Three reasons 2021 promises a strong recovery for data centers

Diego Villagra December 21, 2020

Woman-data-center-screen2020 has certainly been full of surprises. Just last year, the International Monetary Fund forecasted global economic growth at 3.4 percent for 2020, representing a modest improvement over a generally disappointing 2019. Of course, we all know that’s not how it worked out.

Today, the pandemic-induced global economic decline is expected to bottom out at 4.4 percent by the end of 2020. This decline has impacted every aspect of the economy—closed businesses, lost jobs and halted investments. Given these headwinds, what does the future hold for the data center industry as we look ahead to 2021?

CLICK TO TWEET: Here are three reasons why there will be a strong recovery for data centers in 2021

Data center opportunities and challenges

It’s tempting to assume that the massive shift to Internet-based solutions for everything from schooling to work to grocery shopping and telehealth would mean a bright future for data centers amid the economic downturn. Yet, data centers also face downward pressures from lost entertainment, travel and hospitality business and delayed data center deployments due to costs or supply chain disruptions.

Looking forward, 2021 projections suggest a moderate recovery is in the works—and data centers will be among the first industries to see the benefits. In fact, data centers will play an increasingly important role in how communities and economies connect and thrive in 2021 and beyond. Here are three reasons why we can expect to see recovery in the data center industry in 2021:

The general migration to online virtual solutions is here to stay

COVID-driven changes in the delivery of services have reset expectations. Even as restrictions are lifted, people and businesses will continue to expect the convenience of increased online accessibility to work, shopping, healthcare and more. The simultaneous deployment of large-scale 5G networks is also poised to streamline peoples’ connected lives in the post-pandemic era.

The recovery will spur a new round of data center investment

Dovetailing with increased demand and deferred data center investments during 2020, enterprises will be under pressure to upgrade and expand their data center spaces to accommodate the new ways of living, learning and working. With the growth economy expected to prevail in 2021, enterprises will be in a great position to consider and execute a more thoughtful, long-term IT strategy. This will be the catalyst for increased investment in both enterprise data centers and multitenant data centers (MTDCs) that provide enterprises with a quick route to expanded public cloud and whitespace.

Stabilizing supply chains and public policy will create a favorable building environment

The expected end of travel restrictions, industrial and commercial lockdowns, combined with the recovery of global supply chains, mean enterprises will be able to make data center investment decisions with confidence and clarity. The resumption of construction of data center space will be fueled by pent-up demand.

2020 is a year no one will miss. Every industrial sector and population has been deeply affected by the economic fallout of COVID response. Looking forward to 2021, we can all take heart in an economic recovery that will help return life and business to normal—even if it is a “new” normal. Data centers will continue to be at the center of this evolution, and CommScope will continue to offer the innovative infrastructure solutions that will power them into 2021 and beyond.

About the Author

Diego Villagra

Diego Villagra is a program manager overseeing CommScope’s data center strategy development. Diego has 5 years of experience as a corporate strategist. At CommScope, he has been involved in a variety of roles including market intelligence and corporate strategy. Diego earned his a Bachelor of Arts and Master of Development Practice in International Economics degrees from the University of Minnesota.