Beyond 2023
Happy New Year and welcome to 2024!
After what felt like the 24th month of 2023, I enjoyed some much-needed downtime with my family, and starting the new year refreshed where I expect 2024 to be a big year across the board - and especially for the industries that I am fortunate to work across.
In looking back over 2023, and pondering the next 12 months, common themes emerged, and it became apparent that a 2024 kickoff newsletter was brewing.
As regulars to the newsletter may have noticed, I like to have some fun with my articles, and often dip my toe into the nostalgia of the 80's/90's. If you are unfamiliar, many Australian GenXer's grew up with a science series called "Beyond 2000".
As a kid, and young teenager, I loved technology, and this TV show was a window into the future.
I mean, who doesn't want to be pushed on a swing by a C3PO-style droid.
We saw lots of things post-2000, but have we seen "Rescue By Computer" yet? Maybe that is what we are expecting AI to do...?
Moving on, here are my expectations for 2024 and beyond...
Advancements in Immersion Cooling Technology
The data center industry will see a watershed moment for immersion cooling technology. POCs and small-scale deployments will be accompanied by more intentional and at-scale investments, consolidating players and forcing broader collaborations. Larger holdouts across the data center, semiconductor, and network industries will slowly join the line of early adopters to make their systems, and importantly, warranties, compatible with this new way of operating.
Whilst 2023 was the year direct-to-chip cooling hit mainstream, I expect significant growth in immersion in 2024, and expect 2025 to be the inflection point for adoption.
Intel: ‘The Time is Now’ for Immersion Cooling | Data Center Frontier
Data Center Sustainability Initiatives
Sustainability remains a key focus for data centers in 2024. Industry leaders are implementing a variety of initiatives to reduce their environmental impact. This includes adopting renewable energy sources, optimizing power usage effectiveness (PUE), and investing in eco-friendly infrastructure. Furthermore, data centers will actively explore waste heat recovery solutions to repurpose excess heat for external applications, contributing to a more circular economy.
Unfortunately, I expect to some significant walking back of self-promoting sustainability targets and initiatives, as metrics continue to show that they're definitely not on target to achieving their goals. Don't believe me, look at the coverage from COP28.
Your Quick Guide To The Outcomes Of COP28 (forbes.com)
Edge Computing Expansion
The proliferation of edge computing continues to reshape data center strategies. I expect the demand for AI will continue to define the edge. With stranded power and supply constraints, distressed commercial real estate, and low-latency inferencing requirements, it really is a perfect storm. We will observe a significant expansion of edge computing infrastructure to support growing demand for AI and low-latency applications.
Smaller players are already strategically deploying smaller, decentralized facilities closer to end-users to enhance performance for applications like IoT, augmented reality, and autonomous systems.
Security Measures in Data Centers
Cybersecurity in data centers is evolving to address increasingly sophisticated threats. In 2024, there is a heightened emphasis on implementing artificial intelligence and machine learning algorithms for predictive threat analysis and detection. Additionally, the industry is adopting a zero-trust security model, ensuring that each user and device is continuously authenticated and authorized, even within the confines of the data center.
Given the high-demand and limited supply for the hardware, and its incredible processing power at scale, it's never been more important to secure your assets - tens of thousands of GPUs are quite the honey pot for bad actors.
Integration of AI in Data Center Operations
The integration of artificial intelligence (AI) in data center operations is a transformative trend. AI is being employed to optimize resource allocation, predict equipment failures through predictive maintenance, and automate routine tasks. This not only enhances operational efficiency but also contributes to cost savings and improved overall performance of data centers.
This is already happening in observability tooling and security systems, however, expect to see far more integration of AI in planning tools, capacity management, and BMS systems for example.
Repatriation of Data and Hybrid Cloud
Hybrid cloud solutions will continue to grow in 2024, as organizations seek a balance between on-premises and cloud-based infrastructure. This trend is driven by the need for flexibility, scalability, and data sovereignty. Hybrid cloud architectures enable seamless data movement between private and public clouds, providing enterprises with the agility to adapt to changing business requirements while maintaining control over sensitive data.
There have been many examples shared by businesses saving lots of money by bringing data back, from previously being 'All In" with a large hyperscaler, or even from over leveraging microservices, back to a monolithic solution.
Twitter previously spent $100M yearly with AWS - X celebrates 60% savings from cloud exit (hey.com)
Amazon Prime Video goes back to the future, from microservices to monolith - Prime Video service dumps microservices, cuts AWS bill 90% (thestack.technology)
Starlink + Edge
The rollout of 5G and Starlink technology is impacting data centers by driving the need for low-latency, high-throughput infrastructure. Data centers are adapting to support the increased connectivity demands, with a focus on edge computing nodes to reduce latency. This synergy between wireless networks and data centers is crucial for enabling applications such as autonomous vehicles, augmented reality, numerous military applications, and real-time analytics.
Armada is one such example, emerging from stealth late last year, it's the intersection of ruggedized, low-latency edge compute, leveraging Starlink for communications.
There are dozens of startups looking to deploy advanced cooling technologies in edge formats, and I'm looking forward to seeing more emerge in the coming months.
Regulatory Compliance and Data Centers
This is big.
The regulatory landscape for data centers is evolving, with new standards and compliance requirements coming into play. In 2024, industry leaders are proactively addressing these changes by implementing robust governance frameworks, ensuring data sovereignty, and enhancing data protection measures. This includes adherence to international standards such as GDPR and regional regulations governing data storage and processing.
Data sovereignty, privacy, and sustainability requirements won't just shape data center strategies, they will define them.
If this doesn't hit big in 2024, it will hit even bigger in 2025.
Global Data Center Market
The global data center market will experience dynamic shifts in 2024. Explosive growth of smaller, decentralized edge deployments, with continued constraints at the hyperscale level given their lengthy time-to-live processes, and energy supply issues.
Market consolidation will be prevalent, especially as capital markets improve, interest rates reduce, and IPO's ramp up - mergers and acquisitions will reshape the competitive landscape. Additionally, new players, including existing hyperscale cloud providers, are influencing market dynamics, leading to increased competition and innovation.
Beyond 2024?
What will the following next year hold for data centers, AI, sustainability and next-gen cooling designs? Feel free to engage - I'd love to chat, collaborate, and develop strategies on tackling what is an incredibly dynamic environment and market.