Surging numbers of data applications - from" machine-to-machine" generation (M2M) to Articial Intelligence (AI) - are like a tidalwave pulling a very long supply chain in its slipstream
- Data Centers - Exponential Demand Growth - is the first theme of the series, to be followed in the coming weeks by :
- Data Centers - Infrastructure Challenges
- Networks and Fiber Optics
- Cloud - Data Architecture Applications
- Data - Enterprise Platforms
High - and sometimes exceptional - performance ratios recorded in the series may not be repeated, going forward
However, the strategies - and focused specialization - position some firms for outperformance, benefiting from the expanding data demand
Data Centers, built or managed by specialized real estate companies (REITs), have been caught up in this tidalwave of data stockage priorities
According to Cisco's Annual Internet Report (2018-2023),
A growing number of" machine-to-machine" applications (M2M), such as smart meters, video surveillance, healthcare monitoring, transportation, and package or asset tracking, are contributing in a major way to the growth of devices and connections. By 2023, M2M connections are estimated at 50% of the total devices and connections.
AI applications will compound previously projected growth trends in data storage demand...
From approx. 4% of US electricity demand in 2022, data centers are expected to account for 6% by 2026 (sce : IEA) and 8% of total consumption by 2030 (sce : Goldman Sachs) - making data centers the key driver in the American power market
Pure play data center REITs, such as Digital Realty Trust and Equinix, are unique but other REITs, specialized in telecommunication towers such as American Tower (AMT) or Crown Castle, have engaged
Housing thousands of server, storage and networking products as well as security, software and mission-critical applications, technical requirements of data centers are high - constraining the speed of expansion of the real estate specialists - in competition with the Internet giants
Deep vertical integration of Alphabet, Meta, Amazon (AWS), Microsoft (Azure), IBM and others, such as NTT DATA
It can be argued that, with AI momentum, these Internet majors are competing with one another and, therefore, must prioritize investments in data center networks they will control
While the count of data centers is forever growing and yesterday's statistics are meaningless, the number of servers, running into the hundreds of thousands (more than 4 million for Microsoft - multiple 100 000's for Facebook...numbers which surely are already out of date), signals the depth of their presence
Not included in the theme :
Digital Core REIT
GDS Holdings (ADR)
