Data Centers: Empowering Innovation And Our Digital World

How well do people really understand what data centers do?

We know data centers house a lot of servers, use significant electrical power and require real estate in specific locations. And for anyone who believes data centers are the endpoints rather than facilitators in a diagram of our global digital infrastructure, it’s easy to see why they might believe data centers amplify many unwelcome aspects of the digital economy.

But, to put it as directly as possible, data centers are the starting point for that infrastructure. They bring focus to disparate, competitive and fast-moving solution providers who all need access to the resources that data centers provide to business customers worldwide: security, power, networking and physical space for processing massive amounts of information.

In 2004, the New York Times said about a long-running ad campaign by chemical company BASF: “In almost every brand awareness test, its 14-year-old North American commercial tagline—'We don't make a lot of the products you buy. We make a lot of the products you buy better’'—ranks among the most recognized corporate slogans.” In many ways, that slogan can be applied to data center providers. We don’t operate the cloud—we enable it. We don’t create AI models—we power them. We don’t create streaming content—we accelerate it.

Let's examine and test assumptions made about data centers and identify how they make much of our digital world possible.

Challenge: Data Centers Use Too Much Electricity

Globally, UN’s International Energy Agency estimates data centers use 1% to 2% of world electricity annually. As a percentage, this usage remained surprisingly stable even as storage, capacity and compute power grew by multiples ranging from 25 times to 300 times in the same timeframe.

A data center needs power primarily for high-quality cooling equipment and building services, including lights, security systems and day-to-day services. In most cases, servers, storage, routers and IT-based equipment that customers house in data centers consume most of the power supplied to the building. And for modern economies, this equipment consumes the same amounts of electricity no matter where it's plugged in. With improved design and operational efficiency, today’s data centers can deliver more while using less power.

Challenge: Data Centers Are Too Big

It's true, in many cases, data centers are being built to a larger scale. This can raise concerns across municipalities about the effects on power availability, water supply, emissions, noise and traffic. In short, they're concerned about sustainability.

Most established data center providers share these concerns, although from a different perspective. In many markets, data centers are at the vanguard of green building technology, from 24/7 Carbon-Free Energy to innovative water, cooling and waste processing solutions. Committed data center providers publish annual sustainability reports tracking clean energy, potable water, recycling waste diverted away from landfills, CO2 emissions and power utilization efficiency (PUE), which measures the percentage of power used by the data center itself versus power used by IT-based equipment.

One key trend these reports illustrate is that larger data centers, serving AI, the cloud, content and commerce customers, can operate more efficiently while simultaneously supporting dramatically more services for businesses and consumers versus building multiple, smaller facilities that each require their own discrete power, water and other resources.

Advantage: Data Centers Enable Modern Economies

A recent study prepared for the Dutch Ministry of Economic Affairs and Climate Policy measured the value of data centers as part of the overall digital infrastructure segment of the country’s economy. The results may not match results in every economy, but they're worth noting related to data center impacts.

According to the report, more than 80% of the Dutch economy depends on its digital infrastructure, and the same is true for more than 80% of the nation’s workforce. The study makes it clear that this dependence doesn't mean that 80% of the Dutch economy is created via digital infrastructure and, in fact, digital infrastructure as a discreet industry only accounts for a little over 9% of their economy. Many factors are considered, including productivity, speed and reliance on the cloud and internet services in many facets of business today.

Just as airports, shipping docks and train stations serve as logistical hubs for manufacturing, agriculture, business, retail and more, data centers serve as linchpins of the world’s digital infrastructure and economy and are catalysts for products and services used by people, businesses and devices worldwide.

Advantage: Making Digital Products And Services Better

Applying the BASF tagline to data centers is an apt comparison. Data centers don’t create the products and services used by billions worldwide, but they make them faster, universal and more powerful.

Cloud providers offer services ranging from simple apps on our phones to accelerating complex, real-time financial transactions. Machine learning for AI is less dependent on proximity to end users but can often require high-performance computing that can't be performed effectively or efficiently without being empowered with significant data center capacity.

Today, people everywhere are accustomed to accessing oceans of content, and, with their storage, security, connectivity and capacity, data centers make this access possible, all delivered via streaming servers, cloud services, web browsers or phone apps. So, whether it’s hospitals using the cloud to improve care for patients, pharmaceutical firms relying on the cloud and AI for R&D to bring new treatments to market as we saw during Covid-19, local municipalities using IoT to reduce traffic and pollution or airlines using the cloud to reduce emissions by scheduling more efficiently, data centers serve as a starting point for all the ways the cloud and AI are optimizing operations and expanding what’s possible.