Demand for Digital Infrastructure Drives Data Centre Uptake

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20 April 2023

A research paper from JLL shows that the mass adoption of cloud computing and AI is driving growth in the data centre industry.

According to JLL’s Global Data Centre Outlook, the hyperscale market (facilities that manage very large data processing and storage needs), is expected to grow 20 per cent from 2021 to 2026, as more major tech companies look to meet surging demand for data processing and storage requirements.

With 314 new hyperscale sites in development globally today, that number is expected to surpass 1,000 by the end of 2024 – up from around 500 sites just five years ago.

Sustainability, energy efficiency and environmental impacts are the top priorities for data centre investors. Legislation and self-regulatory initiatives in Europe, including the Corporate Sustainability Reporting Directive (CSRD) and the Climate Neutral Data Centre Pact (CNDCP), are setting the standard to mitigate the climate impact of the industry in the region.

Skills Shortage Biggest Challenge Facing the Tech Sector

However, the sector requires technical skill sets to both build and staff these facilities, making it difficult to both own and operate a data centre. Lack of available talent is the biggest challenge facing the technology sector as a whole in EMEA, according to the global tech trends and strategies report from Equinix.

Tom Glover, Head of Data Centre Transactions EMEA at JLL said: “2022 was a record year for take-up and new data centre supply added to the European market. We saw 300MW of new supply added to the Tier I markets – a 50 per cent increase year-on-year, contributing to the market size of FLAP-D to reach 2,477MW, almost double in size from the end of 2016. As the reliance on digital technology increases, the data centre industry will continue to experience impressive growth.”

Jonathan Kinsey, Head of Data Centre Services EMEA at JLL added: “With corporations and governments alike focusing on ramping up efforts to close the gap between environmental commitments and action in the race to net-zero, the data centre industry is also facing increased pressure for more transparency of climate mitigation efforts and has been working towards more sustainable operations.

“Those who react the fastest and improve efficiency with both energy and water usage stand to benefit as environmental impacts remain top-of-mind for most leading companies.”

Picture: a photograph of the interior of a server room in a data centre. Image Credit: Adobe Stock

Article written by Ella Tansley | Published 20 April 2023

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