According to Turner & Townsend analysts, the rising costs of building new data centers and climate policy are the biggest obstacles to developing this market segment. But the survey published in the Data Center Cost Index Report shows that up to 95% of data center service providers believe 2022 will be better for them than 2021, and 70% believe that this market segment is virtually immune from recession.

The increase in demand for services is mainly due to the spread of corporate digitization and the growing popularity of the Internet of Things.

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According to Turner & Townsend analysts, one of the biggest challenges will be adapting existing IT infrastructure and data center facilities to new climate regulations. Despite high environmental awareness, only 40% of industry representatives believe that their data centers will be emission-free in the next five years.

At the same time, up to 50% of respondents believe that data center operators do not know how to effectively reduce carbon dioxide emissions.

Although there are initiatives to reduce CO2 emissions by data centers such as the Climate Neutral Data Center Charter, their impact on reality is limited, and marketing advertisements are sometimes difficult to verify.

Digital transformation dramatically increases the demand for disk space and computing power. Operators have made it a priority to respond to customer needs as quickly as possible. Energy efficiency and environmental issues fell into the background. From the point of view of the beneficiaries of data center services, especially those large ones who have issues with reducing CO2 emissions built into their strategies, more transparency is needed. So you can actually judge which operators are more energy efficient,” said Wojciech Stramski, CEO at Beyond.pl.

When it comes to building new facilities in the most popular locations to date, there are problems, because the demand for real estate outstrips supply, plus in many places there is a shortage of energy to run the facilities. This applies to Tokyo, Zurich and FLAPD (Frankfurt, London, Amsterdam, Paris, Dublin). For example, in Dublin, according to a 2019 report by the Irish Academy of Engineering, meeting the growing demand for data center services will require the expansion of power infrastructure. The cost of this was estimated at about 9 billion dollars.

The Japanese capital, Tokyo, is currently the most expensive in terms of data center maintenance costs, followed by Zurich.

The situation in the construction market presents an additional challenge. 87% of Turner & Townsend respondents say a shortage of materials is delaying the creation of new data centers. Therefore, analysts suggest that upgrading existing facilities and buildings will be more common, rather than investing in entirely new data centers.

The report’s authors also point out that higher costs increase interest in investing in cheaper developing markets.

More detailed information about the study can be found in the 2021 Online Data Center Cost Index Report.