Micro Data Centers: the Future of Computing


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The evolution of technology – and the pace at which changes have occurred – is something to behold. Indeed, it was only 33 years ago that the world’s first web server was developed. Today, millions of servers exist worldwide, many of which are hidden away in server farms and data centers.

However, these data centers are struggling to meet increased demands in volume, performance, and efficiency required to support many applications, particularly artificial intelligence (AI), machine learning, deep learning, and the Internet of Things (IoT).

As industries increasingly rely on data for their daily operations, it’s likely that we’ll see an explosion of “micro data centers” – smaller versions of a traditional data center, but with the storage, compute, networking, cooling, and power infrastructure found in a typical data center.

What is a Micro Data Center?

Micro data centers are what they sound like: small versions of a traditional data center operation. They have a smaller footprint and might look more like a school locker compared to those found in vast server farms. However, micro data centers still have features found in traditional data centers, such as cooling systems, security, humidity sensors, and a continuous power source.

Part of the benefit of these scaled-down data centers is that they can be deployed essentially anywhere – from a remote site off the beaten path to a small room in a hospital. For example, they might be used in an office to help run corporate apps locally while supporting connectivity. In fact, many micro data centers deployed in an office setting only require one “locker.”

A micro data center could also be deployed in a retail store to help run security systems, cash registers, and other logistical processes. It could also help retailers capture and analyze customer data in real-time to help with personalized advertising and marketing.

Similarly, modern banks could install micro data centers to help create a more seamless financial customer experience. While many banks have come to rely on cloud-based technology to support their operations, they often experience bandwidth and latency issues that interrupt workflows. Micro data centers, however, bring computing power and additional IT capacity closer to users, leading to enhanced performance, efficiency, and reliability

Benefits of Micro Data Centers

Among the many benefits of micro data centers is greater scalability compared to traditional data centers. They offer the ability to scale up or down as needed, and can more easily accommodate growth as the need for more computing power arises. For instance, they can easily adjust all kinds of equipment to facilitate future upgrades and even re-architecture of the environment.

Similarly, micro data centers can be deployed at greater speeds than large-scale traditional data centers. Organizations can implement micro data centers rapidly to meet changing demands, while avoiding expensive infrastructure changes or data center build-outs. In fact, because of its modular design, micro data centers can be installed anywhere that high-speed connectivity is available.

Furthermore, micro data centers reduce operating costs and are more cost-effective in general, given that they are prefabricated and much smaller than traditional data centers. One report noted that micro data centers can yield a cost reduction of 50 percent over a traditional data center under ideal circumstances. Part of this savings comes from a micro data center’s ability to tap into an existing facility’s electrical power to operate its equipment.

The Connection Between Micro Data Centers and Edge Computing

While micro data centers and edge computing are often used interchangeably, they aren’t the same thing. Edge computing is a technology or model that brings data processing and storage capabilities closer to the data source, so that businesses don’t have to rely on centralized data centers. A micro data center, however, is a type of data center that powers edge computing in a real-world setting. In other words, it’s the physical data center at the network’s edge that performs computation and storage.

Micro data centers are ideal for edge applications that require the real-time processing of vast amounts of data. They’re particularly beneficial for applications such as Industry 4.0, smart manufacturing, 5G, IoT, self-driving vehicles, smart cities, smart hospitals, robotics, drones, and more. Many companies operating in this space have found that the cloud and centralized data centers are no longer effective, due to latency and bandwidth issues.

However, by moving data processing and storage closer to its point of origin, the amount of time it takes for data to travel is significantly reduced. This ultimately results in lowered latency, faster response times, quick and deeper insights, and improved performance.

Furthermore, security has become a significant concern for organizations due to the sensitive nature of the data that’s being generated. Micro data centers offer a more secure architecture that reduces the chance of compromise.

Future Outlook for Micro Data Centers

Gartner estimates that 75 percent of enterprise-generated data will be processed outside of the cloud or a traditional centralized data center by 2025. Micro data centers are likely where most of this will occur as it provides proximity to enable edge computing.

Another report estimates that the global micro data center market – which was estimated at $4.7 billion in 2022 – will reach $14.2 billion by 2030, growing at a compound annual growth rate of nearly 15 percent from 2022-2030.

The rise of 5G in particular makes it likely that many companies will need the processing resources of micro data centers. Given that micro data centers don’t require specialized buildings and can be installed anywhere, we’re soon likely to find ourselves surrounded by them on main street USA and around the world.