Also, since the major cloud providers are always working to remain competitive, they keep their cloud services updated to support the latest computing needs. Those needs are evolving quickly as machine learning and quantum computing technologies mature. Developing and launching a large language model, for example, requires high-performance hardware and a robust software stack. For most businesses, it is vastly cheaper and easier to access these from the cloud vs. building a privately owned facility.
Data center trends
Grand View Research has projected that the data center market will increase at a compound annual growth rate (CAGR) of 10.9% between 2023 and 2030. The ongoing increase in digital and online activities is a primary growth driver. As businesses and consumers increase their online activities, demand also rises for scalability and efficiency in data storage, compute resources, and cybersecurity protocols.
There are growth constraints for data centers, however. One that's significant is the related limitations of space and power. Larger data centers can be space- and cost-efficient, but they generate more heat, so they require more power to cool. That raises operational costs and can leave less power available for computing.
Facility operators can ease the space-power conflict by building in cool climates and making greater use of renewable energy sources. Technology provider Juniper Networks (NYSE:JNPR) predicts that data centers will increasingly implement solar, wind, and hydropower as well as low-power cooling methods like liquid immersion.
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