What’s contributing to the ever-increasing need for data centres? Our investment team looks at three key growth drivers. 

This information does not take into account your personal objectives, financial situation or needs. You should consider if the relevant investment is appropriate having regard to your own objectives, financial situation and needs.

 

Data is used in every facet of our lives – it surrounds us as employees, consumers and business owners. 2.5 exabytes (or 2.5 billion gigabytes) of information is generated worldwide every day, ranging from individual shopping transactions to business analytics and sensitive government information.

As the amount of data generated grows, organisations need space to store all this information for future use – this is where data centres come in. Data centres allow organisations to store all their data in typically offsite locations, rather than storing in-house on personal servers.

The demand for data centre storage is rapidly growing. In Australia alone, the industry generated A$2.3 billion in 2017. The data storage industry has grown at an annual rate of 14.4% year-on-year from 2013-2018.

Its rapid growth can be attributed to three key drivers:

  • increased internet traffic
  • development and use of cloud computing
  • rising number of businesses outsourcing their data storage to third party businesses

 

Increased internet traffic

This driver is easy to see in action. We live in a time where internet accessibility among consumers is almost universal, and still set to grow. Internet speeds are increasing, and the cost of connectivity is decreasing.

Outsourcing data storage

The final driver of data centre growth is the rising number of businesses outsourcing their data storage to third parties. Storing data on in-house servers can be expensive, and businesses are becoming more comfortable outsourcing their data management requirements.

Who are the biggest users of data storage?

The biggest users of third-party data storage can be classified into three main groups: information, communication and technology companies. These companies routinely require server capacity to process large amounts of data, which fluctuates based on the demand for their services.

 

All signs point to a growing trend; a trend built on the belief that an interconnected, global world will need a place to store its data. Access the full article plus the investment insights, sign up to AtlasTrend today – sign up for a free 30 day trial.

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About Kevin Hua

Kevin Hua is a Co-Founder of AtlasTrend, an online investment platform that makes it easy for anyone to learn and invest in trends transforming our world. Kevin has over 20 years experience in financial markets including as Senior Portfolio Manager at Atrium Investment Management and Stark Investments.