Investment in the Data Center World

(Ping! Zine Web Hosting Magazine) – The growth of the data center technology industry would seem to be a given. The globalization of information technology, the trend towards near-ubiquitous connectivity, the proliferation of mobile smart devices, the rise of cloud computing and the expanding market for data analysis all mean that demand for data center services can only rise, and steeply.

Yet this level of demand is so great that it could very easily overwhelm supply. The coming Internet of Things (IoT) in particular will devour massive amounts of storage capacity, and unless data centers invest now in next-level storage capacity and server technology, the whole connectivity project could easily grind to a halt, or at the very least move forward a lot slower than it needs to.

The situation then is that data centers represent a huge potential market for investors – but only if they receive sufficient investment to meet the challenges of new technology and realize their own potential growth. Once this wheel starts turning it can only be beneficial for everyone, including not only the data centers, their clients and their backers, but also the wider world that will benefit from the technological advances so facilitated. But to get it started investors need to have faith in the future, and give it a helping push.

Showing the way

Many of the big names in the industry are already investing huge sums of money into data centers, realizing that their future lies in expansion, and being able to handle the huge growth in data they are hoping to see. Microsoft has spent 750 million dollars on its Wyoming data center, expanding three times over the past four years. Apple Inc. has committed to spending almost two billion dollars on two European data centers. Big hitters like Facebook, Amazon and Google are also investing in renewable energy projects in order to provide the extra power they foresee their data centers requiring.

Where the big fish lead, the shoals of smaller fish are sure to follow. If the industry insiders are prepared to invest so much in their data centers, then the wider investment community must also sit up and take notice.

Getting connected

Most experts concur that the IoT will drive technology investment over the next decade. According to recent research there are expected to be over twenty billion connected devices by 2020, effectively revolutionizing the marketplace and business in general. Data center capacity urgently needs to be increased to cope with a predicted increase in demand of 750% over the next four to five years alone. Investment in IoT hosted data center platforms is therefore essential, and businesses need to focus on their IoT service platform requirements at data center level rather than at the level of individual servers or storage devices.

It’s sobering to consider that 90% of the data in the world was generated in the past two years, and that in another 18 months this amount will have doubled again, and will continue to grow exponentially. This represents huge challenges, but also unparalleled investment opportunities.

Ways to invest

Much of the investment in data centers so far has been in the form of real estate investment trusts (REITs). These have done very well and have generally outperformed other REITs. Yet they also represent a fundamental misconception. The value of data centers is increasingly not in real estate, but in the data they store and the technology they use. The rise of cloud computing bears this out; though cloud REITs are growing in popularity at a phenomenal rate, the cloud is not tied to real estate, or any one data center, and information can be moved around at the click of a mouse.

To stay competitive, data centers need to invest in their technology rather than their real estate. Conventional equity stock is one way to invest if a data center company is publicly traded, but a better and more potentially lucrative possibility could be binary options. By developing an investment strategy through a website like an investor can give the industry the support it requires while standing an excellent chance of getting a good return as a result.

Data centers currently sit at a confluence of real estate and technology; as such they are extremely attractive to investors while also making them wary, for they represent an unfamiliar and complex combination of risk factors that are difficult to assess. After all, not every data center is a sound investment. Only those that are prepared to grow with the times and keep up to date with the changes required by advancing technology stand to benefit the most from investment, and will pass those benefits on to their backers many times over.