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Use of Renewable Energy in Powering Data Centers in Emerging Markets

  • October 2014
  • 53 pages
  • Frost & Sullivan
Report ID: 2432019

Summary

Table of Contents

Does Your Green Footprint Strategy Leverage Emerging Market Potential?

Executive Summary

- Emerging markets with both, high and low levels of data center presence and a high level of planned renewable energy investments are target locations for data centers powered by renewable energy. Ten such emerging markets are listed.
- Country case studies: Indonesia and South Africa. Huge growth in information technology demand, coupled with high planned future investments and government mandates for renewable energy make these countries attractive markets for green data centers.
- Certain macroeconomic and demographic factors of emerging markets drive the demand for information technology and, hence, data centers. In the renewable energy sector, characteristics such as new investments in renewable energy generation and grid infrastructure, government policies, and mandates propel green data centers.
- An unprecedented growth in urbanization, especially in emerging markets, is expected to drive the development of smart cities. Smart cities require the local presence of data centers without environment degradation—which make them an ideal option to establish green data centers, while leveraging local demand for information technology.
- Data center service demand is expected to grow from x% in 2011 to x% in 2020, due to global IP traffic, which is predicted to rise by x% from 2013 to 2018. Given the high energy consumption and emissions, data centers are turning toward renewable energy to meet sustainability goals.
- Green data center initiatives are concentrated in developed markets. This is primarily because emerging markets are challenged with accessibility to power and high energy costs. What prospects do these emerging markets then hold for data center expansion in the future?

What are Mega Trends and Economic Insights Micro Booms?

Mega Trends are global, sustained, and macroeconomic forces of development that affect businesses, economies, societies, cultures, and personal lives, thereby defining our future world and its increasing pace of change. Time frames for Mega Trends are from the current year to x years out.
Contributing to these Mega Trends are many smaller but equally compelling trends that are defined in the time frame of x– years and can offer immediate opportunities for companies that know how to identify and capitalize on them. Economic Insights Micro Booms serve to convert data models into actionable insights, capturing growth prospects in emerging markets. The Frost & Sullivan EMI team highlights these Micro Booms and the opportunities they present.

What Will We Be Looking Into?

Profit insight: What should I do about it? This segment details the following:
- What are my near-adjacent market opportunities in emerging markets?
- How should I package my products to achieve improved margins?
- What should the go-to-market and service strategies be in emerging markets?

Growth insight: Why should I care? This segment details the following:
- What is the market potential of emerging markets and its growth trajectory?
- How is the competitive landscape situated?
- What are the pockets of growth opportunities in such markets?
- What are the near-adjacent areas of opportunities in emerging markets that solution providers can leverage?

Business insight: What is it? This segment details the following:
- What are emerging markets about?
- Why invest in emerging markets?
- Which issues and challenges of emerging markets should I be aware of?
- What is the current market state, and where is it headed?
- What are the critical attributes of success within the emerging markets?

Research Methodology

- emerging countries whose 2013 per capita GDP was not less than $ x were selected.
- These countries were studied on the basis of their performances in the ICT and the renewable energy sectors. Industry growth parameters such as growth in the number of Internet users, and growth in electricity generation from renewables were considered for a 5-year span, from 2008 to 2013. Other indicators considered for ranking these countries were data center presence, quality of grid infrastructure, renewable energy present scenario and future investment, and government mandates for renewable energy.
- Besides these industry indicators, other important macroeconomic and demographic indicators such as household consumption expenditure, middle class population, young population, and number of tertiary graduates—which act as demand generating factors for the ICT sector—were taken into consideration and studied on a 10-year timeframe.
- Qualitative research was done on the present political scenario and business environment of these countries.
- After ranking the x countries, 2 sub-categories were selected to come up with x final countries.
oCountries with high IT demand, low presence of data centers, and high targets for renewable energy sector: x countries selected in this category
oCountries with high IT demand, high presence of data centers, and high targets for renewable energy sector: xcountries selected in this category
- Both these categories of countries can be target locations for data center expansion, powered by renewable energy.

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