The data centre market is reinventing itself – the rest of the built environment should take note

Data centres have had their fair share of challenges in recent years. The sector has navigated everything from global supply chain issues to ongoing power shortages. Yet, against the odds, it continues to expand.

Hyperscale data centre capex is predicted to grow by 28% this year, great news for the data centre supply chain. But, as revealed in Soben’s recent Data Centre Trends report, the disruption shows no sign of abating.

We expect the sector to respond with its trademark resilience, dynamism and innovation – providing valuable lessons to the rest of the built environment.

We’re currently witnessing a reshaping of the data centre market. Hyperscalers, faced with challenging market conditions, are reviewing their strategies, with many shifting to colocation providers. There has also been a massive shift in power and data capacity requirements, in part thanks to the rapid rise of Artificial Intelligence (AI). The sudden proliferation of tools such as ChatGPT and Microsoft 365 Copilot mean 100MW+ projects are becoming the norm.

Escalating demands for computing capacity means increased power requirements. Relative power costs and availability will continue to reshape development this year, with traditional data centre heartlands losing out to new markets. The good news is that rising power prices will accelerate the transition to greener data centres. In Europe, Frankfurt, London, Amsterdam and Paris (FLAP) are being challenged by new locations with strong supplies of renewable energy like Madrid and Barcelona.

The growing availability of green power is already leading to innovative new strategies, with a trend towards integration with the power grid. For example, there is a data centre in Dublin where backup lithium-ion batteries are soon to be connected to the grid to supply storage for energy generated through renewables. More homes than ever will be heated by waste heat from data centres as district heating schemes across the world get plumbed in. The data centre heating market is forecast to grow to over $2.5bn by 2025.

With net zero deadlines looming, the larger players are already advancing programmes to reduce the embodied carbon of their builds. Initial moves have seen companies requesting Environmental Product Declarations (EPD) from manufacturers, tracking embodied carbon emissions through design and construction and working to establish baselines from which savings can be made.

The sector has had its fair share of bad press, with perceptions of power-hungry data centres taking resources from local communities. So, communication is key. With the threat of increasing regulation, all parties will work even harder this year to explain the value of data centres and the sector’s efforts to improve energy and water efficiency.

One organisation leading the way is UK college, UTC Heathrow. Recognising the ongoing skills shortage in the data centre sector, their award-winning Digital Futures programme is designed to inspire the next generation of industry talent – working with a host of high-profile industry partners to inspire young students and train them in the skills they need to build a fulfilling career in the sector.

Many of the challenges facing data centre operators are the same ones facing the built environment generally, only for this sector they are intensified: new approaches to supply chains, how to sustainably switch to renewable energy, the fight to conserve water, reducing carbon footprints, labour and skills shortages and working with communities not against them.

We are already seeing significant progress by the leading players as they invest in finding ways to deal with multiple issues, with their work set to have a far wider impact on construction and beyond. One trend that continues is the dynamism of this sector – something we can all learn from.

Read more about the top ten trends shaping the global data centre market at www.sobencc.com/DCTrends2023