Data Centers in 2023: Breaking Ground and Pushing Boundaries on All Fronts

As 2023 draws to a close, we look back on another eventful year for the global data center industry.

Christopher Tozzi, Technology Analyst

December 27, 2023

5 Min Read
Data Centers in 2023: Breaking Ground and Pushing Boundaries on All Fronts

If there was an overarching theme within the data center industry during 2023, it was this: Data centers reached new frontiers, both literally and figuratively.

On the literal, bricks-and-mortar front, 2023 saw the expansion of data centers to parts of the world that have not traditionally been concentrations of data center infrastructure. Figuratively, data center operators continued to push boundaries in areas like sustainability, cybersecurity, and AI.

That, at least, is a high-level summary of what 2023 meant for data centers. Keep reading for the details as we unpack key developments and trends during the past year in the world of data centers.

More Data Center Investments in the Developing World

Let's start with the literal changes to data center frontiers that played out over the past year: The growth of data centers in the developing world, which has not traditionally been a center of investment by the industry.

There were signs over the past year that this is changing, such as the announcement of a $296 million investment in African technology assets by Convergence Partners and the expansion of Teraco data centers (which are owned by Digital Realty).

This trend isn't entirely new. Developing regions have seen increased data center investments in other recent years. But 2023 showed us that the trend is likely to be sustained as data center operators look to place facilities closer to populations that have not traditionally benefited from having data centers nearby.

Related:US Energy Experts to Present Latest Insights at Data Center World 2024

AI's Impact on Data Centers

AI was the story of 2023 across all segments of the tech industry, not just data centers. But for data centers in particular, the AI boom spawned a need for new management strategies, while also driving demand for AI-centric hardware, such as GPU-enabled servers, in colocation facilities that offer infrastructure as a service.Over the longer term, the deployment of such hardware in data centers is likely to increase the power consumption of facilities, too, leading to new challenges in the realm of sustainability.


Continued Sustainability Investments for Data Centers

Speaking of sustainability, 2023 witnessed some notable developments on that front, too, for the data center industry.

Most, like the COOLERCHIPS program (a US Department of Energy initiative aimed at improving data center cooling technology) or the use of intelligent software to improve data center energy efficiency, are not totally new ideas. Instead, they reflect efforts to operationalize data center sustainability concepts that have been widespread for at least a few years.

Related:Industry Impact: Celebrating IT's Milestones and Achievements This Year

At the same time, some folks continued to pursue ideas for improving data center sustainability (such as flying data centers) that remain beyond the realm of feasibility currently, but could become key to better sustainability outcomes perhaps a decade from now.

Fresh Cybersecurity Challenges

All of the cybersecurity threats that have dominated headlines in recent years, such as ransomware attacks, remained a real concern for anyone who operates a data center in 2023. However, the past year or so also witnessed a surge in more novel types of attacks – such as those that target APIs and software supply chain attacks.

None of these cybersecurity risks affect data centers in a special way; they pose a threat to IT resources deployed in any type of facility. Still, they mean that anyone who runs or uses a data center must now prepare to handle an even broader array of cybersecurity challenges than in past years.

Bonus: What Didn't Happen in Data Centers in 2023

Now that we've summarized key data center trends of 2023, let's briefly note some things that didn't happen this past year:

  • Generative AI didn't take over: There has been tons of talk about the opportunities that generative AI creates in data centers and virtually everywhere else. But so far, very few practical solutions have appeared that leverage generative AI for data center operations.

  • Data centers didn't become fully automated: For years, the industry has talked about the idea of automating most or even all aspects of data center operations. That didn't happen in 2023. There's still a role – or many roles – for humans to play in most facilities.

  • Next-gen cooling technologies didn't see massive adoption: While it's likely that some data centers added innovative cooling technologies, like immersion, in 2023, these technologies remain expensive and out of reach for many facilities.

  • The public cloud didn't kill private data centers: We've long been told that moving workloads to the public cloud is simpler and more cost-effective than deploying them in a private data center or colocation facility. But as of 2023, demand for data center space remains strong, and there's no reason to think the public cloud will fully take over anytime soon.

Looking Ahead to 2024

Overall, 2023 saw some interesting developments or expansions of existing trends in the data center world. But it would be a stretch to say that anything revolutionary happened – which is a good thing in the sense that it reflects the maturity and stability of the industry. It's hard to disrupt something that has worked as well for as long as data centers.

About the Author(s)

Christopher Tozzi

Technology Analyst, Fixate.IO

Christopher Tozzi is a technology analyst with subject matter expertise in cloud computing, application development, open source software, virtualization, containers and more. He also lectures at a major university in the Albany, New York, area. His book, “For Fun and Profit: A History of the Free and Open Source Software Revolution,” was published by MIT Press.

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