Top data center trends you need to know in 2025

The rapid ascent of AI continues to dominate the news – and for good reason. But a crucial part of the tech world is often overlooked, despite its equally dynamic growth: the data center industry. It serves as the foundation for AI and nearly all things digital. What data center trends and buzzwords should you be aware of in 2025?

Gone are the days when mainframes (before they were even called data centers) weighed 27 tons, took up 170 square feet, and required constant monitoring by a dozen technicians. Over the past three decades, the data center sector has changed significantly in terms of power requirements, bandwidth, and computing power demand.

Failure to keep pace with these advances could have negative consequences for companies that rely on data center efficiency in their day-to-day operations. And what companies don’t these days?

Here are some interesting comparisons between data centers of the 2000s, the 2020s, and the future – the 2030s.

Power Consumption Growth

Bandwidth Explosion

Computing Power Demand

2000s

Average data center power consumption is 1 MW.

Global Internet traffic is measured in terabytes per day.

Computing power demand is in the teraflops range.

2020s

Modern hyperscale data centers consume >100 MW.

Traffic increases to >100 petabytes per day.

Data centers are pushed to operate in the petaflops range.

2030s

Projections estimate an increase of up to 160% over current energy consumption.

Traffic is expected to exceed exabytes (billions of gigabytes) per day.

With the expected rise of AI, data centers will reach exaflops.

Yes, you guessed it! It’s no surprise that AI is ushering in a new wave of demand for the data center industry. Many current facilities, including multi-tenant data centers, will need upgrades (or are currently getting them) to meet AI’s processing power needs. Additionally, investments in hyperscale data centers are predicted to rise by 15%.

AI’s impact extends beyond the need for updated equipment or larger spaces; the heat generated by these advanced technologies necessitates data centers equipped with liquid cooling systems.

While some data centers can be retrofitted to include this cooling technology, the lengthy process and revenue losses involved in retrofitting make it likely that many of these next-generation data centers must be built from scratch.

Companies that develop adaptable data center infrastructure strategies will be in the strongest position to capitalize on the AI boom, driving significant growth.

Data centers are under increasing scrutiny for their carbon footprint, as well as water and energy consumption, which is expected to grow as demand increases. As a result, forward-thinking data center operators are prioritizing sustainability and actively working to reduce their environmental impact.

Key factors of sustainable data centers include reducing energy costs, utilizing renewable energy sources, designing more efficient hardware, managing waste responsibly, and adopting “green” construction practices. These are no longer optional but essential for the industry.

In support of these efforts, European governments have introduced proactive measures to encourage the adoption of energy-efficient technologies and renewable energy in the data center field. These initiatives include regulatory frameworks, financial incentives, and research support.

The swift technological advancements in the data center market necessitate greater automation. This need is further intensified by the ongoing credit crunch and labor shortages, as organizations across all sectors strive to enhance productivity and efficiency with limited resources.

Data center automation is already present in various capacities, such as scheduling, monitoring, maintenance, application delivery, and identifying inefficiencies within networks and infrastructure.

By automating these processes, employees can dedicate more time to essential, high-value tasks, which will further expedite the modernization of data centers. This trend toward automation is expected to continue in the coming years, focusing on improving data center agility and operational efficiency.

Edge data centers, compact facilities designed to process and relay data closer to end-users and their devices, are becoming more and more popular in comparison to traditional data centers. They offer the key benefit of reduced latency, enhancing the overall user experience. However, their advantages extend far beyond just speed.

As businesses across various sectors aim to boost efficiency, adopt sustainable practices, integrate AI into their systems, and consider cloud repatriation, these trends are driving significant interest in edge data centers. As a result, this market is seeing an impressive 92% annual growth.

Moreover, 2024 has marked further expansion of edge data centers in both urban and remote areas, driven by the increasing demand for real-time data processing in applications such as autonomous vehicles, IoT devices, and 5G networks.

• Technological progress: Data centers are consistently evolving their infrastructure to seamlessly incorporate artificial intelligence (AI) and the Internet of Things (IoT), allowing them to effectively manage the complexities associated with contemporary data processing.
• Growing demands: The need for higher bandwidth, greater capacity, and lower latency is increasing as businesses and consumers increasingly depend on digital services and real-time data analysis.
• Data management approaches: Formulating effective strategies to meet the unique data requirements posed by AI and IoT applications, ensuring that data centers can adeptly process and store large volumes of information.

• Maximized rack density: Hyperscale data centers are designed to optimize rack density, enabling substantial capacity growth while maintaining high performance.
• Worldwide expansion: There is a significant increase in the development of hyperscale data centers globally, driven by the demand for scalable and efficient data storage solutions.

• Financial considerations: Many organizations are grappling with the financial challenges associated with fully committing to public cloud services, prompting them to reevaluate their cloud strategies.
• Exploring private cloud solutions: Organizations are investigating the potential advantages of private clouds, which can provide increased control, security, and customization.
• Opting for on-premises cloud migration: Some businesses are choosing on-premises setups to customize performance according to their specific needs while better managing costs.

The data center industry is in a continuous state of evolution to meet the growing demands of modern technology, particularly driven by advances in AI.

As AI becomes more integrated across industries, data centers must increase their capacity and infrastructure to support the increased need for processing power. Sustainability is a key focus, as such facilities seek to reduce their environmental impact through energy-efficient practices and renewable resources. Automation also plays an important role in improving data center efficiency and addressing labor shortages. Another trend is the rise of edge data centers, which are designed to bring computing closer to the user, improving speed and reducing latency.

As these developments unfold, data centers are expanding globally, adapting to the challenges of increased digital consumption while reevaluating cloud strategies to balance performance and cost.