The global data center market is under an unprecedented squeeze as we move into 2023.
On one hand, we have a long-term challenge surrounding the sustainability of the industry’s growth trajectory in essential hub markets. On the other, we have an acute short-term problem with energy prices in the colocation sector.
These issues combine to create an uncomfortable phase in the market right now.
There’s a remarkable sense of uncertainty in the data center sector right now.
Some of the biggest global markets have seen unprecedented disruption to data center development as regulators and utility companies attempt to work through critical issues surrounding the long-term sustainability of the industry.
At the same time, the war in Ukraine has fueled tremendous volatility in European wholesale power prices, bringing further stress to an industry that’s fundamentally dependent on vast amounts of power. Let’s unpack the current situation.
It is said that only three things are certain in life. The future of the global bandwidth market is not one of them.
Beyond persistent demand growth and price erosion—the two most predictable trends—operators will have to navigate the major uncertainties of an evolving sector.
According to our freshly updated Global Bandwidth Research Service, these key factors will impact the long-haul capacity market in the coming years.
The colocation data center sector is characterized by remarkable price stability—remarkable in that such external pressures as a global pandemic, geopolitical uncertainty, and regulatory restrictions have failed to dramatically sway prices in one direction or the other.
To be sure, there are sometimes short-term movements, but over the span of several years, collective rates shift only slowly from their baseline.
Let's delve into the key aspects of colocation pricing.
As we publish the latest update to our Data Center Research Service, the COVID-19 pandemic continues to turn the global marketplace on its head.
Network and data center services have never been more critical to connect a world in relative isolation. That's why we supplemented our 2020 data center site survey by asking global data center operators for their assessment of the pandemic's impact on their operations as of September 2020. (We shared some preliminary findings earlier this year.)
Here's the latest report.
In our research, we think a lot about the nature of interconnection.
And in our ongoing effort to gauge the impact of the COVID-19 pandemic on global networks, we wanted to highlight what’s happening in the nodes where interconnection takes place—data centers.
We spoke with experts across the market to get a sense of how they’re working through the crisis. They gave us insight on how the situation is affecting demand, operations, supply, and new construction.
Today we answer the burning question "what is peering and how does it work?"
What does the future hold for the global bandwidth market? The two most predictable trends are persistent demand growth and price erosion.
Beyond that, operators will have to navigate major uncertainties in continuing to move forward in an evolving sector. Here are a few of the key trends, among many, that will affect the long-haul capacity market in the coming years.
This is a brief service announcement for our colocation-inclined readers. As of today, our beloved Colocation Database is now the Data Center Research Service.
What do you get when you cross persistent demand growth and price erosion with shifts in demand sources and changes in network deployment strategies? You get sizable challenges for the wholesale telecom market, that's what.
Today we're examining a few of the key trends—including the headaches—that will affect the long-haul capacity market in the coming years.
