Three Key Challenges Facing Data Centers in 2023

    Alpesh Saraiya, senior director, data center offering management, Honeywell Building Technologies

    Around the world, we are seeing an unrelenting demand for the storage and processing of data. Meeting these needs can make it challenging to efficiently operate and scale data centers, which play a critical role in keeping the global economy productive. Not only this, but data center managers also face mounting pressure to make data centers more energy efficient. Data centers alone consume about 3% of the world’s electricity, which is more than most countries, and produce 2% of global carbon emissions – nearly the same as the entire airline industry[i].

    While dealing with increasing demands, managers are often expected to do more with less while simultaneously coping with tougher ESG directives and more stringent regulatory landscapes. Data center operators need to factor in three significant trends: the pressure to cut operational costs; an increasing demand for more sustainable facilities; and a growing shortage of talent.

    Rapid scaling with a sharp focus on managing OpEx

    To meet the demand, hyperscale and colocation data center operators have moved to acquiring smaller firms – this practice can create as many problems as solves. For one, it creates a pastiche of ‘snowflake’ designs where no two are exactly alike, which can mean major headaches for integrators and heftier operating expenses (OpEx) for owners.

    Blueprinting data center designs to achieve commonality across facilities is an essential strategy for ‘doing more with less.’ While many see it as a critical step toward developing and implementing global design standards, operators must still comply with stringent building codes, financial accounting laws and security regulations.

    Data center managers are also streamlining their operations with well-defined, purpose-built workflows and operational management tools to reduce OpEx while protecting uptime. Some are installing cross-domain, site-level monitoring and management platforms to automate as many tasks as possible, helping ease workloads while reducing the chances for human error.

    Tougher internal and external sustainability mandates

    Data centers face mounting pressure from governments, clients and stockholders to become more sustainable and energy efficient. A sustainability strategy is no longer a 'nice to have;' in the future, it may determine whether an operator succeeds or fails. With financial firms serving as both clients and providers of capital, operators will face a hurdle of expectations from firms when looking to fund future projects, as pressure increases on private equity and real estate investors to make greener investments[ii].

    In some regions, governments require owners and operators to submit detailed sustainability plans before being granted approval to build a new facility or expand an existing one. In Singapore, for example, applicants for new projects must explain how they will meet new standards enacted to protect the nation’s land, water and renewable energy resources. Governments around the world also expect data centers to measure and disclose their carbon footprint and demonstrate progress toward reductions.

    There are numerous ways to reduce carbon emissions – no one size fits all – but the cost and new technologies usually factor into the equation. Among these, operators are evaluating various energy optimization techniques, from control loop optimization to liquid cooling options, especially as high-performance computing (HPC) and AI/ML applications become more ubiquitous and more demanding in heat dissipation requirements. Air cooling systems can’t keep up with the cooling needs of continually evolving, higher-density racks for these next gen workloads.

    The human element: a looming talent shortage

    Not least among data center challenges is a widening skills gap and the ongoing ‘great resignation.’ The industry is facing a conflagration of events with regards to talent: lack of effective talent recruiting and retention and an aging workforce of subject matter experts. Many experts qualified to train entry-level employees are expected to retire within the next 10 years. Yet Gen Z workers who have the skills and aptitude to pursue such a career are not seeing careers in data centers as an attractive option. In efforts to counteract these challenges, the industry has launched promising initiatives to source candidates from a pool of disciplined and well-qualified military veterans.


    Data center operators should consider strategies for scaling up intelligently, reining in OpEx and prioritizing sustainability efforts. They should also take a hard look at how they can make the profession – and their facilities – more attractive to the next generation of talent. Talk to one of our data center experts today to learn how to manage these challenges.

    [i] Deloitte, Big data or low carbon? Can you deliver more IT with less carbon impact?, by Richard Pone, April 22, 2019. [Accessed November 10, 2022]

    [ii] S&P Global, , by Kelly Morgan and Filippo Bonanno, June 8, 2022. [Accessed November 10, 2022]