Data Centers see Surge in Demand as COVID-19 Pushes Users Online
COVID-19 has pushed more users online and increased reliance on digital tools for remote working, remote learning and online shopping. There has been a huge increase in traffic for video conferencing tools, online gaming and video game streaming, VPN services and cloud computing. This has led to a surge in demand for data center capacity. Some analysts have predicted that the COVID-19 outbreak could accelerate the move to cloud computing as businesses prepare for a world where the COVID-19 virus could re-emerge. Some businesses will also want to make sure their continuity plans account for future pandemics. It is likely that data centers will see a strong demand for network services to support this shift.
Data center construction has largely continued as planned with only a few projects halted over safety concerns. The COVID-19 outbreak has had an effect on data center supply chains but as data center operators typically maintain spare parts inventories they have not been badly affected. However, there is some concern over potential difficulties in replenishing these inventories. Data center mergers and acquisitions have also continued despite the outbreak. A total of 28 data center M&A deals have closed so far this year with a total valuation of roughly $15 billion.
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