What Do We Need To Know About Data Centre Investments?

Today, we are all a part of the Digital World, where many of our day-to-day transactions are mostly digitized. Though we still use paper documents for many vital activities, we are highly accustomed to maintaining a soft-copy of almost every important document. As humans, we always want things to be handy and work to be done seamlessly. Fortunately, digital processing ushered in and made our lives easier and brisker in the form of Data Centre Investments.

In this modern era, with booming technologies like Artificial intelligence(AI), Virtual reality(VR), and machine learning(ML), the world is witnessing a rapid increase in the demand for more data storage and more robust processing power. So, we need to have something that can serve these purposes, and that’s how Data centres are established.

What Is A Data Centre?

Data centres are centralized locations where computer systems and associated components are assembled to collect, store, process, distribute, and allow access to large amounts of data. They also often include backup components to avoid system failures and several security devices, exemplifying the importance of IT operations in the modern business world.

Role Of Data Centres In Businesses:

Data centres are generally designed to support activities like:

• File sharing and e-mail sharing
• Customer relationship management (CRM)
• Enterprise resource planning (ERP) and databases
• Virtual desktops, communications and collaboration services
• Big data, artificial intelligence, and machine learning, etc

Growth Of Data Centres:

Data centres are a megacorp in the world business. As per sources, the global data centre market is estimated to reach a revenue of approximately $174 billion by 2023. India’s data centre market is expected to generate US$ 3.2 billion by the year 2024. Digital Trends reports that every day, on an average of around 2.5 quintillion bytes of data are created by 3.7 billion Internet users.

Need For Data Centers:

We are in a data-driven economy where no organization can survive without analyzing and proper utilization of data. Data plays such a crucial role since it predicts the current and future trends of the world. So it is essential to store and access the data efficiently. Data centres help organizations to use their data efficiently. For any organization, the primary purpose is to address and satisfy the customer needs on time.

This can be done only if the analysis of data is done correctly. These data centres help the data analysts to analyze the data so that the business operations of the organization improves. As data is increasing in large numbers from day to day, the problems associated with storing and traditionally accessing data can be overpowered by the use of data centres.

Types of Data Centres:

Based on the purpose and topology, there are majorly four types of data centres available.

1. Enterprise Data Centres:

Enterprise data centres are owned, and operated by companies and are also optimized for their end-users. Mostly the data centres are housed on the corporate estate itself.

2. Managed Services Data Centres:

As the name itself suggests, these data centres are managed by a third party on behalf of a company. Instead of buying the whole equipment and infrastructure, the company simply leases it.

3. Colocation Data Centres:

In these data centres, a company rents space within a data centre which is owned by someone else and is located off company premises. The hosting company offers the infrastructure: building, cooling, bandwidth, security, etc. while the company offers and manages the components, servers, storage, and firewalls.

4. Cloud Data Centres:

This is an off-premises kind of a data centre where data and applications are hosted by a cloud services provider like Amazon Web Services (AWS), Microsoft (Azure), or IBM Cloud, or other public cloud providers.

How To Invest in Data Centres:

Infrastructure and a fair environment are critical to the data centre’s security and compliance. Most of us are not aware that we can invest in data centres. So, here are some ways to invest in data centres.

1. You can invest in existing data centres including powered shells, and industrial data centres. These investments range from full turn-key data centres to outdated facilities that require retrofitting(incorporating some new features to an old system).
2. You can also invest in data centre construction projects which build new data centre facilities. You can hire real estate realtors to know in detail about this.
3. Another way to invest in data centres is by investing in retrofit projects with funds allocated for modernizing the existing data centres.
4. Just like the traditional REITs, there are also data centre REITs. One noticeable advantage of data centre REITs is that their growth isn’t dependent on consumers spending money, unlike the retail REITs.

Shortcomings Of Data Centre Investments:

• Data centres aren’t like every other business. It’s not just about buying a site, but the facility which needs to be fitted, equipped with interconnected networks, and wired for massive electric power and top-tier security devices.
• Maintaining and establishing data centres is expensive and a hefty commitment. Unlike in the residential system, where tenants can move out(when there’s a dynamic change in the market pricing), it’s hazardous and expensive for companies to leave a data centre, given the amount of infrastructure investment there.

The best alternative to data centre investments is Commercial real estate(CRE) investments. Through CRE, one can earn steady returns through rental income and capital appreciation. CRE investments can yield some subtle benefits like a novel source of cash flow, potential long-term appreciation, and proper diversification of the investment portfolio.

When it comes to CRE investment, Assetmonk nails its duty. Assetmonk provides a wide range of solutions to all the customer’s concerns and uncertainties. It is highly known for its best asset-curation process since all the assets are filtered after strict due-diligence, and most of them are located in some of the prime areas of major metropolitan cities.

However, when it comes to data centre establishments, there are many approaches that organizations can choose. It’s evident that data centre investments can be vigorous commitments. But since the data is continuing to grow at an increasingly rapid rate, more and more businesses have to take the plunge. So, before you invest in Datacenters, keep minding some key factors. Stay up to date on data usage trends and property performance statistics to determine whether data centres are the right addition to your investment portfolio.