5G and AI to drive data centre market growth in 2020



Credit: Qualcomm

Digital transformation took leaps and bounds across a number of areas and industries in 2019 – and the data centre market was no exception.

According to Gartner, Australia is expected to spend $99.6 billion on IT products and services in 2020, of which $3.1 billion will go towards data centre systems, presenting great opportunity for the nation to evolve and innovate in the space. Under increasing pressure to stay relevant and keep up with rapidly advancing technologies, data centre providers saw a need to transform and prepare for what’s to come.  

As we kick off 2020, the outcomes of the adoption of both newer and more mature technologies will start to take shape in the data centre. Specifically, we’ll see 5G drive an increase in demand for edge computing, while Artificial Intelligence (AI) will heighten deployment of new services in this market for both the end user and internal employees.  

With that, here are our top three predictions for the Australian data centre market in 2020.  

2020 will see the rise of edge computing thanks to the promise of 5G  

In 2020, the first applications using 5G’s super high speed, low latency, machine-to-machine communications will be introduced. These new offerings – like high-resolution cloud gaming, industrial IoT process control and onsite augmented reality guidance for workers – will demonstrate the value that 5G can unlock.  

5G adoption has been slow but steady, however 60 per cent of Australian businesses feel there is a need for 5G services to meet business needs above current 4G connectivity, according to Samsung Australia and Tech Research Asia.  

While we don’t expect 5G applications to be widely deployed this year, their potential will start reshaping industries, including the data centre market. For example, with 5G’s ability to provide latencies of less than 10 milliseconds, it will soon become much easier to deploy low-latency 5G applications – and 2020 will see the data centre preparing itself for their arrival.  

For low-latency applications to be successful, you need more than just 5G. You also need to process these applications’ data close to their sources using edge computing technologies like edge data centres. With edge computing you can avoid sending data back and forth from an edge device to a remote data centre. This significantly reduces latency and enables these new, low-latency 5G applications to reach their full potential.  

As a result, we’ll see more data centres move to edge computing in 2020 in order to bring these applications to fruition.  

AI will drive data centre adoption of new technologies

Credit: Supplied

The deployment of machine learning, deep learning and other artificial intelligence technologies is now mainstream, and they fuel many of the cloud services we use every day.  

While AI is still in its infancy in Australia, we expect to see the application of AI accelerate in this new decade. According to the government sponsored road map, AI is expected to form the basis of a new industry sector worth $315 billion to the Australian economy by 2028. Companies are increasingly using data to build and deploy AI models powering new services and generating business insights. If they hope to keep these companies happy, data centre operators need to respond, not just with faster networks and servers in their core, but also at the edge to enable the deployment of AI models closer to end-users.  

While this represents a challenge to data centre operators, it’s also an opportunity: if they’re smart about adopting the right networking, computing and edge data centre technologies to support AI, customers will come knocking on their doors. That is why in 2020, we expect data centre owners and operators to increasingly focus on how they can deliver the performance required by their customers for AI-enabled cloud services.  

Data centre operators will lean heavily on AI in 2020 to support workforce efficiency  

With the rise of co-location, the demand in Asia Pacific (APAC) remains high. The Asia-Pacific (APAC) region is predicted to witness strong growth in terms of data centre and hosting services revenue, are estimated to reach approx. $46 billion by 2023— which by then, Australia will account for about 22 percent of the overall market opportunity in APAC.  

Despite this growing demand, a tight labor market and the increasing needs to build edge computing centres away from Tier-1 locations will challenge data centre operators when it comes to recruiting and retaining the technical talents they want this new year.  

Given this, we can expect data centre operators to increase their use of new artificial intelligence and other smart technologies to maximise the productivity of their employees – for example, AR headsets that utilise AI technology to guide service technicians as they complete tasks. At the same time, data centre equipment providers will use predictive maintenance powered by AI to make their equipment work efficiently and to reduce costs, allowing data centre operators to do more with less human resources.  

Data centres operators that wait to adopt these new AI capabilities might experience slower growth as they fail to find or retain the talent they need to deliver all the services their customers demand in today’s highly competitive market.  

Preparing for the next phase of the data centre  

bridgestone-data-center-2017-100721272-orig.jpgCredit: Supplied

This year will see the first applications of advanced technologies like 5G start to find their way in the data centre, while the deployment of machine learning and other AI technologies will create new ways of learning and doing things. This means greater opportunity for data centre providers to grow and enhance their businesses.

While the benefits of these technologies may take at least a few years to come to fruition, data centre companies that incorporate them into their business strategy now will be the ones best positioned to reap the benefits down the road.  

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