Next generation data center architecture is expected to play a pivotal role, with global data center capacity currently at 50 gigawatts (GW) and anticipated to double to 100 GW within the next 6 to 10 years. Innovative next-gen data center designs will underpin this growth, providing the necessary compute, storage, and network infrastructure to support these demanding requirements.

Next generation data centers are computing facilities that utilize automation, software-defined control, and advanced technologies to deliver superior efficiency, scalability, and security for data and applications. In simpler terms, they are data centers built for the needs of the cloud and AI era.

Dgtl Infra explores next generation data centers and their growing importance in the future of digital infrastructure. We review the key differences between next-generation and traditional data centers, highlighting the advantages of the former. Additionally, we take a closer look at the architecture of next-generation data centers, discussing the crucial components that set them apart, including modular designs, software-defined infrastructure, energy efficiency, high-density IT, edge computing, AI and ML, and quantum computing.

What Is a Next Generation Data Center?

A next generation data center is a modern, advanced computing facility designed to efficiently store, process, and manage large amounts of data. These next-gen data centers utilize cutting-edge technologies such as virtualization, cloud computing, and software-defined networking (SDN) to provide scalable, flexible, and highly available computing resources. Next generation data centers focus on energy efficiency, automation, and security to meet the growing demands of digital transformation and the increasing reliance on data-driven applications.

Next Generation Data Center Facility with Lights Reflecting Off Server Racks and Cabinets

Importance of Next Generation Data Centers

The following factors collectively contribute to the importance of next generation data centers in meeting the evolving needs of modern businesses:

  1. Scalability and Flexibility: Next-generation data centers are highly scalable and flexible, allowing organizations to adapt to ever-increasing data demands and business needs. Through resource pooling, they can quickly allocate compute, storage, and network resources and scale up or down based on demand, using technologies like cloud computing, virtual machines (VMs), and containerization, to deliver optimal performance and cost-efficiency
  2. Energy Efficiency and Sustainability: Next generation data centers prioritize energy efficiency and sustainability by employing innovative cooling technologies, such as free air cooling and liquid cooling, utilizing energy-efficient hardware, and integrating renewable energy sources like solar and wind to minimize their carbon footprint. Their commitment to sustainability is demonstrated by achieving best-in-class Power Usage Effectiveness (PUE) and Water Usage Effectiveness (WUE) metrics, key benchmarks for energy and water efficiency in the data center industry
  3. Enhanced Security and Compliance: Next-generation data centers prioritize robust security measures and data privacy. They incorporate advanced security technologies, such as encryption, access controls, and intrusion detection systems (IDS), to protect sensitive data and deliver compliance with industry regulations like GDPR, HIPAA, and PCI-DSS
  4. High-Performance Computing (HPC): As organizations increasingly rely on data-intensive applications and technologies like artificial intelligence (AI), machine learning (ML), and big data analytics, next generation data centers provide the necessary high-performance computing (HPC) capabilities. They offer powerful servers like graphics processing units (GPUs), fast storage systems such as all-flash arrays (AFAs), and low-latency networks like Ethernet fabrics, to support these demanding workloads
  5. Edge Computing Support: Next-generation data centers support edge computing, which brings data processing closer to the source of data generation. By enabling edge computing, these data centers can reduce latency, improve data processing speed, and enhance the performance of applications that require real-time processing, such as IoT devices and autonomous vehicles, enabling new services and use cases
  6. Automation and Intelligent Management: To streamline operations and reduce human error, next generation data centers heavily rely on automation and intelligent management systems. They utilize software-defined infrastructure, artificial intelligence, and machine learning to automate tasks such as resource provisioning, workload optimization, and failure detection. This results in improved efficiency, reduced downtime, and better overall data center management

Next-Generation Data Center vs Traditional Data Center

Next generation data centers are designed to handle the rapidly growing demands of modern computing and applications in an automated fashion, focusing on rapid deployment, scalability, and efficiency. In contrast, traditional data centers are built using older technologies and architectures, often relying on more manual processes and siloed hardware components.

Next-Generation Data Center versus Traditional Building Structure Glows Light Glass Architecture

Below is a comparison of the key differences between next-generation and traditional data centers.

AspectNext-Generation Data CenterTraditional Data Center
ArchitectureHighly virtualized and software-definedHardware-centric and monolithic
DeploymentRapid provisioning and deployment with automation and orchestration toolsSlow provisioning, using manual processes
ScalabilityHighly scalable; easy expansionLimited scalability; fixed infrastructure
EfficiencyOptimized for energy and spaceLess efficient
ComputeVirtualized and containerizedMostly physical servers
StorageSoftware-defined storage (SDS) and hyper-converged infrastructure (HCI)Siloed storage systems such as SANs and NAS
NetworkingSoftware-defined networking (SDN)Physical switches, routers, and firewalls
Cloud IntegrationCloud-native and hybrid cloud-readyLimited cloud integration
ResilienceHigh availability and fault tolerance built-inRequires additional hardware for resilience
ManagementCentralized and policy-drivenDecentralized and manual
SecurityIntegrated and adaptive securityPerimeter-based security

Next-Generation Data Center Architecture

Next generation data center architecture involves the specific design elements and technologies that characterize the infrastructure of modern, advanced data centers.

Next-Generation Data Center Architecture Building Structure Glowing Reflective Design Exterior

Key aspects of next-gen data center architecture include:

1. Modular Designs

Next generation data centers utilize modular architectures and components, including prefabricated units and containerized structures. These self-contained building blocks house compute, storage, power, and cooling infrastructure, allowing for:

  • Scalability: Modular data center designs allow for easy expansion and adaptation to changing capacity requirements, enabling organizations to scale their infrastructure and services as needed without significant disruption
  • Flexibility: Modular data centers can be quickly reconfigured to accommodate specific workload requirements, such as high-density computing or storage-intensive applications
  • Rapid Deployment: Prefabricated, modular components can be assembled and commissioned much faster than traditional data center builds, shortening the time to market for new services and applications
  • Cost-Effectiveness: By using standardized, pre-fabricated components, modular data centers can reduce capital expenditure (CapEx) and operating expenses (OpEx) associated with building and maintaining custom data center facilities. In addition, they enable reduced on-site construction, which provides better predictability in terms of budget

2. Software-Defined Infrastructure

Next-generation data center architecture is centered on a software-defined approach where the infrastructure components (compute, storage, and networking) are virtualized and managed through software.

Software-Defined Infrastructure Data Center Servers Glow Lights Technology IT Hardware Digital

More specifically, this element is implemented through:

  • Software-Defined Networking (SDN): Separation of the control plane (where network rules reside) from the data plane (where traffic forwarding happens). SDN allows for centralized, programmable network management and automation, all through software rather than manual hardware configuration
  • Software-Defined Storage (SDS): Abstracting storage resources from their underlying hardware, which improves storage flexibility and efficiency. This enables centralized storage pool management, provisioning of storage on-demand, and features like data replication and tiering
  • Software-Defined Compute: Hypervisors are the foundation of software-defined compute. They allow multiple virtual machines (VMs) to run on a single physical server, each with its own isolated resources (CPU and memory)
  • Containerization and Orchestration: Utilizing container technologies like Docker and orchestration platforms like Kubernetes to deploy and manage applications and services across the data center infrastructure, which is vital for speed and innovation

3. Energy Efficiency and Sustainability

Next generation data centers prioritize the design and deployment of infrastructure that minimizes energy consumption and environmental impact. More specifically, this approach is implemented through:

  • Cooling Systems: Next gen data centers employ innovative cooling methods like liquid cooling, free air cooling, and airflow management techniques like hot/cold aisle containment to minimize energy consumption for cooling
  • Renewable Energy Sources: Next-gen data centers are increasingly integrating on-site solar or wind generation. They also engage in power purchase agreements (PPAs) to directly source electricity from large-scale renewable energy projects
  • Energy-Efficient Hardware: Next gen data centers utilize energy-efficient servers, storage devices, and networking equipment that consume less power and generate less heat, reducing overall energy requirements. In addition, highly-efficient uninterruptible power supplies (UPS) and power distribution units (PDUs) help minimize energy wasted in power conversion and distribution
  • Waste Heat Utilization: Instead of simply expelling heat, next-gen data centers implement systems that capture the heat generated by IT equipment and repurpose it for other uses. This can be used for heating on-site facilities, or even supplied to nearby buildings and district heating systems
  • Nuclear Power: Next gen data centers are exploring nuclear power to meet the demands of their energy-intensive operations, using small modular reactors (SMRs) to generate reliable, low-carbon electricity on-site. SMRs are compact, factory-built nuclear reactors that are transported and installed, offering a safer and more efficient alternative to traditional large-scale nuclear power plants

4. High-Density IT Infrastructure

Next-generation data centers often deploy high-density IT infrastructure, including servers, storage systems, and networking equipment, in a smaller physical space to maximize computing resources, while minimizing the data center footprint.

Meta Platforms Facebook Data Center Aisle Between Rows of Server Racks and Cable Management Infrastructure
Source: Meta Platforms.

More specifically, this high-density IT infrastructure is implemented in the following ways:

  • Blade Servers: Next generation data centers deploy blade servers that pack a large number of processing units into a compact chassis, increasing compute density per rack unit
  • Accelerated Computing: Next-generation data centers leverage specialized hardware accelerators, such as GPUs (Graphics Processing Units), ASICs (Application-Specific Integrated Circuits), and FPGAs (Field-Programmable Gate Arrays), to handle compute-intensive workloads like AI, machine learning, and high-performance computing (HPC) more efficiently than traditional CPUs
  • High-Capacity Storage Systems: Storage solutions, such as all-flash arrays (AFAs) and high-density disk enclosures, enable next gen data centers to store massive amounts of data (e.g., petabytes) in a smaller footprint
  • High-Speed, Low-Latency Networking: Next-generation data centers employ high-bandwidth, low-latency networking technologies, such as 100/400 Gigabit Ethernet and InfiniBand, to enable efficient communication between high-density compute and storage nodes

5. Edge Computing Integration

Next generation data centers incorporate distributed computing resources, such as micro data centers and edge data centers, located closer to data sources and end users, to complement centralized data center capabilities. This integration is important for the following reasons:

  • Latency Reduction: Edge computing brings data processing closer to the source, reducing the latency associated with sending data to centralized data centers. This enables faster, real-time processing and decision-making for latency-sensitive applications
  • Bandwidth Optimization: By processing data at the edge, the amount of data transmitted to central data centers is reduced, optimizing bandwidth usage and minimizing network congestion, which improves overall network performance. This reduction diminishes the need for expensive high-bandwidth connections to centralized data centers, consequently lowering data transfer costs

6. Artificial Intelligence (AI) and Machine Learning (ML)

Next-generation data centers are integrating artificial intelligence (AI) and machine learning (ML) algorithms and data-driven models into data center operations. These technologies enable data centers to implement:

  • Predictive Maintenance: AI and ML algorithms analyze historical data and sensor information to predict potential hardware failures before they occur. This allows for proactive maintenance and minimizes downtime
  • Capacity Planning: AI algorithms forecast future resource needs based on usage patterns and trends. This allows the data center to scale resources efficiently, optimizing space and power consumption
  • Workload Optimization: ML models dynamically allocate workloads across servers to maximize performance and resource utilization. They learn to balance power consumption, performance requirements, and service level agreements (SLAs)

AI Factories

Next generation data centers are also becoming AI Factories, which are purpose-built, highly optimized computing facilities that efficiently handle the intensive and large-scale computational and storage requirements of artificial intelligence workloads, such as machine learning model training and inference.

Artificial Intelligence Machine Learning ML Futuristic Data Center AI Factories Corridor

AI factories ingest raw data as input, refine this data, and produce valuable intelligence through generative AI technologies. They utilize powerful AI supercomputers equipped with high-performance interconnects, such as InfiniBand and NVLink. Companies including Microsoft, NVIDIA, Amazon, and Meta Platforms are at the forefront of developing these AI factories.

7. Quantum Computing

Next generation data centers use quantum processors and algorithms to perform computation in a way that promises to provide significant speedup for certain complex problems compared to classical computing. This type of computing can facilitate:

  • Exponential Computational Power: Quantum computers harness the principles of quantum mechanics to perform complex calculations exponentially faster than classical computers, enabling next-gen data centers to tackle computationally intensive tasks with unprecedented efficiency
  • Accelerated Machine Learning: Quantum algorithms can optimize complex systems, such as supply chain logistics and financial portfolios, and accelerate machine learning tasks, allowing a next gen data center to extract valuable insights from vast amounts of data quickly
  • Cryptography and Security: Development of post-quantum cryptography (PQC) algorithms that resist attacks from quantum computers. Integrating PQC strengthens data center security in the face of potential quantum threats

Frequently Asked Questions

What Services Does a Next Gen Data Center Offer?

Next gen data centers offer various different services, including cloud, colocation, and managed solutions.

IT Technician Holds a Tablet in Computing Facility Corridor with Servers and Lights
  • Cloud Services: Scalable, on-demand computing resources (IaaS, PaaS, SaaS) that allow customers to host applications, store data, and manage workloads in the cloud. This includes hybrid cloud solutions which combine the power of on-premises data centers with the scalability and flexibility of public cloud services (e.g., AWS, Azure, Google Cloud)
  • Colocation: Secure, high-availability space, power, and cooling for customers to host their own IT infrastructure in a data center facility. One of the key benefits of colocation in next-gen data centers is the access it provides to state-of-the-art infrastructure without requiring customers to purchase this infrastructure themselves
  • Managed Services: End-to-end management and support for customers’ IT infrastructure. These data center managed services include monitoring, maintenance, security, backup, and disaster recovery

What is NVIDIA’s Next Generation Data Center?

NVIDIA’s next generation data center will leverage digital twins, created using NVIDIA Omniverse, to enable highly efficient design, simulation, and optimization of AI infrastructure before physical deployment. The digital twin will integrate multiple tools and technologies, such as Cadence Reality, PATCH MANAGER, and Ansys simulation solutions, to provide a comprehensive and accurate representation of the data center’s performance, energy efficiency, and scalability.

NVIDIA Cooling System Infrastructure Cables Servers Energy Efficiency for AI Workloads
Source: NVIDIA.

By utilizing the digital twin approach, NVIDIA aims to accelerate the deployment of advanced AI supercomputers, like the GB200 NVL72 liquid-cooled system, while ensuring optimal performance and efficiency through virtual testing and validation.

What is the Next Big Thing in Data Centers?

The next big thing in data centers is the rapid growth driven by AI-powered demand, which is expected to double global data center capacity from 50 gigawatts (GW) to 100 GW within the next 6 to 10 years.

Global Compute Capacity Chart Growth From 50 Gigawatts GW At Present to 100 Gigawatts GW in the Future
Source: DigitalBridge.

This next generation data center expansion will require significant investments, with capital expenditure (CapEx) spending projected to reach $6 trillion to $7 trillion to build-out this incremental capacity.

The AI ecosystem is set to evolve similarly to the public cloud, with AI training occurring in large data centers and inference being delivered at the edge. However, major developments in generative AI edge infrastructure are anticipated to be delivered between 2026 and 2028.

Mary Zhang covers Data Centers for Dgtl Infra, including Equinix (NASDAQ: EQIX), Digital Realty (NYSE: DLR), CyrusOne, CoreSite Realty, QTS Realty, Switch Inc, Iron Mountain (NYSE: IRM), Cyxtera (NASDAQ: CYXT), and many more. Within Data Centers, Mary focuses on the sub-sectors of hyperscale, enterprise / colocation, cloud service providers, and edge computing. Mary has over 5 years of experience in research and writing for Data Centers.


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