Data centres face multiple regulatory pressures

Significance

Outsourced data centres, including the massive ones that support public and private cloud and edge computing services, are now critical to nearly every business, educational institution and government. However, their rapid expansion raises concerns over heavy power and water needs, increased vulnerability to cyberattacks, and regulatory issues around data privacy, interoperability and localisation.

Impacts

• Recent energy efficiency improvements at hyperscale data centres may be approaching a ceiling.
• The shift towards data localisation will boost investment in local cloud computing infrastructure.
• Location decisions may be as important as technological advances in mitigating data centres' environmental impacts.
• The emergence of data centres as a real estate investment class will be at risk from the giant tech firms building their own facilities.