What will 2021 look like for the data centre sector?

What will 2021 look like for the data centre sector?

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The impact of the COVID-19 pandemic is likely to have an effect on the data centre industry throughout 2021, but there are also other drivers to consider. James Hart, CEO at BCS (Business Critical Solutions), takes a look at what 2021 and beyond might look like.

Sustainable power

Next year we are likely to see an increased focus on renewable energy. This is in part driven by the massive global players like Google who have joined Facebook, Apple and Microsoft in committing to put no excess carbon into the atmosphere. Facebook has also stated that it will become 100% supported by renewable energy and is committing to net-zero emissions for its entire ‘value chain’ by 2030, including its suppliers and users.

As a result, there will be greater impetus to secure alternative power sources such as wind and solar as well as the use of battery storage. There are some exciting innovations such as new hydrogen cell technology that are showing some early, promising results.

The UK may also need to consider a more holistic approach to optimise potential wasted resources such as the heat generated by data centres. The introduction of district heating systems have been successfully delivered in many metropolitan areas in mainland Europe. There is no doubt that the excessive heat generated by data centres could be put to good use as is seen in Amsterdam – which is to become the first Dutch city to have a data centre capable of warming local homes.

Smart Cities

By the end of 2021, every major city in the UK will have piloted 5G. 5G will move from concept to reality, bringing with it huge data capacity, high speeds and low latency. 5G will be essential for supporting the Smart City infrastructure of the future. Ranging from intelligent public transit systems, smart buildings and infrastructure, plus connected public safety platforms, are just some of the Smart City innovations that are in development. As a result, there will be an increase in the need for data centres in Edge locations. This will in turn fuel the need for the rapid deployment of data centres – modular, containerised and POD facilities.

Investment appeal

There is no doubt that the way companies operate has changed and that a degree of working from home is likely to continue for some businesses when the pandemic is over. This will be used to drive cost savings into businesses operations as many firms consider downsizing and their employees reap the benefits of a more flexible approach to the working day that facilitates an optimal work/life balance. This will mean a change in the investment profile for the commercial property sector which may consider a move into the more vibrant and profitable data centre sector. The value of data centres will increase as the value of data itself increases. High-value assets are part of the appeal as buildings and equipment can be secured against the asset combined with a sticky revenue stream, because data centre migration is a headache. However, history has shown that new entrants into the sector often face issues over market understanding and trust, so this move may not be as simple as it seems.

The cloud

There is no doubt that cloud will continue to dominate the sector, with hyperscalers that are designed to expand rapidly and host cloud services unlikely to slow down because of increased investment in public cloud services due to the pandemic. In fact, cloud will play a vital role in helping companies adapt to the ‘new normal’, enabling them to become more agile, responsive and adaptive than ever before.

The only real limitation is the decreasing talent pool in the sector which is set to get worse and there are real concerns that it will impact the sector’s ability to deliver the increasing demand.

The skills shortage in the industry has been an issue for over a decade, with the financial crash in 2008 leading to a lost generation of technical engineers which has been slow to recover. Recently, there have been some promising industry initiatives but many have been put on hold due to the pandemic. Ongoing uncertainty around this year’s A-level results, challenges for first-year university students and a decision by many organisations that taking on graduate trainees and/or apprentices is just not practical has effectively put us back to square one, (although at BCS we have forged ahead with our graduate and apprenticeship programme) and these decisions will severely impact the future.

The international market

Businesses continue to be faced with uncertainty over Brexit as the end of the transition period for leaving the European Union looms ever closer. What we do know is that there will be implications for many areas such as supply chains, imports and exports and employment that will affect the technology and data centre sectors.

The uncertainty around BREXIT has, at the very least, been unhelpful for the data centre sector and regardless of whether we have a ‘no deal’ or ‘some kind of a deal’, there are likely to be challenges ahead. Will there be an increase in costs for organisations purchasing equipment from mainland Europe? Probably. Will this lead to a move towards the UK becoming more self-sufficient and onshoring more if its manufacturing? I hope so.


In 2020, the COVID-19 pandemic produced few net-new technology and business developments, but it certainly accelerated many technology trends already in motion.

The last 12 months has shown how important the sector is and how dependant the world is on this invisible infrastructure. According to a recent report from Gartner, COVID-19 caused a 10% dip in worldwide data centre investment, but a 6% increase should come in 2021 and growth will continue through 2024. This is great news for the sector and once again highlights our resilience and determination.

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