Industry executives and experts share their predictions for 2023.  Read them in this 15th annual VMblog.com series exclusive.

Data Center Site Selection, Colocation and The Future of Electricity

By John Ford, Vice President of Leasing for Sabey Data Centers and General Manager of SDC Seattle

The data center is among the most critical facilities to our modern existence. Without it, the essential logistics that deliver our most basic necessities would grind to a halt. It continually evolves to keep pace with society's constantly changing demands. It has transformed dramatically over the last two decades in response to new design requirements, innovations, and security risks. Analyzing its past trends helps us make well-informed predictions for the upcoming year.

Data Center Site Selection: A Shift from Metropolitan to Rural

Increasingly, the colocation industry is shifting away from "NFL cities" toward more rural areas such as Eastern Washington State and Upstate New York. While Edge facilities will continue to deliver low-latency content in major metropolitan areas, data centers are moving toward more abundant and cleaner electricity sources. This trend aligns with another: major companies opening secondary headquarters or moving entirely to secondary and tertiary cities for cost and quality of life reasons. Tax benefits, land availability, and a diverse talent pool eager to leave city life behind provide further incentives.

Colocation is Not Slowing Down

Workforce reduction in Big Tech gets a lot of loud press. Less often covered is the story of these employees snatched up quickly by companies in other industries or that tech growth continues unabated, despite layoffs. As data production accelerates, on the order of multiple Libraries of Congress produced daily, so does the demand for colocation data center space. However, only a portion of this production is due to sharing TikTok vids and our extensive, personal archives of family photos. Every industry is also on a relentless march toward data-hungry digitization.

Uber in the Sky

A technological slowdown is never in the forecast, and breakthroughs always loom on the horizon. Your medical history will be stored on a chip inserted under your skin; a pilotless, electric, ride-sharing quadcopter will deliver you to a restaurant for date night; your kids will attend college courses with a virtual reality headset and break to have lunch with you. These are just some practical, everyday improvements that will take shape in the next few years, without considering less obvious-but no less critical-benefits that artificial intelligence will bring to life behind the scenes. As the rate of technological advancement increases, the data center industry will grow and evolve alongside. What a fantastic time to work in technology!

The Future of Electricity

A transition away from fossil fuels and toward renewable energy is this generation's biggest dream and most daunting challenge. As new technologies like electric vehicles drive consumer usage to new heights, data centers are the energy-intensive infrastructure behind all modern technology, with a particular interest in clean, plentiful electricity. Delivering reliable electricity to the right place at the right time is critical, but current sustainable energy sources are intermittent and inefficient. Fusion may be on the horizon, but only local nuclear power options can meet the skyrocketing demand for clean energy as businesses and governments set ambitious carbon elimination goals.

The outlook for the data center industry holds the same constants it always has: changes, challenges, and excitement. As with every year, 2023 will see unprecedented innovation and technological growth. Data demand from AI, electric cars, and digitizing industries, coupled with the changes in the price and availability of electricity, will make it harder than ever before for colocation data center providers to compete. Opportunities abound, however, for providers that can adapt quickly enough!

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ABOUT THE AUTHOR

John Ford is a Vice President of Leasing for Sabey Data Centers and General Manager of SDC Seattle. A telecommunication professional with 30 years of experience in technical sales and marketing, data center design, and executive management for enterprise customers and data carriers, Ford joined Sabey in 2004. Ford is an active member of the Uptime Network Institute, AFCOM Western Washington chapter, and 7×24 Exchange.