The lay of the land for data centers in 2022

In January, the Yondr team took over the Pacific Telecommunications Council (PTC) Conference in Honolulu, Hawaii to discuss industry trends with industry leaders. During the series of conversations we grabbed a brief sit-down with Ed Galvin, DC Byte’s Founder and CEO, to get his predictions for 2022.

On the move? Listen to the podcast here or read the three-minute highlights below.

A change in perception
We’ve seen a fundamental shift in the perception of data centers over the last few years.

Data centers used to be characterised as an alternative asset class, which I always thought was rather unfair considering how much the modern world relies on the industry to function.

This perception was probably due to the fact that returns were not particularly impressive in places such as offices buildings or retail.

Now, however, the broad consensus is that data centers should be classed as infrastructure. ‘Digital infrastructure’ is the default phrase in our industry, but it’s actually even more fundamental than that.

Perhaps most importantly, this perception is now held by the more traditional funds, which bodes well for the future. And I think the conception of data centers as integral infrastructure will crystallise even more as the year progresses.

Smashed records & bold ideas
The industry continues to grow at an astonishing rate. And every time we see a purchase that looks unsurpassable, it gets obliterated within the year.

It’s an exciting time for sure. New companies continually enter the space with bold, innovative ideas. As a result, the industry seems to grow braver and more ambitious by the day.

These new entrants are not just arriving with a colocation as the sole concept. They’re integrating data centers and collocations with other areas such as grid stabilisation in an effort to be a greater part of the community.

The industry has received its fair share of negative press when it comes to power consumption. And while it’s completely understandable that people are voicing their concerns, the reality is the industry is taking bold steps to address these challenges. Right now, our industry is working on concrete solutions to the climate crisis. .

It’s time to diversify
Until recently, the traditional route for data center companies was to enter a single market and grow within it.

Now, organisations must enter a greater diversity of markets that need large-scale capacity. And they must be increasingly agile, so they can quickly pivot into new markets as opportunities arise.

Is this Africa’s year?
Our industry is breaking into new countries all the time. Last year was undoubtedly India’s year. Demand exploded in Mumbai as the data center market went from being seen as too challenging, to an opportunity too good to miss.

It looks like Africa’s going to experience a similar explosion this year. And it’ll likely be split into three or four regions. East Africa will focus on Kenya while the Southern regions will be led by South Africa, which will be split between Johannesburg and Cape Town.

As for West Africa, Nigeria is a sleeping giant at the moment. But I think we’ll see the same pattern there as we did with Mumbai as the market becomes an opportunity too good to ignore.

The final market, North Africa, boils down to Egypt or Morocco – which will be bigger? My money’s on Egypt simply because a lot of demand is driven by content and Egypt has an enormous number of eyeballs that need to be looked after.

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