The COVID-19 Crisis The World’s
Mission - Critical Moment

By Rich Miller, Editor, Data Center Frontier

Published in Issue 4 | July 31, 2020

Staying connected has never been more important. Every business is now a data business, and online services are mission-critical for the world.

The COVID-19 crisis has reinforced the importance of data centers and what they do. The digital transformation that was thought to be a multi-year evolution has been dramatically compressed. The pandemic has been a watershed event for the world, and a defining moment for the cloud.

Entire industries are effectively being reset, and this transition has made digital infrastructure more important than ever. This is a new world for everyone. The data center industry has a long history of experience operating in difficult circumstances and environments. The history of this industry has prepared it to play this key role as the backstop for the rest of the economy.

The data center industry has been notable for its performance in the early days of this crisis. The COVID-19 pandemic will have long-term implications for the industry, and will influence business for some time to come. Here are the key challenges and opportunities that lie ahead.

DEMAND FOR DATA CENTER SERVICES

The outlook for demand for data center space will be more complex than ever, as the COVID-19 pandemic is impacting different sectors in very different ways. Digital services have quickly become the most important tool in continuing operations during the massive lockdowns.

Usage of cloud platforms and streaming media is surging as stay-at-home orders and social distancing policies are dramatically boosting the use of many online services, including streaming media, virtual private networks (VPNs), online gaming, cloud computing applications, and more.

Usage of cloud platforms and streaming media is surging as stay-at-home orders and social distancing policies are dramatically boosting the use of many online services, including streaming media, virtual private networks (VPNs), online gaming, cloud computing applications, and more.

“This is an extraordinary period in Internet history,” says Akamai CEO, Tom Leighton, placing the COVID-19 traffic impact in historic terms. “I’ve been looking at traffic graphs for over 20 years now and I can’t recall seeing anything like this,” said Leighton. Akamai saw global traffic on its platform grow 30% in March. Tpeak traffic on Akamai’s Edge platform doubled in March from a year earlier, soaring to 167 Tbps from 82 Tbps.

SOME DATA POINTS

At the end of December 2019, the maximum number of daily meeting participants using Zoom was 10 million. In March 2020, Zoom reached more than 200 million daily meeting participants.

Schneider Electric expects around $325 million in lost revenue due to factory closures.

Akamai saw global traffic on its platform grow by 30% in March. The peak traffic on Akamai’s Edge platform doubled in March from a year earlier, soaring to 167 Tbps from 82 Tbps.

Content delivery network Fastly reports that the surge of traffic is having a side-effect in the form of slower download speeds in the busiest markets. “Based on our regional analysis, we can confidently say that the Internet is holding up quite well despite experiencing a persistently increased load—handling traffic increases upwards of 40% in some cases, despite speed reductions,” the Fastly team writes. Meanwhile, business has evaporated for airlines, cruise companies and movie theaters. IT investment in the coming months will closely track the fortunes of each business vertical.

“The upside cases are actually higher than any of the drawdowns coming in from the troubled sectors,” said Badri during a CAPRE presentation. “These troubled sectors were not big customers in the first place, whereas the newer industries that represent a large cash flow stream for data centers are flexing even larger than they ever have before. This is creating a new high-tide environment for demand for the overall tech sector.”