Top 10 Trends You Need to Know About for Keeping Up with the Cloud Data Center Market

Jul. 25, 2017

DCTrends.jpg (802301300)Technology quite literally moves at the speed of light. To keep up with the Cloud Data Center market, it’s vital to stay on top of changes. Here are the top 10 trends you need to know about.

1. On-Demand Access

Cloud Data Centers primarily store information and provide disaster recovery capabilities. However, as new technologies grow—such as mobile applications and the Internet of Things (IoT)—the need for on-demand access is also growing. Users expect to have the same experience with data whether they are accessing it from a local device storage or from the cloud. Cloud Data Centers need to provide faster data processing and continue to shift focus to cloud computing and reducing latency.

2. Hiring Demand

Data scientists use analytics to turn big data into valuable and actionable insights. As Cloud Data Centers make the shift from information storage facilities to on-demand cloud data processing centers, the need for data engineers is rising. Data engineers optimize the performance of their company’s big data ecosystem. Rather than hiring just data scientists, Cloud Data Centers may need to consider hiring teams of data scientists and data engineers to create and deploy models and algorithms.

3. Infrastructure Flexibility

As many companies chase the latest technology-enabled innovation, the demand for flexible IT infrastructure grows. Many organizations are moving their data from on-premise servers to service provider Cloud Data Centers. This increases infrastructure flexibility, as businesses can choose between dedicated or shared servers, public or private clouds and hybrid services for the best fit to their rapidly shifting needs.

4. Shift from Numbers to Capacity

Despite recent explosive growth, some analysts believe that the number of Cloud Data Centers will peak in 2017. However, even as physical space demand reaches its limits, data capacity at service provider centers continues to grow and is driving datacenter interconnects to faster speeds and higher bandwidth port densities. Service providers are running mega Cloud Data Centers as they shift to cloud offerings. Cisco predicts that by 2020, 92 percent of all workloads will be in the cloud.

5. Increased Investor Interest

Cloud Data Center growth is attracting investor interest. Although some Cloud Data Center investment opportunities are less attractive due to rising energy costs and sovereignty laws, some reports indicate that Data Center Real Estate Investment Trusts (REITs) are delivering 10 percent to 15 percent returns. Other types of investment funds are yielding single digit returns in the current monetary climate, making Data Centers an attractive investment opportunity.

6. Geographic Cloud Growth

In certain markets, such as Silicon Valley, Northern Virginia (NoVa), London and Tokyo, the shift to the cloud is happening even faster than in other parts of the world. Several major providers anticipate they will need to triple infrastructure by 2020.

7. Faster Speeds Without Higher Costs

The surge in data comes from the growth of video streaming, the IoT and mobile applications. Bandwidth demands that accompany this surge are leading Data Center operators to seek faster speeds without increasing costs. 25 Gigabit Ethernet (25GbE) offers a balanced tradeoff between performance and cost as Cloud Data Centers transition to higher speeds. 

8. Bundling and Flexibility

Another way to increase data transfer and processing speeds is to bundle links. Cloud Data Centers can achieve 100G speeds by aggregating four 25GbE links. Conversely, they can increase data handling flexibility by unbundling 100GbE links into four 25GbE links.  And, the industry is already developing 400GbE links that bundle four 56GbE links using higher-order PAM4 modulation schemes.

9. High-Density Switches

Advances in semiconductor design and configuration allow Cloud Data Center operators to reduce costs through increased power efficiency. For example, a 48-port switch can now be configured on a single chip instead of the two chips previously required. Optimized solutions such as MACOM’s L-PIC allow Cloud Data Center operators to increase capacity cost-effectively and efficiently. By using MACOM’s proprietary self-alignment (SAEFT™) technology, MACOM’s L-PIC enables lower cost, efficient and scalable module solutions and increases the adoption of PICs as high density optical interconnect solutions for Cloud Data Centers.

10. IT Outsourcing

One way organizations can free up space on their networks while maintaining (or increasing) bandwidth speeds is to outsource their IT to the cloud. Rather than maintaining their own complete IT infrastructure, companies can turn to cloud service providers for increased speed and flexibility at a lower operating cost.

The Cloud Data Center market is evolving rapidly. Although some opportunities are shrinking as data moves to the cloud, savvy investors can realize gains. Stay on top of these 10 trends to make your investments count.  


All financial guidance projections referenced in this post were made as of the publication date or another historical date noted herein, and any references to such projections herein are not intended to reaffirm them as of any later date. MACOM undertakes no obligation to update any forward-looking statement or projection at any future date. This post may include information and projections derived from third-party sources concerning addressable market size and growth rates and similar general economic or industry data. MACOM has not independently verified any information and projections from third party sources incorporated herein. This post may also contain market statistics and industry data that are subject to uncertainty and are not necessarily reflective of market conditions. Although MACOM believes that these statistics and data are reasonable, they have been derived from third party sources and have not been independently verified by MACOM.