ANALYTICS
BY KIERAN CLARK
DATA CENTERS, THE CLOUD AND THE SUBMARINE CABLES THAT CONNECT IT ALL
T
he world has gone through an unprecedented disruption with the COVID-19 pandemic. This has both caused a huge increase in capacity demand as people work from home and companies rely even more on cloud services, and also a disruption in the submarine fiber industry’s ability to produce new systems and maintain existing ones. Stringent quarantine procedures have hampered all maritime operations, adding weeks or even months to a project’s timeline. It is very likely that a number of cable systems and data center facilities that were planned for this year and next year will be pushed back a year or more as suppliers struggle to deal with the sudden backlog, economic downturn and worker safety issues. While this temporary lull in activity is negative for the short-term, there are a number of long-term benefits that can be realized due to the global pandemic. Remote collaboration and enterprise cloud service providers have seen a large increase in bandwidth requirements since the pandemic started earlier in 2020. As Eric Handa and Sean Bergin discussed in the May issue of SubTel Forum, traffic for collaboration tools was up over 350% with Zoom alone up over 800% during the peak of the global pandemic. (Handa & Bergin, 2020) However, while there has been an overall influx of demand for cloud
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SUBMARINE TELECOMS MAGAZINE
services – especially on the enterprise level – many small and mid-size businesses have been shutting down, either temporarily or permanently, dragging down cloud revenue. (Omdia, 2020) As people get used to this new normal of virtual interactivity, demand for bandwidth and cloud services will only continue to skyrocket and drive the need for additional submarine cables and data center facilities.
market in Europe is expected to grow at a CAGR of 4 percent during the period 2018-2024. (Arizton, 2019) Capacity along Transatlantic routes will increase at a CAGR of 22.7 percent over the next several years. (Submarine Telecoms Forum, Inc., 2020) Based on current projections, total capacity along Transatlantic routes will increase from 652 Tbps in 2020 to 3027 Tbps in 2025.
GROWTH DRIVING GROWTH
The growth of data center capacity correlates to submarine cable capacity growth with a coefficient of 0.98. This indicates that data center capacity growth in Europe markets directly
According to the European Commission, by end 2020, data centers in Europe will use 259 TWh of electricity. (Garris, 2018) The data center