Data centers to boom in 2024—Stakeholder

MACTAN, CEBU–A major player in the industry of information technology foresees that data centers will boom and sprout like mushrooms in 2024, as the country is now digitally equipped and can battle head-to-head with counterparts in the ASEAN region.

During the kick-off of the three-day VST ECS CXO Tech Summit at the Dusit Thani here, Jimmy Go, president and CEO of VST ECS stressed that IT spending will remain strong up to the end of this year and in 2024.

"The data center system market runs number five on the list of IT spending markets, expected to grow by 3.7 percent in 2023. Data center sales this year will reach $224 billion and are expected to grow by 6.1 percent by 2024. In the Philippines, we see a surge of data centers that build investments, done by Filipino companies, while some are foreign investments, particularly in Metro Manila, Mandaue, and Cainta, among others," Go said.

Based on the study "The Rise of Data Centers: Opportunities for 2023," commissioned by the European Chamber of Commerce of the Philippines in partnership with Santos Knight Frank and Quisumbing Torres Law Firm, the Philippines was seen as the next big thing when it comes to data centers.

As the Philippines continues to embrace digital transformation, as shown by its high data consumption, the growing popularity of e-commerce, and greater demand for internet bandwidth, telco players, real estate developers, and global cloud service providers are keen to further boost the country's Internet technology by developing the region as the next data center hotspot, according to the study.

A data center is a physical facility that organizations use to house their critical applications and data. Its design is based on a network of computing and storage resources that enable the delivery of shared applications and data.

The key components of a data center design include routers, switches, firewalls, storage systems, servers, and application-delivery controllers.

Device industry's positive growth

Meanwhile, Go said the device industry will return to positive growth in 2024, nearly four years after the slump as spending was tamed due to the wrath of the Covid-19 pandemic.

"Expect that device spending will increase by 11 percent next year to $759 billion and a new generative AI software might require faster devices," he said, quoting a report of Gartner, an IT research firm that operates in nearly 90 countries.

Further, Go said business spending on software will not slow down in 2024, "as Gartner predicts that the software industry will grow at a faster rate than any other IT segment," adding that spending in software is seen to accelerate over 13 percent year-on-year in 2024, surpassing the $1 trillion spending in 2023.

On the other hand, spending on IT services is also expected to increase to over $1.5 trillion dollars in 2024.

"This forecast affirms that IT will continue to serve as the catalyst of change, propelling innovation, and growth even in the face of broader economic challenges. Meanwhile, cybersecurity is moving at an unprecedented pace, as cybercriminals are now leveraging artificial intelligence to orchestrate sophisticated attacks such as social engineering schemes and data poisoning," he said.

He said AI will also remain imperative for cybersecurity professionals as it provides more precise attack detection, reducing false positives and enabling responses based on real-world risks.

"So, AI has the bad part and the good part," Go maintained.

He then urged chief information officers who graced the summit to embrace the responsibility to take a proactive stand in securing intelligence systems.

"We need to know the latest technologies and latest trends. Our duty extends beyond safeguarding traditional IT infrastructure to ensuring the robust security of devices that are an integral part of our daily lives. This involves continuous monitoring for vulnerabilities and incorporating security as a fundamental aspect of system design," according to Go.

With the theme "Digital Transformation: Growth and Resilient Cybersecurity", the VST ECS CXO Innovation Summit brings together industry leaders, technology experts, and professionals to explore the vital intersection of digital transformation and cybersecurity.

With a focus on unlocking the potential of digital transformation, while ensuring the security of organizations, the conference aims to equip attendees with the knowledge, strategies, and best practices necessary to navigate the complex digital landscape and the evolving cybersecurity threats.

More than 200 participants joined this year's summit, according to VST ECS.