2017 & Data Centers: An Outlook

In the upcoming year, the data center industry will be changing to deliver more data to consumers.  To deliver more data, the industry will turn to mergers and acquisitions as well as cloud data centers.  Data companies will also utilize reduced energy costs in the new year to achieve higher capacity goals.  However, the data center industry may face issues in the upcoming year despite their growth.  The change coming for the data center industry in the new year will benefit the industry and the consumer, though the risks related to the change pose threats to the delivery of data to consumers.

Mergers and acquisitions, M&A, are a major change for the data center industry in the upcoming year.  With the M&A, the industry will be able to find ways to combine assets and deliver more data to consumers.  The combination of assets would allow data center companies to realize higher gains, which may attract investors who will support further development.  As the mergers and acquisitions occur, the data center industry will continue to transform.

Cloud data centers is one way M&A will impact the landscape of the data center industry in 2017.  Currently, cloud providers, such as AWS, Microsoft, and Oracle, shape how businesses can utilize the cloud services.  Though only three major companies provide cloud services, businesses can acquire the services at a without major capital outputs.  The data center industry and its business consumers will both benefit from the changes related to cloud data centers in the upcoming year.

Lower energy costs could also be a welcomed change in the data center industry.  For data center companies, the reduced energy costs could allow them to offer more data.  In turn, the consumers will be able to add more value to their businesses by receiving more data.  The reduction of energy costs is also a welcomed change, since the demand for data in 2017 will likely be growing.

The expected changes in the data center industry for 2017 are met with certain risks.  Three major risks, including foreign exchange, increasing interest rates, and the M&A in the data center industry, could hinder the delivery of data.  Though M&A were highlighted as a positive change, pricing issues could still arise as companies combine assets.  The other two risks also pose threats to how the data center can operate in either domestic or international markets.  The risks related to the changes should be considered, therefore data companies can lower the impact of the risks if they occur.

The data center industry will experience changes in 2017.  From M&A to cloud data centers, the data companies will be searching for ways to deliver more data to consumers.  Reduced energy costs will be one opportunity for data companies to achieve their capacity goal and add value to consumers.  Though demand will be greater, risks still pose a threat to the delivery of data.  Moving forward into 2017, companies in the data center industry will be a force for data delivery despite the potential risks.

Major Points for 2017

• M&A are increasing the competition between companies in the data industry, such as Equinix and Digital Realty.
• Reduced energy costs could allow the data center industry to deliver more at a lower cost.
• Corporations will invest about 33 percent in smart office equipment in the next year.
• In 2014, the industry consumed about 70 billion kilowatt-hours of electricity.
• Data centers are expected to be built throughout the U.S., including Northern Virginia, during 2017.
• Risks for the data center industry in 2017 include foreign exchange, increasing interest rates, and M&A in the industry.