Four Key Emerging Trends in Cloud Strategy and the Impact of AI on the Datacenter/Colocation Space

For growing organizations navigating the ever changing technology world, having a scalable technology infrastructure is critical.

Scalable and flexible tech stacks allow organizations to stay agile, improve processes and efficiencies, and improve the customer experience.

Global revenue from the enterprise colocation segment reached $8.1 billion in 2023 and is forecast to top $8.6 billion in 2024, with a five-year growth rate of 7.1% (Source: Structure Research and Avant Communications)

These trends highlight a strategic shift towards datacenter/colocation services and a hybrid cloud strategy to address performance, security, and cost concerns while accommodating the growing power and connectivity needs driven by AI and other advanced applications.

The emerging trends in cloud strategy include:

1. Repatriation: Some organizations are reversing their decision to move everything to the cloud due to high costs and performance issues. For example, 48% of businesses are migrating workloads out of major cloud providers like AWS, MS Azure, and Google Cloud Platform.
2. Post-COVID Corporate Real Estate Changes: The shift towards a remote workforce and reevaluation of corporate office space needs drive organizations to move their on-premises IT infrastructure to colocation facilities.
3. AI’s Impact on Colocation Space and Power Inventory: The increasing use of AI workloads drives up power density requirements in colocation facilities, with some customers requesting significantly more power per cabinet due to GPUs.
4. Increased Network Connectivity Requirements: There is a growing demand for enhanced connectivity to support businesses' evolving needs, particularly as they adopt more advanced technologies and services.

The impact of AI on data center/colocation space includes:

1. Increased Power Density Requirements: AI workloads, particularly those involving GPUs, drive up power density requirements in colocation facilities. Historically, enterprise customers required around 5kW per cabinet, but this has increased to 15-20kW per cabinet due to GPUs' power demands.
2. Higher Power Consumption: The use of GPUs, such as Nvidia H100, which can consume up to 300 watts each, and systems like Nvidia DGX H100, which can use up to 10.2kW, are significantly increasing the power consumption in colocation facilities.
3. Growing Demand for Datacenter/Colocation Services: The need for higher power densities and the inability to handle these requirements on-premises are leading more mid-market companies to move to colocation facilities.
4. Resource Availability and Pricing: The increasing power requirements consume more of the available power capacity within data centers, which can impact resource availability and lead to higher pricing in some local colocation markets.

Conclusion

Overall, AI is driving a significant increase in power and space requirements in colocation facilities, influencing both the demand for these services and the operational dynamics of data centers.

For more information, contact NetSharx Technology Partners: https://www.netsharx.com/Contact

Interested in a FREE Datacenter/Colocation analysis? Take our FREE Datacenter/Colocation Interactive Assessment HERE

About NetSharx Technology Partners:

NetSharx Technology Partners provides a platform, agnostic engineering, tools, and analysis for IT decision-making next-generation technologies. From complex cloud designs to global wide-area network deployments to the latest cybersecurity services,

NetSharx Technology Partners sets the industry standard in enabling its clients to make intelligent, data-driven decisions about services, technology, and cost-effective communications.

www.netsharx.com

TechFindr Webinar Series: Upcoming Event

Join us for a FREE Webinar: How AI is Impacting the Future of Cybersecurity

Generative AI technologies have had a transformative impact on organizations, helping to improve efficiency and reduce overhead. However, as reliance on these technologies rises, they come with complex cybersecurity challenges.

In this webinar, eSentire and Netsharx, will share their insights on:

• Cyber risks associated with using generative AI technologies
• How security leaders can use ChatGPT, and other similar tools, to strengthen their cybersecurity posture and build cyber resilience
• How security leaders can set up, deploy, and use LLM (large language model) gateways to protect your company's sensitive data and ensure regulatory compliance
• How security providers are applying generative AI tools to advanced threat detection and response to provide better security outcomes

Date: Thursday, October?10 Time:?10:00am - 11:00am CST Location:?Zoom Webinar

Register here: https://mdr.esentire.com/l/651833/2024-09-06/2rwtnv