Published by Norway-Asia Business Review
Data centres: a couple of decades ago we had never heard of them. Now we store everything ‘in the cloud’. If we just stored documents in the cloud that would be easy, but of course we want to look at those pictures, videos and other documents. And not just look at them, but edit in the cloud as well.
Between 2016 and 2022 mobile data traffic is expected to increase eightfold in Asia Pacific according to the Ericsson Mobility Report from June 2017. This is mainly because of video consumption. These videos have to be High Definition and streamed fast without any lagging. Nobody wants to watch a grainy video buffering every few seconds.
In order to keep up with this herculean increase in video streaming, data centres are running overtime. Even the best data centres with the latest technology will have difficulty providing the highest speed and quality to everybody. The distance between a data centre and consumer, a preppy high school kid live streaming a concert, matters.
In recent years, the industry has seen a big push towards “Edge Data Centres” which are smaller, localised and often bespoke to serve the data processing needs closer to the consumer. They also provide a reliable and fast inter connectivity to the cloud, acting as an extension to the “edge” of the cloud.
For concert videos, we could argue it is not that important if a kid in Singapore has to buffer a video more often than someone in Iceland close to that hypothetical data centre. But in some trades speed really does matter. High frequency trading on the stock market comes to mind. For those industries, but also for regular Joe who expects ever improving download speed, companies are looking at ways to meet the demand. The solution comes from an unexpected source.
Eltek has been in the power solutions industry since 1971. By now they are an established name offering “high-efficiency power electronics and energy conversion within telecom, data centre and industrial applications”. Their latest endeavour is the Modular Data Centre. These prefabricated, scalable and flexible data centres resembling shipping containers, can be deployed quickly in any environment to bring the cloud closer to the people. The land surrounding a telecommunication tower is such a place that could be turned into a data centre within months.
Noteworthy is that Eltek delivers these Modular Data Centres turn-key. Through working together with technological partners they can offer completely prefabricated data centres to their clients. Every company’s needs will be different, and the key advantage of Eltek’s solution is that they are able to customise and does not restrict to standard shipping container sizes.
Cloud storage has become so commonplace that it is not just reserved for technology companies like Apple, Google and Dropbox. All type of companies could use, and are increasingly using, cloud storage for their enterprise data. Internet of Things (IoT) which is another hot topic at the moment, autonomous vehicles, smart homes, smart cities all depends on the need for reliable and fast data processing and transfers.
Even more interesting is that unexpected companies are becoming data companies themselves. A telecommunication company for example, is no longer solely in the business of letting people talk to each other over long distances. They could also be in the business of analysing phone calls, at least on a meta level, meaning who calls with whom, for how long and from what location.
Of course, this comes with privacy concerns and new regulations, but the fact remains that user data is becoming increasingly valuable to companies that never considered themselves to be in the data business before. On the other hand, this data also enables the telecom operators to offer their subscribers better and more directed services. These companies might have the space or land to set up data centres like around cell phone towers, but not the technology or experience. In that sense Eltek’s decision to also offer the needed bespoke solution to this new generation of data centre operators is logical.
With the possibility to share data centres among several companies, the cost to setup and maintain a data centre is now within reach for many. Additionally, the highest cost of data centres is actually keeping all those hard disks cool. And this is where Eltek already has a competitive advantage. Nowadays, a large chunk of global energy consumption is accounted to data centres. In the USA for example, data centres consume “just under 2 percent of total U.S. electricity consumption” according to Berkeley Lab.
That illustrates the immense electricity demand of cloud storage. The associated cost and strain on the environment are something to be taking into consideration when choosing a data centre solution. Spurred on by Greenpeace’s Clean Click campaign, major technology companies like Facebook and Google committed to using renewable energy for their data centres. Lower energy consumption is still important, because even renewables have an environmental impact. Think of wildlife impact of hydropower plants and the energy needed to build those plants. The impact of renewables is much lower compared to fossil fuels, but not nearly approaching zero.
A 1 percent, or even just 0.5 percent reduction in power consumption, contributes on the long run to significantly lower costs and environmental impact. Eltek’s decades-long experience in power conversion, transferring the voltage of the grid to suitable voltages for every chip, hard disk and fan, resulted in a high efficiency. With a Power Unit Efficiency of 98 percent, only 2 percent is lost during transformation, Eltek’s technology is very attractive to anyone interested in going into the data business.
At the moment Eltek is touring through Asia to show off one of its Modular Data Centres to clients in Thailand, Singapore and Indonesia. Asia Pacific especially is expected to witness a boom in data centres and local storage according to PWC’s report from January 2017 fittingly titled ‘Surfing the data wave. The surge in Asia Pacific’s data centre market’.
The report states that “[t]his is a period of rapid growth in demand for data centre services in Asia Pacific. Our way of life is changing. More people are connected throughout the region, with an expected smartphone penetration of 66% by 2020. Coupled with the proliferation of rich media and digital solutions, the increased digital connectivity subsequently results in a sharp growth in the amount of data generated, consumed, stored and transferred.”
If you’re not impressed yet, let the numbers speak for itself, as shared by PWC.
“Asia Pacific’s data centre services market size will exceed the European market size by 2021. The region’s data centre services market size in 2016 is US$12 bn and is expected to grow by 27% per annum (p.a.).”
Japan and China are especially interesting to potential investors, predicts PWC. “Japan is the
largest data centre services market in Asia Pacific. Its data centre services market size in 2015 is c. US$6 bn, which is >2x the next largest market in Asia Pacific. China’s data centre services market is expected to experience the fastest absolute growth in the region. US$1.2 bn is the expected average absolute growth p.a. of China’s data centre market between 2015 and 2022.”
The increase in predominantly mobile video consumption, leads to the birth of a whole new industry catering to local data centres. Since it is impossible to store all videos produced by media companies or users themselves via YouTube, which videos should be stored locally in individual data centres?
Here lie new opportunities for companies in big data to solve the riddle of the ultimate data distribution. To solve that riddle, insight into individual consumer demand is necessary. It won’t be long before the next series you are about to watch will be uploaded to the server, just a few days before your usual monthly binge marathon. A future of endless video consumption without any lagging awaits the Netflix fan in every nook of the earth.
- Eltek has been in the power solutions industry since 1971 and offers a Power Unit Efficiency of 98 percent;
- Between 2016 and 2021 the traffic from smartphones is expected to increase eightfold in Asia Pacific;
- Expected smart phone penetration of Asia Pacific is 66% by 2020;
- Asia Pacific’s data centre services market size will exceed the European market size by 2021;
- The region’s data centre services market size in 2016 is 12 billion USD and is expected to grow 27% yearly;
- Contact Eltek’s team through the website.