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Whether we’re watching a live video stream of a corporate update from our desks, managing a corporate photo database while flexi-working or settling down at home to watch the latest episode of that must-see series, we’re consuming more online data than ever before.

By 2020, Cisco estimates that annual global internet traffic will pass the zettabyte threshold, or more than 931 billion gigabytes. By Cisco’s math, that is the gigabyte equivalent of every movie ever made crossing the global internet every two minutes, or 58 million DVDs per hour.

For consumers, that means an estimated 9.6 billion fixed residential devices and connections, including 1.4 billion web-enabled TVs, by 2020. Businesses will have an estimated 6.9 billion devices and connections, including fixed and mobile devices, along with machine-to-machine connections.

All of these projected figures are creating opportunities for data centers. “The public’s obsession with online streaming and binge-watching is just one of the factors helping the data center industry flourish worldwide,” says Bo Bond, Managing Director and Data Center Solutions Co-Lead, JLL. “Massive movement of data from private corporate servers to cloud-based solutions and a growing corporate thirst for Internet of Things (IoT) initiatives are pushing corporate demand, too.”

Online content drives consumer demand

With an average of 3.5 devices per person, U.S. consumers are increasingly heavy users of online data. The popularity of streaming audio and video services accounted for over 70 percent of North American downstream traffic in the peak evening hours on fixed access networks in 2015.

Streaming is popular on mobile devices too, accounting for over 40 percent of the downstream bytes on mobile networks. While social media networks generate less data than streaming content services, Facebook and Twitter have added to the bandwidth load by supporting video, too.

Business data usage is also on the rise. Major cloud services providers are attracting more corporate users to adopt cloud-based services rather than hosting their data and applications in-house. To meet demand, major providers expect to triple their infrastructure by 2020, according to JLL’s most recent Data Center Outlook.

The right location for modern data needs

As data usage increases, more organizations are seeking sophisticated data center capabilities from their third-party data center providers. Finding the right space has become more complicated than the simple renewal negotiations of yesteryear.

“A new lease represents an opportunity for a data center user to capitalize on new technologies and optimize their data center footprints to reduce costs while increasing capacity,” says Bond. “Many companies are rethinking their IT infrastructures to create an efficient strategy for the future.”

One major driver of business demand for data center space is the growing adoption of Internet of Things (IoT) devices. In the workplace, “smart” IoT devices can be used for a wide range of purposes, from automatically managing heating and cooling systems to lighting office space according to amount of natural light available.

U.S. companies are expected to increase their investments in smart office devices by 33 percent over the next 12 months, and 71 percent are already actively gathering data for IoT initiatives, according to 451 Research’s latest Voice of the Enterprise: Internet of Things (IoT) Organizational Dynamics survey.

Some companies are adopting machine learning and artificial intelligence applications to analyze the large data sets from IoT devices, creating a need for high-capacity data centers. In addition, companies that provide content or internet-based services are looking to expand their reach to the many potential users who live, work and play outside the major cities. They need new, strategically placed data centers to enable this growth.

Meeting future technology needs

Amid the rising demand to deliver more facilities in “edge” markets, mergers between data companies are becoming common. These may rapidly add capacity, but they can also further complicate the landscape for users taking the long view of their IT infrastructure strategies.

“The data center industry’s top players are better positioned for future success than new or emerging players,” observes Bond. “Corporate users are now less likely to trust newcomers in the data center field because they are looking for hyperscale centers and faster, better technology capabilities.”

Yet, with the appetite for online data only going in the upward direction, data centers need to take a proactive approach. “User demand for smart data center solutions will only continue to heat up, with operators feeling the pressure to deliver more quality, faster and more flexibly than ever,” says Jon Meisel, Managing Director and Data Center Solutions Market Director, JLL. “Smart maneuvering will be necessary for users and operators alike to flourish in the coming months.”

About JLL Real Views

Real Views is a news site from JLL that features stories exploring the world of real estate and its impact on the wider business world. Our authors and contributors, from within and outside of JLL, provide expert insights that create stimulating conversations to help you make informed decisions.

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