Is Indiana Ready for The Data Boom?

Is Indiana Ready for The Data Boom?

More companies than ever are asking questions about what they’re going to do with all of their data. It’s a critical resource that never stops accruing both in quantity and value, and a company’s success or failure often depends on its integrity. That had us wondering about what the future of data markets in Indiana will look like over the next few years. Where is the growth happening and what’s driving it? Are we well-positioned to capture the benefits?

 

Exponential Data Growth

The IDC (International Data Corporation), a market research firm, estimates that by 2025, the world will be generating about 175 zettabytes of data every year. That’s a ridiculous number, about a trillion gigabytes. Think of it this way: if you copied all that data onto DVDs, then you would have a stack of DVDs that could get you to the moon 23 times, the IDC said.

Also, the pace of this expansion is never expected to slow down – especially here in Indiana. One big example would be from the manufacturing sector, which comprises about 28% of our total economic output, according to National Association of Manufacturers (NAM).

The IDC predicted that by 2021, up to 20% of Forbes’ Global 2000 manufacturers will have transitioned to intelligent manufacturing, which is a methodology largely dependent on data and internet-connected systems. This is expected to help manufacturers reduce execution times by up to 25%, driving profitability. Of course, it will also significantly increase the need for data storage.

 

Large Firms are Outsourcing

All of that data will have to be stored somewhere. Every day, more companies outsource their storage to cloud-based data centers. These large, typically non-descript buildings are essentially warehouses filled with hundreds of servers that house every imaginable type of data for companies that have leased space in them.

Individually, these are relatively expensive facilities to own and operate privately. In the past, it might’ve been common for large companies to have their own data centers, but today it’s much cheaper to contract cloud storage space from another organization.

Gartner Inc., a research and advisory company, estimated that as many as 80% of large companies in North America will have shut down all of their individually owned data centers by 2022, up from 10% in 2017. For example, last year Cisco announced it was considering shutting down up to a third of its own data centers over the next five years and utilizing more cloud services.

 

Indiana’s Competitive Edge

Globally, the data center market is expected to grow at a compound annual growth rate (CAGR) of 2% between 2019 and 2025, reaching annual revenues of over $193 billion, according to a recent report published by Artizon, a market research firm.

The report also found that “major factors driving the data center market are the availability of tax incentives, renewable energy sources, and a reliable electricity supply.” Authors noted that “data center growth has been concentrated in countries that offer tax incentives,” giving the state a very competitive edge.

Indiana is uniquely geographically positioned to take advantage of these growth opportunities. A good example of this is the recent establishment of the Digital Crossroad data center in Hammond, IN. It has a conjunction of all three of the major factors that are driving data center growth:

  • The center sits next to an electrical substation, so it has a reliable electricity supply
  • Local utility provider NIPSCO has announced plans to switch fully to renewables over the next few years
  • The state also recently passed what’s been called the “most aggressive” data center tax incentive package in the country, including provisions such as business personal property tax and state sales tax exemptions for equipment, sales tax exemptions on electricity, and additional exemptions for construction costs

Those combined elements are expected to draw investment from technology companies potentially from all over the world, fueling Indiana’s statewide data center market. A recent example would be Overwatch Mission Critical, an Austin, TX-based strategic data center consulting firm that has joined up with Digital Crossroad.

“We’ve joined forces with Digital Crossroad because this project has the power to disrupt the industry and perceptions. This program represents a massive transformation for Indiana, from an industrial manufacturing state to a technology hub that can compete measurably in the marketplace,” said Kirk Offel, managing partner with Overwatch Mission Critical.

 

Indiana is Definitely Ready

Everything about the data center market in Indiana indicates a successful opportunity for the state. We know that storage demand is increasing from potential data center customers and we know the state offers almost all of the benefits that enable data center success. If all goes well, we should certainly be able to capture a large piece of that $193 billion pie in the coming years.

Category Features, IT & Tech