The COVID-19 Crisis and the Data Center Industry

April 21, 2020
The COVID-19 pandemic presents strategic challenges for the data center and cloud computing sectors. Data Center Frontier provides a one-stop resource for the latest news and analysis for decision-makers navigating this complex new landscape.

The COVID-19 Coronavirus crisis has reinforced the importance of data centers and what they do. The digital transformation that was thought to be a multi-year evolution has been dramatically compressed. The pandemic has been a watershed event for the world, and a defining moment for the cloud.

Entire industries are effectively being reset, and this transition has made digital infrastructure more important than ever. This is a new world for everyone. Our entire global society is prioritizing the things that are critical to their business, and what they need to do to deliver them. There’s a shared challenge of trying to deal with these new realities, to try and think creatively about what the best solutions are.

The data center industry has a long history of experience operating in difficult circumstances and environments. The data center’s history has prepared it to play this key role as the backstop for the rest of the economy. It’s becoming clear that the Coronavirus pandemic will have long-term implications for the industry, and will influence business for some time to come.

Here’s a look at our year-end 2020 coverage of the pandemic’s extraordinary impact n data center leasing and construction.

COVID-19 Pandemic Drives Record Data Center Leasing

Data center customers have leased more than 500 megawatts of capacity in 2020, an all-time record. With space scarce in key markets, cloud platforms and video services are pre-leasing data centers before they are built.

Construction Surging Amid Supply Constraints

Data center developers are scrambling to add capacity, as this year’s record leasing activity has consumed much of the available supply of server space. Several leading markets are seeing a boom in construction.

Here are some of the key challenges and opportunities that lie ahead.

COVID-19 Resource for Data Center Professionals

Here’s a list of industry resources for data center professionals about the COVID-19 Coronavirus pandemic, including best practices from industry groups, perspective from analysts, and policies and contingency plans for data center providers.

Data Network Traffic Impact From COVID-19

Here’s a “by the numbers” summary of the latest data points on COVID-19 related driven traffic gains for Zoom, VPN services, video games, cloud computing, Internet exchanges, content delivery networks and other online services. This is “an extraordinary period in Internet history,” said Akamai CEO Tom Leighton “I’ve been looking at traffic graphs for over 20 years now and I can’t recall seeing anything like this.”

A Cloudy Future: Data Center Demand and COVID-19

What will data center demand look like going forward?  The data center industry must adjust to a complex new reality. Demand for cloud services will soar in some sectors, but wither in other verticals as they shift into survival mode. The shift to online services will likely offset the economic setbacks in key sectors, according to securities analysts tracking the sector.

Pandemic Poses Challenges for Construction, Supply Chain

Data center construction continues to move forward, with a handful of projects slowed or halted by COVID-19. But analysts see risks for data center construction projects and the supply chain supporting them. “The outbreak will start to slow the ecosystem down and the first area that might see this impact is data center construction projects,” said Structure Research.

In our ongoing coverage, Data Center Frontier explores the strategic challenges the pandemic presents for the data center and cloud computing sectors as we navigate this complex new landscape. See more recent stories below.

About the Author

Rich Miller

I write about the places where the Internet lives, telling the story of data centers and the people who build them. I founded Data Center Knowledge, the data center industry's leading news site. Now I'm exploring the future of cloud computing at Data Center Frontier.

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