Data centres: Invisible engines of change

Iron Mountain

By Mark Kidd, Executive Vice President and General Manager of Iron Mountain Data Centres
Monday, 29 May, 2023

Data centres: Invisible engines of change

Most people don’t give them a second thought, but data centres have become part of the critical infrastructure of modern society, and they are also becoming critical enablers of decarbonisation.

Look at the devices around you. When did you last have a video call, do some online shopping, share a file or do some banking on your mobile? Do you store your photos in the cloud, use satnav or play online video games? These are just a few examples of how our way of life is now based on what goes on in data centres.

Dig a little deeper and you’ll find that interconnected data centre infrastructure enables every part of modern life. It allowed people to work from home during the pandemic, paving the way to hybrid working. It makes telemedicine and the emergency services work, and speeds up all types of research and development.

For businesses, the huge volume of data stored and processed in data centres powers logistics, HR, finance and sales, with public cloud infrastructure and applications that are revolutionising every sector from entertainment and gaming to government and banking.

Physical to digital

This transformation is happening at a breathtaking pace. A lot of what was once physical is now digital, and lives in data centres. An IDC report predicts that by 2026, organisations that successfully adopt a data-driven approach will generate more than 25% of their revenues from digital products, services or experiences. Locally, the adoption of cloud services by Australian businesses has resulted in a cumulative productivity benefit to the economy of over $9 billion within the last five years.

Largely, we take this new digital way of life for granted; it is impossible to calculate what the total social and environmental benefits of the digital society have been so far. However, they include improved collaboration, greater competition, lower costs, more and faster product innovation, scientific breakthroughs, reduced travel and use of materials, and revolutionary new ways of using data like the Internet of Things and Artificial Intelligence.

In-house to shared

Over the last decade, legacy in-house data centres have migrated much of their IT workload to cloud facilities, massively improving operational efficiency.

To a great extent this increase in efficiency has offset the potential negative impact of the exponential growth in data. According to an IDC white paper commissioned by Microsoft, public cloud spending in Australia is set to grow by 83% to AU$22.4bn in 2026, as organisations seek to increase their capabilities and optimise costs.

As data levels continue to grow, so will data centres. Something altogether new needs to be done to ensure that the positive impact of data centres does not turn negative.

Greening the grid

Fortunately that is what much of the data centre industry has been doing, led to a great extent by the largest public cloud providers and innovators in the sector. As well as being critical enablers of our digital society, data centres are now becoming critical enablers of decarbonisation and it is critical the sector continues to lead the way.

This begins with renewable energy. The world’s top four purchasers of clean energy are cloud service providers. Renewables now account for over 30% of power generation globally.

Within Australia, data centres account for around 2% of total GHG emissions, leaving no room for complacency. While there are no mandatory energy efficiency programs that directly target the data centre sector, there are a handful of voluntary assessments including National Australian Built Environment Rating System (NABERS) that help reduce outputs by over US$1 million per year.

Virtual to real

Data centres are nothing if not ambitious, and they are now aiming higher. Amazon is the world’s largest purchaser of renewables. Microsoft has committed to not only be carbon negative by 2030 but to erase its total carbon footprint going back to 1975 by 2050. Google has committed to go beyond Virtual Power Purchase Agreements (VPPAs) and run on 24x7 carbon-free power by 2030. Iron Mountain Data Centres, already running on 100% renewable power, was the first colocation provider to make the same commitment.

The key to using real rather than virtual renewable power — genuine decarbonisation — is tracking, analysis and rerouting. There are advantages to being a relatively new sector. Because the data centre industry is relatively new, it can do things differently. And, like the rest of society, it can take advantage of these new data-driven technologies to power its own transformation.

Changes and challenges

Not all data centres are green, even if many are well on their way. Data centres are not genuinely sustainable yet, and data processing and power consumption will continue to grow as society relies on digital infrastructure more and more.

But data centres are definitely changing the way we live bit by bit. And many are also doing their best to tackle the challenges of the climate crisis. So next time you're streaming Netflix or scrolling through Instagram, spare a thought for this new and almost invisible industry which is growing fast and making such an important contribution to modern life.

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