The big data companies, Google, Amazon, and Microsoft, are buying data centers at a rapid rate as the race to control cloud computing heats up.
In 2017, cloud companies and providers of data center services spent an impressive $20 billion, an amount that’s still higher than the previous three years combined.
As the ownership of data centers becomes more costly to operate, the industry becomes ever more centralized. The big three are buying the infrastructure and equipment from Fortune 500 firms that have switched to the cloud due to cost-effectiveness. Data center experts are even starting to take notice.
“You’ve got a major transition happening with the ownership of data center assets,” Recode reports Pat Lynch, senior managing director for CBRE’s Data Center Solutions saying. “Three to five years ago, the vast majority of the data center space utilized around the world was occupied by the company that owned or leased that space.”
Today is a different story. Much of the issue with private businesses abandoning their ownership of data centers could involve exorbitant energy costs.
A 20% increase in energy efficiency in all American data centers would save 20 billion kilowatt-hours or more by 2020. That’s a dollar value of roughly $20 billion. Bigger companies might be able to eat this cost, but for many the price is too high.
This could be an issue for big data companies like Google down the line. Right now, however, the industry is currently preparing for an impending talent drought.
Top Google executives and data center specialists are expressing apprehension over the relatively stagnant prospective market for employees. In a growing industry, fresh and innovative minds are critical, yet according to the vice president of Google data centers, Joe Kava, there simply aren’t any.
“This is truly one of the most important industries of the future, but most young people are unaware of it,” Kava said in reference to data.
As the big data companies buy up more and more unprofitable data centers from other businesses, and the outlook for new talent in the industry is dim, the forecast the cloud is starting to look a little stormy.
