The data center industry is on the brink of rapid transformation, driven by emerging technologies that promise to reshape its future.

To assess the current ability of the data center industry to capitalise on the technologies that could transform it, Cadence’s latest report, drawing on insights from 400 IT, facility, and business leaders worldwide, reveals how data centers are evolving and what changes are essential for future success.

Innovation Obstacles

Eighty-six percent of decision-makers say that failing to innovate data centers would lead to serious or moderate consequences. However, transformation is easier said than done.

Data centers face various challenges when implementing innovation, with 42% of decision-makers citing the cost of implementing new technologies as the biggest barrier.

Other obstacles include a lack of skilled staff (35%), incompatibility with legacy systems (31%), and uncertainty about future technologies (30%). Additionally, 33% are hesitant to invest due to unclear ROI. All of which underscores the complexities of driving innovation.

AI Challenges and Opportunities

The challenges continue as 74% of decision-makers agree that data centers are under increased pressure from AI-driven demands. This is arguably driving the uptake of high-density servers, which 59% report they are now using.

Despite the complications created by AI, it is also being harnessed as an innovative tool within data centers themselves for fault detection (60%), natural language assistants (56%), demand forecasting (54%), and automating capacity management (50%). However, adoption isn’t always effortless, leading some to pull back. For example, 10% of decision-makers say they were using AI but aren’t anymore.

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Despite this, findings suggest future AI plans are on the horizon.

Notably, while 73% of all respondents agree that the use of AI within data centers is still in its infancy, three-quarters (75%) believe that in the future, it’ll be possible to use AI to run data centers in place of human operators, indicating an expansive future for the technology. More immediately, 50% of respondents plan to use AI for energy management, highlighting its potential to drive efficiency and sustainability.

Digital Twins Help Address Innovation Challenges

73% of decision-makers believe digital twins are a game changer for driving technological innovation in data centers. This figure rises to 81% among those already using digital twins, underscoring their proven value in practice. These benefits may be why 21% of decision-makers not currently using digital twins plan to introduce them in the next 12 months.