Why Data Centers Are Critical to Global Digitalization and Sustainability

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Around 25 years ago, data centers emerged as standalone sites to provide locations for critical IT equipment and for telco network connectivity (Internet Exchange Points).

In purely physical terms, data centers are the base layer of a stack of other equipment – i.e. a building shell fitted out with power generation, storage and distribution equipment, cooling kit, with rooms of metal racks for IT servers, storage, networking machines along with ancillary cables and monitoring systems all linked to a power grid and telecoms networks. 

From its beginnings as space, power and cooling to support the IT sector, the data center has evolved to become vital to national economic growth, defense, energy and sustainability.

Data centers require an ecosystem of players who invest, build, and operate digital infrastructure to provide positive economic impact over decades of operation. By delivering digital services, data centers also deliver ongoing economic benefits beyond the already substantial benefits of initial construction, expansion and modernization projects.

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Viewed in infrastructure investment terms, a medium to large data center is a 25 to 30 year capital asset. It is measured in Mega Watts (MW) of power capacity. To design, build and deploy each MW of capacity requires an investment of US $8m- $12m (£6m-£10m).

This spans construction, engineering, manufacturing and equipment. Traditionally a 20-40MW data center could be considered large. Today, thanks to AI, data centers with 100MW, 500MW and even 1000MW (1GW) of capacity are being planned and built.

Many people remain unfamiliar with the sector and what a data center is and what it does. This has led to some of the myths that have grown up around developments.

There are many aspects to a data center such as what a data center does – how data center enabled digital services transform national, regional and local economies with measurable environmental and economic value.

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Serverfarm's HOU2 facility in Houston.

The data center sector ecosystem spans AI, apps, communication networks, IT, IoT, power systems, renewable energy infrastructure investment and sustainable construction. From large hyperscale and commercial data centers to edge facilities, data centers are critical hubs for running a modern, connected economy.

They generate returns for operating companies, they drive new digital business start ups and provide high value jobs in areas such as engineering and in the in the IP-based knowledge economy.

Every advanced and emerging economy is developing an integrated data center strategy that encompasses AI, Energy Transition, Electrification and Digitalization.

Data centers are a vital part of a nation’s critical infrastructure and countries who provide a favorable planning environment for developments will have an advantage.

As demonstrated by its recent Houston data center acquisitions, Serverfarm will continue to invest as it seeks opportunities to create modern mission critical facilities in underserved markets and to help countries grow their national critical infrastructure.

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