Data centre investments reach record high in 2017

Companies have spent more than $18.2 billion on data centres during 2017, according to a new report from real estate research firm CBRE. The market is seeing exceptional growth as digital transformation strategies take hold and companies from all industries learn to embrace the cloud.

As the number of cloud services grows, more data centres will be required to enable the trend. Our demand for data and online services is growing as next-generation devices and services come online. Technologies such as mobile payments, video streaming, connected cars and IoT all require new data centres capable of providing the bandwidth to support billions or even trillions of Internet-linked objects.

Separately, Cushman & Wakefield said data centre growth could reach double digits next year in a Forbes report. Revenue growth might be as high as 14 percent a year each year to 2022 as operators reap the profits from early investment.

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Those firms which already own next-gen cloud platforms are positioned to be the first to benefit from the boom. As companies scout out providers to host their digital projects, operations which can already offer modern infrastructure could see substantial profits.

The industry focus is currently on expanding and upgrading existing datacentre sites. Few operators want to build costly new facilities when older ones can be retrofitted with newer tech first. This keeps the return on investment high while ensuring the operator can offer an efficient service that can be scaled to meet the needs of cloud applications.

More datacentres will inevitably be required down the line though. CBRE said there’s already evidence that investors are becoming more accepting of speculative development, a product of the trend towards digital transformation.

Stakeholders are now able to visualise the value of cloud applications in a way that hasn’t previously been possible. As demand for AI, data analytics and Internet streaming balloons, early investors are now realising the value of the infrastructure they own. Although there are ongoing costs, such as the need for regular maintenance and hardware upgrades, the number of customers that can be served from one facility is so high that profits are likely to soar.

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