payoff for cloud or enterprise providers – retail
goods, movies, healthcare, financial services and advertising
30 – in order to support enterprise, cloud and colocation data
infrastructure. This will impact how hosting and the delivery of IT
23%
architectures will adapt and evolve over the next decade.
20
14.3%
16%
Adaptability
13%
11% 11.2% In past crises, enterprise and government end-users have
10 6.9% 8% 8% accelerated their migration from on-prem data centers.
6% 6%
5.3%
6%
The next few years will see this enterprises continuing.
3% 3.3%

0 An increasing amount of data will be moved from on-prem

-2.2% -1.9% -2.7% -2.3% to the cloud or outsourced, and Edge will push processing
-5.4% capabilities closer to customers.
-10
e

a re

ing l

tur er

u re

tio ,

rvi al

ea nd

me d

es
bu rt
tur ria

ing

rc h

nt
nc

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se ssion
fac sum

ce
tri spo

tri
resion a
fac ust
hc

eis
ura

na ing

us
alt

disTran
dl
nu Ind

nu on

ind
Figure 10: Post-Brexit changes in UK’s data center profile

fe
ns

ma sult
at
He

an

P ro
ma C
di

uc
Source: DCD

ar y
n
on
an

Ed

co
ma

im
at i

Cloud provision Colocation & telco Other enterprise

ce

IT

Pr
c re
an

Financial services
Fin

Re

800

Activities where human interaction is less easy to replace with process towards online delivery they started before the pandemic.
virtual equivalents include live entertainment, cultural experiences, The key drivers were to save time and costs while improving 600

MW capacity (est)
media and exhibition activity, travel and transport, ‘real-world’ reach and service levels.
sales activities (such as real estate), hospitality and tourism.
400
These have been worst hit by lockdowns, distancing and travel There are sectors where considerable growth is expected over
bans. Most of these sectors survive on discretionary consumer the next four or five years. However, human contact is not the
spending, which is more likely than necessity spending to be only factor determining future use of data centers and cloud. In 200
cut in a recession. most sectors, there will be conservative companies that resist
technology. Other companies are more progressive and have
Digitalization has already happened in situations where human developed a strategy for digitalization well before 2020. 0
contact is not critical. Take, for example, the greater use of

y)

20 as

20 d

20
20

20
to pte
cit
There will also be considerable geographic variation as the need

l to ss
contactless debit and credit cards, which has led directly to the

20
pa

ua ine

th ru
to live and work more online has thrown the ‘digital divide’ into

MW
decline of cash transactions.

ca

pa t dis
us Bus
sharper relief. This divide is not just between more established and

st)
s
(M

Mo
younger economies but occurs also within countries and regions.

l (e
Some of the sectors that have evolved digitally to ensure the

16

tua
delivery of key services during the pandemic – telehealth and The most common divide is between urban areas with higher

20

Ac
‘in-home’ hospitals, remote education, research and development, prosperity and service-based economies, and rural and remote
business networking and teleconferencing – have continued a locations that are less likely to be affluent, rely more on primary

18
 PART 3 5

Cloud will continue to evolve into hybrid and multi-cloud from the natural migration to colocation and cloud happening in 12
forms. This will enable a far greater choice for users between most established markets around the world.
cloud providers and their services. It will mean the expansion Figure 11: ‘Whole of life’ energy consumption
April May June Source:
July
DCD August September
of cloud exchange facilities that can provide the infrastructural According to CBRE, the London data center market is expected
capability to deliver multi-cloud. This may see the colocation to end 2020 with an additional 67MW of capacity, an increase of
facility return to its position as the ‘default’ option from which 9% on the end-2019 figure. This represents around one-third of
it is possible to access cloud, facility, Edge and transformation the quantum of growth in Europe’s four major markets (London,
services, and as the basis of hybrid IT architecture. To achieve Paris, Frankfurt, Amsterdam) and at a similar rate of growth.
7%
this, the colocation facility of the future will need to build on
the basis of hyperscale and interconnectivity. At a global level, an inability to conduct maintenance, refit, or 8%
extension activities will impact data centers, particularly smaller
Adaptation is required also in the face of disruptive geopolitical data centers, if suppliers continue to prioritize their schedules. 35%
10%
activity. When the United Kingdom voted in 2016 to leave the
European Union, it was the largest data center market in Europe The risk to the supply chain will increase if an extended recession
and a major recipient of foreign inward data center investment. drives some smaller vendors and contractors out of business.
Brexit took effect at the end of January 2020, but delays in 11%
negotiating exit terms and the severe impact of Covid-19 across Some operators may choose to reconsider complex and lengthy
Europe means that the accuracy of many of the predictions that supply chains. This may benefit smaller, local vendors and lead
were first made in 2016 remain untested. to greater investment in local manufacturing capacity, but only
where there is the existing capacity to do so. 29%
The possible effects of Brexit were estimated in 2016 for data
centers 100 square meters and larger. DCD data suggests that, The repurposing of local manufacturing for specialist IT and M&E
if the UK were left to its ‘business as usual’ path, without any equipment will be far more difficult than repurposing for face
disruption from Brexit, the national footprint, including both masks, gloves or hand sanitizer.
enterprise and service data centers, would remain at just over IT equipment and operations
1.5 GW capacity at 2020. The most likely course is that supply may move further towards Shell, site and construction
being regionalized around techno-hubs in younger markets, Network equipment and operations
In a worse-case scenario, where Brexit caused inward investment which have been most vulnerable to supply chain disruption. For Facility equipment and operations
to dry up and left UK data centers to cater only for local and instance, in Asia, Singapore may act as the supply hub for South Decommissioning and remediation
non-EU requirements, the UK footprint would drop to a point East Asia and Oceania; Bangalore for South Asia; Dubai for the Refit/refresh processes
28% below the ‘business as usual’ path. Middle East. This will enable sets of growing or developing markets
to replicate the greater supply chain stability of established
Based on best estimates, the UK’s data center and cloud sector markets such as the European Union and the United States.
has held up to a total level around 12% below 2016. Cloud
provision, colocation/telco, and other IT services have reached Sustainability Major cloud players and some data center vendors have a public
in 2020 beyond their highest projections to a level 28% higher Data centers have demonstrated through the pandemic a face due to their marketing of services and products to the general
than in 2016. sense of how they fit into the world as providers, consumers, public. There has always been some public awareness of data
employers, investors and business leaders. This is not just through centers in locations close to where they are built. However, there
Service data centers now represent a clear majority of space (68%) keeping the internet running, but also through specific initiatives – is a case for building a wider and more positive awareness.
in the UK market. Most of the loss in enterprise footprint occurs supporting clients in financial difficulties, making facilities available
to assist the development of vaccines and models with which A positive public attitude may have some impact on public and
to analyse the pandemic, and helping to bridge the digital divide political debate and on attracting new talent into the industry. As
where connectivity has become an issue in accessing education, data centers drive more personal and business activities, so their
“Service data centers now represent healthcare or support. sustainability practices will become more connected to the brands
they support.
a clear majority of space (68%) in The levels of public awareness of data centers, and the role they
play in society and the economy, are increasing as generations In crowded and competitive marketplaces, that consumer driver
the UK market.” who have not known a world without the internet grow up. will become increasingly important.

19
1
 PART 3

The sense of data center community responsibility is based on two committed to becoming, at the very least, carbon-neutral. This
foundations of sustainability – environmental and social. Pursuing commitment is not just about what those companies do in terms
each also makes good business sense for the data center sector: of their own operations but is a requirement of those companies “Global data center workloads rose
that supply them with products and services. Major data center
1. Looking at the procurement and consumption of resources, operators, including CyrusOne, have made similar pledges. 550% between 2010 and 2018, while
in particular power but also water, the energy that is used
to manufacture, transport, install and maintain equipment The very good business reason for any data center to move
energy consumption rose only 6%.”
(embedded energy), space, connectivity, money, people. towards this is that the proportion of operating costs spent
2. Looking at policies in relation to recruitment, education, and on power is high. The justification for any data center will vary Joe Kava, Vice President of Data Centers | Google
training. The availability of staff and/or third-party skills to according to the size, age, profile and operations within a data
meet increased demand through 2020 has been the most center, and by deals cut with energy suppliers. The average
major area of concern. is around 40% of operating costs, according to research estate management into skill sets from IT, networking, analytics,
conducted annually by DCD Research. security, software, and strategy (=matching data center capabilities
In terms of energy consumption and procurement, the data center with business requirements). Different markets will have different
world is currently moving away from a justifiable preoccupation Efficiency of energy procurement and consumption, therefore, shortage profiles, depending on the technological development
with energy efficiency and towards looking at how power, makes a major impact on the bottom line, and it can be improved. of their data centers, the level of competition for skills from other
equipment and resources are procured. According to Joe Kava, vice president of data centers at Google, industries, local standards of education and training, relative salary
speaking at DCD New York in April 2020, global data center levels, and awareness of the data center as a career option.
Over the past decade, the trend towards energy efficiency and then workloads rose 550% between 2010 and 2018, while energy
sustainability has been driven by the major cloud providers. Google, consumption rose only 6%. In Google’s case, this has been In DCD’s 2019 Asia Pacific survey, the shortage of people with
Microsoft, Amazon, and Apple all have committed to strategies achieved by using AI-enabled cooling systems. the required levels of qualification and experience was a greater
for accessing energy from sustainable power sources and all have resource concern than lack of energy or water.
Major cloud and colocation providers have created a precedent,
whereby the sustainable and resilient design and operation of the Based on DCD data, it can be estimated that in 2020, 850,000
Figure 12: Profile of data center workforce (% samples) in data center make a statement about the company’s commitment people are working in the data center industry worldwide, and
2014 and 2018 to technology, to customer service, and to good corporate that 550,000 of these are in IT-related activities. The majority of
Source: DCD social responsibility. Increasingly, they will expect their suppliers this workforce continues to be male, while the profile has shifted
2014 2018
to share the same values. marginally towards younger workers and females.
Gender
And it is not just about energy but increasingly about water also. DCD research into skills over the past decade has always indicated
Male 92% 86% The water use of a large data center can be considerable – based that a more diverse workforce stands a better chance of avoiding
Female 8% 14% on an average Water Usage Effectiveness rating, a 100MW campus skills shortfalls, and that those markets with the most conservative
would have a water demand of 1.1 million gallons (4.2 million policies in regard to diversity are those with the most acute
Age liters) per day. At an average consumption of 100 liters per day, skills gaps and the need to make up that shortfall by importing
45 years and under 54% 53% that is enough water for 11,000 people. [Data Center Water: expensive foreign skills.
Hyperscale and Complexity, watertechonline].
Over 45 years 46% 47% Hiring overseas workers has obviously not been possible through
Average 45.9 years 44.7 years The second key element of sustainability is social – the 2020, except in some ‘essential’ cases, and the situation may
responsibility towards equality, diversity, ‘decent’ work (that is not improve soon as the two countries that export the greatest
Time in industry productive and delivers a fair income in a secure and nurturing numbers of skilled people – the United States and India – are
environment), and recognition of the needs of all stakeholders. (as of November 2020) the two countries where the greatest
Under 5 years 30% 34%
As with environmental sustainability, meeting this set of numbers are affected by the pandemic.
5 to 10 years 27% 25% requirements also makes good commercial sense. The idea of
the skills shortage is one that is used often in relation to the The greatest diversity in 2018 is found on the fringe of the data
Over 10 years 43% 41% data center and cloud industries. center – in the IT, apps, cloud architecture and networking
Average 8.5 years 8.7 years skill sets. These skills areas have younger average ages and fewer
As the data center transforms, skills requirements have moved years in the data center industry. This reflects current growth
from a focus on facility design, engineering, operations and real trends towards converged, cloud, and virtualized architectures.

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 PART 3

The enterprise disaster recovery strategy means looking at all adverse sustainable outcome in the long run. Higher temperatures
Figure 13: Increasing incidence of natural disaster
available data infrastructure options together. Therefore, in a and humidity will make cooling systems work harder, adding to
events, 1970-2019
Derived from: EM-DAT: The Emergency Events Database – hybrid IT situation, what are the risks associated with the on-prem energy consumption and costs. Buildings and equipment housed
Université Catholique de Louvain (UCL) – CRED, D. Guha-Sapir or collocated component and those associated with the cloud outside will be more vulnerable to extremes of temperature and
www.emdat.be, Brussels, Belgium component? Trends away from a reliance on on-prem data centers humidity, damage from flood and subsidence, and to reduced
have accelerated through the pandemic and will continue after it. building life. Temperature extremes also impact staff availability.
500
The connected nature of data centers will make them more
The need to maintain resilience puts focus on all stages of the data vulnerable to threats along the connection paths.
400 center lifecycle, including site selection. As more data centers get
built in more places, greater attention needs to be paid to natural The idea that you distribute infrastructure to improve resilience
risk. This applies not just to younger data center markets with a rather than relying on a single ‘fortress’ data center was learned
300
prevalence of natural risks – Indonesia, India, Colombia, Thailand, after 9/11; however, if climate change threatens key connections
China, for example – but in established markets also, such as the between sites, does this invalidate the distribution principle? And
200 US, the UK, Japan, Australia, Iceland. how does this impact the distributed rollout of Edge, which is
projected to be a major infrastructural change over the next decade?
As global warming takes effect, the incidence and severity of
100
wildfires, typhoons, and flooding are projected to increase,
together with the longer-term risk of rising sea levels on coastal
0 cities and communities.
1970 1980 1990 2000 2010 2020
Data centers have historically been located close to the
populations they serve, with only major cloud players locating
where they have greater access to renewable energy sources and
The increasing demand for updated in-house IT capability and the
cooler climates to reduce the need for mechanical cooling. Many
need for closer corporate links with the data center will create a
data centers are located therefore in coastal cities. A 2018 paper,
younger, more diverse workforce around the data center. Those
“Lights Out: Climate Change Risk,” by professor Paul Barford of the
areas of greatest concern are all those that would appear to be
University of Wisconsin, calculates that by 2030 “about 771 PoPs,
older and less diverse – data center operations, management,
235 data centers, 53 landing stations and 42 IXPs will be affected
network, and mechanical engineering. The modern data center
by a one-foot rise in sea level.” Site risk evaluation therefore needs
needs to be supported by new sets of skills.
to look at the location’s future vulnerability.
Resilience
Climate change is also placing a constraint on the sector’s ability
The data center industry has, for the most part, come through
to design and develop sustainable facilities that meet future
the events of 2020 less impacted than many other industries.
environmental goals. For instance, if the vision for a data center
Many of the practices used to deal with the disruptions of the
is to build properties with free air-cooling models to minimize
pandemic are already in place for companies dedicated to
the amount of water and power required to manage internal
resilience. Yet the learnings are there that to maintain resilience
temperatures, worsening global warming and air pollution will
will require a number of changes in thinking:
dramatically impact this model’s efficiency and possibly have an
1. To move from a system of risk evaluation that focuses inside
the data center to one that looks outside to supply chains,
as well as looking beyond considering threats from a single
event perspective. “By 2030 about 771 PoPs, 235 data
2. To plan for an increase in the frequency and severity of natural
threats. This may in time be a requirement of the insurers of
centers, 53 landing stations and
the data center. 42 IXPs will be affected by a
3. To adapt thinking about risk based on planning for events and
consequences that may be unforeseen. one-foot rise in sea level.”

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 KEY POINTS

Demand drivers for data centers and cloud will continue. Remote working
will continue, employment won’t return to where it was in 2019, and
technology as a substitute for human labor has accelerated through 2020.

The operational processes used by data centers have largely been

validated through 2020. The future impacts of Covid-19 and its following
recession are broader.

Most businesses that survive the pandemic and its recession will need
to go through business transformation to survive. The process of
transformation depends on access to adequate infrastructure – as
companies progress through business transformation, they developed a
portfolio, including public cloud, colocation and on-prem components,
while those less evolved relied more heavily on their own data centers.

As consumption patterns change, this will continue the development of

hybrid IT, multi-cloud and exchange ecosystem models.

Sustainability for the data center sector is increasingly business-critical.

Scientific opinion puts the timeframe for the consequences of global
warming at less than the 20-year lifespan of a data center built today,
and these include a range of natural disasters. The environmental
responsibilities that come with sustainability can be justified on the
grounds of self-preservation, as well as in terms of reduced operational
and energy costs. This requires a view of risk that is beyond the walls
of the data center but that is appropriate for an industry moving further
into public view.

Lack of available skills are a continuing theme of what has gone wrong
so far in 2020. In the context of the industry’s skills gap, encouraging
diversity (by all definitions) is a chance to refresh the engineering
functions, as well as filling the new sets of skills required as the
data center moves to new tech, data science, software, cloud and
business objectives.

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