It used to be the norm for companies to own and run their own data centers, but that has changed lately. The amount of business software running on traditional servers fell to 32 percent of all enterprise applications in 2022, almost half of what it was in 2019. The use of cloud storage and computing, where computing is purchased as a service from a third party, is usually less expensive than self-operated data centers, and it makes it easier for companies to scale computing up or down as necessary.
Global spending on cloud infrastructure has increased by about 20 percent annually since 2020, and Uber is one of many companies that have recently ditched its own data centers for cloud computing. The San Francisco-based tech giant announced it will switch from operating its own IT infrastructure to using cloud platforms run by Google and Oracle. Uber plans to fully migrate from its own data center facilities in the next few months.
About 95 percent of Uber’s IT infrastructure is currently housed in data centers it owns or leases from co-location providers. Uber’s reliance on its own data centers (up until its recent decision) made it an outlier among large tech firms, most of which have long outsourced a considerable chunk of their computing to cloud providers like Amazon Web Services and Microsoft. Many said Uber’s move to the cloud was inevitable, with global consultancy Gartner’s Vice President Sid Nag saying they “eventually had to do this” because of the cost savings.
The concept of cloud computing has been around for a while and encompasses many aspects. Most people use cloud services without even realizing it. Google Drive, Gmail, and even Facebook are all cloud-based applications where users send personal data to a cloud-hosted server that stores the info for later access. Cloud computing allows companies to access all the features of a computing system without owning the bulk of computing hardware.
This is a valuable service for office occupiers who need to access increasing streams of data over secure networks. But as much as cloud computing has gained in popularity in recent years, another new computing trend is taking hold among corporate occupiers that could bring at least a partial amount of equipment back into the office. “There’s currently a big push for moving micro data centers back into offices, some of them as big as a parking space,” Jason Lund, Leader of Technology Infrastructure at JLL, told me. Lund is referring to edge computing, a strategy that helps provide more computing power and speed to occupiers who are processing vast sums of data.
Cloud computing can still be used, but the further away the “brains” are that process and retrieve data, the computing speed goes down. This is fine for standard office uses like Word processing, but for tenants like music streaming services or gaming companies, any latency in computing is a huge disadvantage. Companies that deal with large volumes of data need real-time, lightning-fast speed, and increasingly, this is the case for companies in all types of industries, from tech to manufacturing to retail.
Data is the lifeblood of business, called the “new oil” by some, and so crucial that real estate companies are hiring chief data officers. Edge computing moves a portion of server storage out of central cloud data centers and closer to the data source. Instead of transmitting raw data to the cloud for processing, that work is done closer to where the data is generated, whether in a retail store, a warehouse, or a back office. The result of the computing work done at “the edge” is then sent back to the primary data center.
The edge computing movement is relatively new, but it’s gaining increased importance due to the enormous volume of data generated by internet-connected devices and businesses. Gartner estimates that by 2025, about 75 percent of enterprise-generated data will be created outside centralized data centers. Moving so much data in often time-sensitive situations puts a strain on the global internet, which is often subject to congestion from so much traffic.
Edge computing will be critical for many emerging technologies, such as self-driving vehicles (if they ever actually come to fruition). Sensor data in autonomous vehicles must be processed instantaneously for them to operate successfully, and processing can’t afford to suffer from the lag times of sending data back and forth to the cloud. The same is true for smart buildings, which would need edge computing for computation heavy activities like computer vision.
The metaverse will also increase edge computing because rendering virtual reality experiences requires fast and intense computing resources. If the metaverse is ever to be unveiled to a mainstream audience, VR headsets will need to rely on the power of edge computing to handle live gaming experiences.
The built world will need to deal with the increase of data coming from the Internet of Things devices. There were more than 16.4 billion IoT devices worldwide in 2022, many in smart buildings, and that number is expected to rise to nearly 31 billion by 2025. By then, IoT devices will generate 73.1 zettabytes of data globally, a 300 percent growth spurt compared to 2019. Occupiers using increasingly more IoT devices will need more computing power to keep pace with this rapid data processing. Processing the data at the edge enables occupiers to optimize IoT systems and analyze data more quickly.
A data center in a box
Office owners who take note of the edge computing trend can gain an advantage by providing the IT infrastructure to support it. Landlords may have gotten used to the shift of more back-office servers migrating to the cloud, but the push for edge computing could bring more equipment back onsite. How this looks will vary in size and scope with each occupier, though sometimes edge computing requires little more than a partial rack of gear to process data locally. Moving IT equipment back onsite can pose a challenge for some landlords with properties that aren’t usually considered data centers. Landlords will have to learn the ins and outs of edge computing architecture designed to support services in sometimes unconventional locations.
One interesting way edge computing looks in offices today is with the design of a “data center in a box.” This hyper-converged infrastructure makes it easy to deploy computing power quickly and is pre-configured to avoid a time-consuming installment process. The data center-in-a-box design makes edge computing more accessible and affordable for office occupiers of all sizes. Micro data center design has been around for about a decade but has become more popular recently. The modular size varies, usually including fewer than four servers in a 19-inch rack. It sometimes has built-in security systems, fire protection, and cooling systems. Energy is conserved by way of temperature chaining, which transforms electrical consumption into usable heat. The data center in a box has been used in places where a traditional data center wouldn’t fit, like a factory floor, but also for smart city applications like in dense city centers.
For landlords, bringing these micro data centers back onsite will also mean monitoring physical maintenance and security. Cybersecurity with edge computing is a bit of a double-edged sword. Moving fewer data off-site to the cloud is arguably more secure and lowers the attack surface because less information is in transit. But housing data servers onsite also has security concerns because of the risk of physical intrusion of equipment. Outsourced data centers in the cloud run by companies like Microsoft are very secure places, built like fortresses and constantly monitored by security guards and cameras. Edge computing can bring the advantages of faster speeds, but it also adds extra work for landlords.
Edge computing is seen as the solution to the massive stream of data that office occupiers are dealing with today. Reducing the traffic sent to external servers makes it so companies don’t have to continuously increase data center capacity to deal with growth, and, in today’s digital environment, it seems like the growth of computing power is inevitable. A global study of 2,400 IT decision-makers recently revealed that 72 percent already use edge technologies, and 16 percent plan to do so within the following year. Companies will likely use a mix of cloud and edge computing to handle their growing digital needs, and office owners who are privy to these trends can best prepare their properties for bringing micro data centers onsite. A robust digital infrastructure is a crucial amenity in offices, and if more occupiers want to ‘live on the edge’ with their computing, landlords will have to help them.