In the digital age, data has become the lifeblood of businesses and individuals alike. I’m sure you’ve heard the saying that data is the new oil. It can be helpful to look at data centers as the engine or brains of the internet that we take for granted. Without them, it’s likely you wouldn’t be reading this article on your tablet, phone, laptop, or desktop.
Sidenote, if I earned a GBP pound for every time I heard that ‘data is the new oil’ from someone speaking at a conference, I wouldn’t be a millionaire, but probably be earning six figures. Maybe think of a different angle to take when you’re thinking this will wow the audience. And its a bit of irony in it as it’s not that new, because I’ve been hearing about it for at least the past 3 years.
Anyway, rant over, back to data centers. To accommodate this insatiable demand, data centers have sprung up across the globe. These fortresses of computing power serve as the backbone of the digital world. Yet they face a growing challenge: demand for their services is outpacing their capacity.
The cloud, which data centers support, is a consistently expanding place. The current estimate by First Site Guide is that about 2.5 quintillion bytes of data are being generated each day by internet users. And remember data can come in all shapes, sizes, and file types. To give you an idea of this wider picture, according to Finances Online around 41.5 million messages are shared by WhatsApp users every minute, 1.38 million phone calls made, 400,000 hours of video streamed just on Netflix, 147,000 photos shared just on Facebook. Kinda blows my mind that is being created every hour on top of what’s already in the world, compounding on top of each other.
Businesses, governments, public services, and individuals have a choice of where to store data on the cloud. Factors that will decide where this is stored depend on how secure it is, how accessible, how much data you have, and several other factors that can be enough to fill its own article.
This has led to the dominant brands coming under examination for the role they play. A recent example is how Amazon and Microsoft are having their cloud dominance placed under review by the British media regulator, Ofcom, as reported by Reuters. Something these big tech companies have in common is the constant thread of being told or commented on that they have monopolies in the areas they specialise.
I mean it’s easy to understand why when you see the figures. For example in the cloud, Microsoft and AWS combined had a 70-80% market share in 2022. But then at the same time, how is it their fault if they have such an awesome product that people are attached to consistently using? I mean there are probably a dozen arguments I could come up with for either side over the space of an hour on this topic.
But, this article isn’t about who has the iron throne for the cloud market. So let’s get back on course. First, if you are aware of what data centers are and how they operate, you can skip the next section. If you’re not familiar with them, or you want a new angle of what and how they are designed, then this is for you!
Understanding Data Centers
A data center is a facility designed to house and manage an organization’s computer systems and data storage infrastructure. These facilities come in various sizes, ranging from small server rooms to massive complexes spanning thousands of square feet.
They are equipped with layers of advanced security to protect the powerful servers, cooling systems, and redundant power supplies all to ensure uninterrupted operations. The same layers of security that are making your precious personal G-drive files safe are the same thing keeping the IT systems of a hospital running.
To give you an idea of how big these spaces are, using one of AWS’s data centers as an example hosts 80,000 servers. These are over the space that can make 102 terabytes of data every single second.
Nvidia’s leather jacket-wearing head honcho, Jensen Huang, projected in August 2023 that $1 trillion will be spent on data center upgrades for the sole purpose of AI. With most of the money being invested or costs being paid for by either Amazon, Google, Microsoft, or Meta.
In my opinion, the purpose of a data center is a physical place to primarily house servers, storage devices, and supporting networking equipment such as routers, firewalls, and switches. Without these three vital components, we would not have the cloud. And would encourage you to think how it would disrupt your personal, business, or just your daily operations or tasks if there was no longer any access to websites or your online data storage.
If you were lucky enough or more probably that you had high enough security clearance to go into a data center, you could expect to see rows and rows and rows of server racks. Everyone I’ve seen or watched videos on, including the video below looking at the Amazon version they all don’t seem that high.
If I was head of design I’d be making them as high as warehouses that Amazon ships products out of. Which is probably the same reason I never will be head of design. And that was a joke for anyone wondering, as I’m sure the design of the place is probably thought out on the same level if not more than the security of the place.
Location Selection for Data Centers
Well, probably the first determining factor is that if you want to pick a place for a data center, you need to ensure it’s got a shit tonne of available space. And in my view, it’s one of the bigger issues. Because as big as the world is, it still does have a limit for the space on it. That’s not to say we can’t get creative or technological advancements won’t change the space required for a data centre.
Just think about how many floppy disks, that hold up to 2.8MB, you would need to now match the data you can put on a 512GB memory stick which is the same length as an index finger. The same thing will likely be considered with data centers as more advanced servers and supporting equipment get innovated.
Currently, there are around 8,000 data centers in the world. The USA has a reported 5,375 of them as of September 2023, according to Statista. To put in perspective how many they have compared to the rest of the world, the place with the second most number of data centers is Germany. They currently have 522 data centers. The UK is third with 517 data centers.
Bear in mind, with the massive power and capabilities a data center has, it’s likely we don’t know about every single one. I would say it’s likely there are data centers that are remote, not known about, not listed, and can’t be found on Google Maps, even though they might own it. And that’s right down to the security of them. Not likely places that house Government sensitive or national security documents on the cloud are going to have a signpost saying next right.
Even though, hidden or not, determining where to build a data center has gone through various decisions and meets numerous design criteria. Key considerations include proximity to customers or end-users, access to reliable power sources, connectivity to high-speed networks, risk of natural disasters, availability of onsite skilled workforce, and climate conditions.
And then think about how much space is needed for backup systems, cooling systems to stop everything from overheating into a meltdown, and the taxes with local rates that will need to be paid for all the electricity and water the place will be guzzling. After all that, you’ve got to get the place on the same standard as a high-security prison. Best to have deep pockets if building a data center is on your agenda.
On-site security of a data center
Joe Kava, Vice-President of Data Centres at Google explains in a Google Workspace video how out of all the employees at Google, only a “very, very small percentage of those employees are authorized to even enter a data center campus”.
Joe goes on to explain that Google data center campuses will have various levels of higher level security, the closer to the center of the campus you get. Even the champions on Takeshi’s castle or Ninja Warrior wouldn’t stand a chance of getting into these data fortresses.
Although we’ve used AWS and Google’s data centers as examples of high-security procedures and designs put in place, this doesn’t guarentee they can’t be gotten into. And remember a data center is putting all that valuable information on the cloud where you’re in the complex arena of hacking.
This is considered such a high risk to certain companies, that they hire hackers to spot the flaws and gaps in their cyber security. If you come across someone’s LinkedIn profile with the title ‘white-hat hacker’ or they say that they are an ‘ethical hacker’, they are the people making sure your banking info, medical records, purchasing history, sensitive information for a lawsuit, personal messages, and god knows what else protected for only the people intended to see them.
It’s such a valuable, important role for a business to have if they are dealing with people’s sensitive personal information at scale. Say, for example, a healthcare insurance provider or bank. Especially as more data is being created at faster rates in more avenues leaving more potential gaps and loopholes in security measures put in place.
For example, although it’s not a data center, it is data that was taken from a physical, on-site location, look at what happened with Edward Snowden. A headline example of someone who got a physical hard drive of data out of various levels of higher level security with key information to start a nightmare for the US government by being accused of using people’s data without consent.
I can only imagine the number of reviews that place and other data centers got put under to ensure that the suggested ‘breach of national security’ never happened again. Whether that was a breach of national security or Snowden, who now resides in Moscow, exposing misuse of the public’s private data, I’ll let you decide.
If you rock up at a data center expecting a tour with open arms, you’ll probably be a bit upset when they turn you around at the outside security gate. You can expect to see these data centers having perimeter security with fencing walls, barriers, sensor alarms, and cameras staring at you from multiple directions. And that’s just from the outside at the first entry gate. Also, bear in mind you will likely have a long drive ahead of you as well. Everything from the surrounding population, crime rate, and potential natural disaster risks are all considered.
If you are, like Joe from Google, lucky enough to be able to go past that first checkpoint, there are increasing levels of security to make sure you’re cleared to see that level. At the first level, you will be extensively background-checked, be on the access log so you are tracked from the second you enter the premises to when you leave, have biometrics taken to make sure it’s you, have cameras constantly watching your movement onsite, have doors that are censored and go off if they are open for a second longer than they are meant for, and god knows what else.
I do get it though. Not only are the onsite security and measurements mentioned above protecting your data and global businesses’ data, they are also protecting the needed onsite equipment. This includes items such as backup generators, backup generators for the backup generators, advanced environment control conditions to cool, humidify, or increase airflow to the premise, and Uninterruptible Power Supply systems in place to never need the backup generators.
In short, you can expect data centers to be more secure and security zone controlled than a prison.
Examples of Industries Where Data Centres Are Being Used
These powerful, high-security data centers have a good reason to be seen as they power the cloud networks that the people on the planet use on a single-second basis. This might also paint a picture in your mind why, as more and more data is being created every day with increasing data touchpoints, why the need for more data centers is growing.
From streaming the new episode of Top Boy on Netflix (or Gen V on Prime) to playing with your mates on the latest Call of Duty in the moment with no lag. Or checking your Revolut bank and making international payments with a touch of your finger in seconds to a doctor pulling up accurate medical documents such as imagery or writeups of your recent appointment or procedure in seconds. This is all made possible because of data centers.
Financial Services
Banks, investment banks, financial institutions, and pretty much any financial-orientated business handling other people’s or businesses’ money are using data at an increasing rate. Data is being processed to handle various different aspects of the finance world.
Think of risk management for starters. Data centers are feeding information (data) to financial institutions, such as an investment bank, that has floors of traders looking to use that data to make a more accurate or profitable trade. The data centers enable this investment bank to run risk management algorithms that analyses massive amounts of data sets in record time.
It’s used to enable speedy and supportive customer service. Increasingly banks are shutting physical stores and going digital through banking apps. It’s because of the data being stored and sent to the cloud from data centers that host web servers, databases, and application servers that enable you to access your banking account and make any transfers 24/7 without any problems.
Content Streaming
For this, it’s fairly simple. If you enjoy streaming shows through Disney, Netflix, Prime, or any other app then data centers are what power them to be able to do this. They enable businesses that offer these services to store and manage the vast libraries of audio and video content to send to you on your sofa or anywhere with a stable Wi-Fi connection.
This content doesn’t just include movie and TV streaming, oh no. It also includes streaming of podcasts or music on platforms such as Spotify, live broadcasts on platforms such as Rumble or YouTube, and TV Shows on platforms such as ITVX. To put this in perspective of how much data is being captured that needs to be stored in a data center, read the following example. Squid game on Netflix collectively has been reported to have been streamed for 1.65 billion hours. This is about 188,356 years of time spent on one show out of the thousands of titles available and the dozens of other popular apps available. s
With all these examples comes user personalisation. You might have seen it on YouTube when you’ve watched a video or a Netflix show and it recommends the next show to you ‘based on your viewing history’. This is because the data center stores all this information and feeds it back to the company and eventually yourself.
Data centers are used for a whole range of behind-the-scenes capabilities that you might not notice or give any consideration to when watching your favorite show. For example, load balancing techniques to ensure user requests are distributed evenly across servers, when a popular TV show is on Sky Live for example, or a sports game such as the Super Bowl or World Cup.
Another example is data centers enabling adaptive bitrate which supports real-time streaming. It’s similar to the above but this is what makes it possible to switch on your TV, pick a show, and start watching instantly, without the need to download or wait.
Healthcare
In healthcare, data centers are instrumental to the success of hospitals, GPs, clinics, and the admin that happens behind the scenes. In healthcare, there are consistently increasing amounts of patient data that need to be stored and processed to meet the goals of the digital transformation initiatives healthcare systems around the world are embarking on.
Patients’ personal data is only part of the bigger picture. Although this data is crucial to be able to improve patient care it’s used for other areas in supporting functions that loop back around with the aim to give a patient a great user experience of any healthcare service.
Data centers are storing a variety of data on top of patients’ personal data. Medical image storing and sharing is a key to learning how to improve areas such as spotting diseases, viruses, or infections earlier. This is also used to understand complicated or rare situations to do with human anatomy such as if someone breaks a bone in a particular place or has unexplainable symptoms from a treatment, for example.
It can also be used to translate data into analytics that can improve staffing at locations such as hospitals, increase response time to emergencies outside the building walls, or know how many beds they will need to predict the likeliness of how busy the hospital will be. This data all needs a place to be analysed and moved around, which is where data centers help.
Another area is in research, development, clinical trials, and drug discovery. Because data centers house the data, people in this area rely on it being stored and readily accessible to run analysis or machine learning methods to find breakthrough discoveries. And because we’re now a global economy and sharing is caring, when one person or department finds out about a possible cure or improvement, they want to share it through the cloud.
All these above examples are where data centers can facilitate the exchange of these ideas and information securely. It can be as simple as moving a patient’s healthcare records as we mentioned above or tonnes of data on a new anti-bacterial drug or procedure to use in surgery to improve the success rates of the operation.
E-commerce and Retail
Data centers are the backbone of e-commerce and retail operations, providing the necessary infrastructure to handle online shopping, manage inventory, process transactions, and ensure a seamless shopping experience.
For e-commerce and retail, think about every touchpoint where there is data being stored. And not just from being in-store but online. According to Big Commerce, eBay has about 2 billion daily transactions. Amazon apparently makes about $1.4 billion in sales every day which equates to 1.6 million packages shipped on average per day.
That’s a shit tonne of data being captured just across two examples of businesses. And there are tens of thousands of these sites doing daily transactions, just in the retail and e-commerce arena, let alone other industries.
There are all sorts of areas which could have their own articles. But here are some to get you thinking. Customer data management, personalisation with recommendations of other products, looking at the data of orders to have accurate inventory and lower business overhead, and content delivery to understand where the channels that people buy the most or get the most engagement/value.
Energy and Utilities
Data centers are increasingly important in the energy and utilities sector, where they facilitate the management of power generation, distribution, and consumption data. If you think about all the homes that are in the UK alone, which has been reported by Statista to be approximately 25 million as of March 31, 2021, that’s a lot of power going through power grids and water getting supplied.
But it’s not solely focussed on the energy going to homes. Think about how renewable energy is getting increasingly in the spotlight as a potential way to lower the negative environmental impact on the way we live on this planet. The data centers play the role of integrating wind and solar power into the power grid while understanding the grid’s stability.
In the financial world, traders are making deals on the pricing of different energy. And of course, all this data can be stored in the data center to be analysed for a multitude of reasons. Admittedly I’m not that familiar with the energy sector. That being said, it is clear the sector is increasingly looking to improve predictive analytics.
One example of this is that when natural disasters unfortunately happen, we can understand the impact or get enough time to evacuate the area. Another example is that it is used to analyse the usage of energy on a larger scale which can result in understanding how to lower energy consumption for a business, city, county, and entire country.
One of the bigger overall issues energy and utility suppliers are tackling is moving to sustainable energy, which data centers and the cloud for the sharing of data are clearly needed for. And this need is likely only going to increase.
Consequences of a Data Center Shortage
If a data center fails, for whatever reason, whether its power supply, overheating, or a natural disaster hits the area, it has various levels of backups to restore it to at least critical functionality. This means it will still have reserves, backup power supplies, and failsafe servers to keep critical applications running where it is powered.
But saying that, it’s possible for instance a hurricane comes in and poof, the whole thing is ripped to shreds, with the place being ripped into a million different directions. So even with all the precautions, procedures, and security measures, they can still completely fail and shut down. I mean even if you have all the world’s power supply going to that data center and it doesn’t have any servers, it ain’t going to do shit to host data on the cloud.
Although the above is possible, but not a likely scenario because of the planning that goes into where to place and build a data center in the first place, the need for more data centers is a very real problem. As we mentioned with more and more data, that needs to be stored, shared, and uploaded from somewhere. Here are a few potential problems we might face if there becomes a data center shortage or we can’t find technology to create more innovative data storage techniques.
Downtime
Overloaded data centers may experience downtime, disrupting online services and transactions. This can lead to financial losses and damage a company’s reputation.
Data Security
Inadequate capacity can strain security measures, making data more vulnerable to breaches and cyberattacks.
Inefficiency
Overburdened data centers can become inefficient, leading to slower processing speeds, reduced productivity, and higher operational costs.
Economic Impact
A shortage of data center capacity can hinder economic growth, as businesses rely on digital infrastructure for operations, innovation, and competitiveness.
Digital Transformation
Businesses are embracing digital transformation, which involves migrating to cloud services, adopting IoT technologies, and analyzing big data. All these activities require more data center capacity.
E-commerce Growth
The surge in online shopping has led to an explosion in demand for e-commerce platforms and digital payment processing, all of which rely on data centers.
Remote Work
The shift to remote work during the COVID-19 pandemic has driven up demand for cloud-based collaboration tools and virtual private networks (VPNs), putting added pressure on data centers.
Emerging Technologies
Emerging technologies like artificial intelligence (AI), machine learning, and edge computing are data-intensive and depend on robust data center infrastructure.
Unstoppable Rise in Data Center Usage
Data centers are the unsung heroes of the digital age, enabling the functioning of businesses, governments, and our daily lives. However, their capacity is struggling to keep pace with the relentless surge in demand. A shortage of data center capacity could lead to downtime, security vulnerabilities, inefficiency, and economic setbacks.
As we humans, and I’m guilty of this too, seem to want more quicker and bigger we don’t always look at the problems this can cause. There are plenty of examples with the dot com crash, the 08 housing crash, and various others. And makes me think maybe this will be a factor in the next crash.
Ask yourself, how would you conduct business or go about day-to-day life if you had no connection to phones or computers? It would likely collapse economies as we are increasingly operating on data, cloud, and servers. It’s possible. And these metrics such as data created, used, and exchanged of all sorts from the examples given above, especially with the introduction of people actively using AI applications on a daily basis, there will likely be a need for more data centers on a finite earth.
But then again with the rate at which the space race is picking up with Elon’s SpaceX, NASA’s Artemis mission to the moon, Richard Bransons Virgin Galatic, and Jeff Bezos’s Blue Origin, maybe we will have a whole planet such as Pluto full of data centres.
Would love to know what you think or other areas to consider. Let me know in the comments!
