The last three years have been a whirlwind for Wesco’s data center business.

Our 2020 merger with Anixter combined Wesco’s capabilities in industrial, construction and utility with Anixter's expertise in communications, security, and wire and cable, resulting in a premier electrical, communications and utility distribution and supply chain solutions company.

Additionally, last year’s acquisition of Rahi, a leading provider of global hyperscale data center solutions, resulted in global coverage and enhanced our full suite of data center solutions for contractors, integrators and end-user customers.

Today, in collaboration with our expansive supplier and partner network, Wesco is equipped to service the entire data center lifecycle – from design and procurement, to safety gear and security, all the way to rack-and-roll – for hyperscale, multi-tenant data center providers and enterprises, anywhere in the world.

Given Wesco’s unique vantage point, here are the three trends we expect to impact the data center market in 2024 and beyond.

Trend one: Artificial intelligence (AI)

It’s no secret that AI is driving a new era of data center industry demand. Many existing data centers, including multi-tenant data centers, will have to be upgraded to handle the processing requirements of AI. In addition, companies are expected to increase spending on hyperscale data centers by 20 percent.

AI doesn’t just demand newer equipment or more space; the heat created from these new technologies requires data centers with liquid cooling capabilities.

Some data centers will be able to be retrofitted to implement data cooling. However, the long timelines and inherent revenue losses required for retrofitting means the majority of these modern data centers will have to be built from scratch.

Companies that can implement flexible data center infrastructure strategies will be best positioned to harness this AI revolution, resulting in outsized growth.

Trend two: Power generation

AI and other rapid technological innovations, from Internet of Things devices to 5G, are requiring modern data centers to use a record amount of energy. In fact, McKinsey projects that data center demand will reach 35 gigawatts by 2030, up from 17 gigawatts in 2022.

Unfortunately, today’s grid is not equipped for the needs of tomorrow’s data centers – especially in rural areas, and in many overseas locations. Therefore, we should expect to see grid modernization efforts continue in earnest in 2024 in order to meet demand.

Modernization will require the construction of more transmission lines, as well as more efficient and effective coordination of multiple energy sources – for example, the combination of a renewable energy source, such as solar, with fossil fuels, which are more reliable around-the-clock.

We should also see a greater convergence of markets, with the utilities, independent power producers, hyperscale and renewable developers all working together to build infrastructure. A more flexible grid will be better equipped to anticipate and handle surges in demand.

Trend three: Automation

This rapid technological evolution in the data centers market will also demand increased automation. Additionally, automation is becoming even more urgent in the face of the current credit crunch and labor shortage; indeed, companies in every industry are under pressure to achieve higher productivity and efficiency with fewer resources.

Data center automation already exists in many forms, including scheduling, monitoring, maintenance, application delivery and troubleshooting inefficiencies in networks and infrastructure.

Such automation gives workers more time to focus on critical, higher-value tasks, further accelerating data center modernization. This automation trend will continue in 2024, in the pursuit of increased data center agility and operational efficiency.

A quickly evolving market, ripe with opportunity

The past year has marked a swift and dramatic evolution in the data centers market, reflecting the breakneck speed of the technological innovations that lie behind it.

Wesco looks forward to staying at the cutting edge of these trends for our customers in 2024 and beyond – offering them a wider variety of services, more products and solutions, and more focused data center expertise than anyone else so that they, too, can capture all the opportunities that lie ahead.

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