With the rise of the cloud, social media, and IoT, more companies are adding data centers to their operations. Green data center investment is an important trend in the industry that aims to help data center operators reduce energy consumption, achieve lower carbon emissions and make their facilities more sustainable. How do you select a green data center investment partner?
Data Center Investment is a Longterm Investment
The data center is the backbone of today’s digital society activities. The need for data centers continues to grow. Thus, the data center market, estimated to rise above 9% per year, will continue until 2035.
We must remember that investing in the data center is a long-term investment. Data center development usually takes 1 to 2 years. The grace period is about two years. Thus, you have to spare 3 to 4 years.
As the demand for more energy-efficient data centers increases, more and more businesses are looking to invest in green data centers. Green data centers help companies to save money on energy and maintenance costs, reduce carbon emissions, and meet current and future energy demands.
But green data center construction is a new concept. As a result, businesses must be aware of the pitfalls of investing in green data centers.
There are many factors to consider before making a data center investment, like the green data center. Many factors, including the cost of data centers, take much work to predict. And it is hard to determine whether multiple factors will positively or negatively affect your investment.
The Green Data Center investment partners can help you get around these difficulties. One of the most critical factors in selecting these partners is ensuring they are technologically advanced and innovative in assisting you in your data center investments.
Green Data Center Investment is a Sustainability Investment
One of the most critical decisions a business must make is who will provide their data center facilities. Partnering with the right provider can help your company reduce costs, increase efficiency and support high-quality, reliable business processes.
To choose an appropriate facility that meets your business needs, it’s essential to take into consideration the following criteria:
- The location should be strategically situated.
- The provider should have a track record of success in providing critical services and maintaining high-quality standards.
- A provider should be flexible enough to adapt to your business needs as they change in response to market conditions and technology trends.
If the investor’s business field is from something other than the information technology sector, then the investor should fully entrust the partner who will build and operate the data center. Information technology investment differs from different fields, such as the property sector.
The property of investors working in the data center industry is those who have previously gone through a long road in the field of data center investment, for example, digital realty.
However, property investors can work together in the data center business. The problem is that the calculation of the property business, in general, is very different from the purpose-built property as the backbone of the digital industry.
Data Center Demand Keep Rising, but They’re Turn into Green Data Center
The need for digital infrastructure in Indonesia is still relatively high. The existing data center market for data centers in Indonesia is the local market, with many from Europe and the United States. This is because the cost of electricity in Indonesia is still relatively cheap.
However, companies in these countries only want to use data centers that are more environmentally friendly. This is because the awareness that the future of the earth in developed countries is already much higher.
This growing demand will have a lasting impact on the way companies maximize their efficiency and minimize their environmental footprint. With rising power costs, business and government leaders seek new ways to improve their green data center strategy. In addition to reducing energy consumption, sustainable design can increase a facility’s longevity and reduce its carbon footprint for decades.
However, we must consider several factors before choosing a green data center investment partner.
Tips on How to Select Data Center Investment Partner
In investing in the data center industry, investors are usually known as data center real estate investors, but real estate here is very different. You have to learn more about the data center industry and its problems in carrying out critical missions, environmental issues, and other developments to become a data center real estate investor.
Or, you can partner with parties who already have high experience in the data center industry and have a location to build a data center because the site is also the most crucial factor in the success of a data center.
The following are some tips for selecting an investment partner to build your green data center:
- Select an investment partner that has built some successful data centers. A company without a track record of building a data center will likely face problems.
- Make sure the investment partner has experience working with others in your industry. The investment partner’s knowledge of your industry will allow them to build a sustainable, efficient, cost-effective data center.
- Look for an investment partner with experience creating innovative solutions that work within the confines of the design of your existing buildings. Experience means the company is likely to have encountered similar problems that might arise as you begin construction on your new project.
Why Do Investors Have to Make a Decision Right Now?
The world is in a transition period. From the pandemic to the new normal, the need for digitalization has increased dramatically more than in previous years.
In addition, the use of fossil energy will gradually stop because it contributes billions of tons of carbon emissions. During the transition from fossil energy sources to cleaner energy, the use of liquefied gas for electricity generation can reduce carbon emissions by up to 50%.
Currently, Europe and the United States are facing an energy crisis. As a long-term solution, they started building a renewable energy power plant. The problem is, will the construction of the renewable energy generator be able to meet the electricity needs of the entire industry? And the time needed is also quite long to build a 100 MW solar plant, about ten years.
Meanwhile, in Indonesia, energy use is still much lower than its neighbors in South East Asia. In fact, in 2022, Indonesia experienced a surplus of electricity supply of more than 9 Giga Watts. This is enough to power 90 large-scale data centers.
We can balance this condition by building a green data center in Jakarta, Indonesia. Companies in Europe and the United States can use the data center as their disaster recovery center. Using a data center in Indonesia, the US, and European companies can reduce their IT infrastructure costs from 30% to 50%.
Therefore, there is still enough time to build and implement everything. However, the time to make that decision is now.
A Real-estate investors who are inexperienced in investing in the data center industry should understand that investing in a data center is not just an investment that forms a portion, but location and experience are the goodwill that most contribute to the success of a data center business.
You can speed up the learning process in this industry if you get the right partner. Do not let the “Gold” you are looking for, but a “Diamond” be missed.
Conclusion
The world’s data center needs are rising: the International Data Corporation reports that global IT spending will increase 5.6 percent this year to $3.7 trillion and that worldwide demand for data centers is expected to rise by 9.3 percent. However, many businesses are shifting their focus from technology to environmental impact.
The latest trend in the data center industry is shifting toward renewable energy. Two main factors have driven this shift: First, the general public’s demand for cleaner energy, and second, the legislation supporting clean energy.
Many investors are interested in investing in the data center industry. As real estate investors are experiencing a sharp decline in demand due to the worldwide economic recession, many are interested in starting to invest in the data center industry.
Unfortunately, this data center field is different from other commercial real estates. The data center is the digital economy’s backbone, carrying out critical missions without stopping as efficiently as possible. This is a more prolonged investment. The rate of return on investment is within more than ten years. Therefore, if we don’t start now, it will take much longer, and investors’ funds will continue to settle at interest rates which are quite volatile and not at all satisfactory.
You don’t need to gamble for investment in the data center field; find a partner with a location and experience building, operating, and developing a data center and its businesses.
This is also an essential factor in the inclusion portion. So, in the data center field, the percentage of participation is based on something other than nominal value unless you have wanted to learn about the ins and outs of data center technology and its business for over ten years.