Data Centers: the pillar of technological disruption
Mário Pires | Schroders
In this position, Mário Pires is responsible for meeting the interests and needs of intermediary and institutional clients in Portugal, as well as growing the business in the region.
April 2025 by Mario Pires
Every time we pay with MB Way, stream a new episode, post something, or ask an AI assistant a question, millions of simultaneous operations are processed by data centers, often without us even realizing it.
It wasn't always like this. At the end of the 20th century, these centers primarily supported internet connections, but the transition to the digital era has driven the transformation of these structures. They are now vast, resilient, and decentralized hubs, equipped with advanced graphic processing units, supported by state-of-the-art cooling systems, redundant power sources, and enhanced security measures.
Separate from the companies providing communication services, data centers have become independent businesses, specializing in the long-term management of these infrastructures that are critical to society's functioning, as they no longer just host public internet services.
Supporting every interaction and the entire economy
A first impetus for this growth came from smartphones, which generated an unprecedented increase in data, amplifying the demand for storage and processing of information and images. More recently, the large-scale availability of solutions supported by data science and artificial intelligence (AI) has caused the already high demand to increase exponentially.
From an economic perspective, this reality reflects the digitalization of businesses and the growth of cloud computing. However, data centers have become essential to the functioning of virtually all organizations, from banks to governments and security forces, as well as millions of businesses and the flows between them and their customers.
Every digital interaction we make triggers multiple servers, databases, and algorithms that process, validate, and transmit information. Data centers support these operations, sustaining the infrastructure that defines the digital economy and ensuring its speed, security, and reliability.
And each new application is being adopted more quickly, demanding greater responsiveness from these data centers: while Netflix took more than 10 years to reach 100 million users, WhatsApp only needed three and a half years. More recently, TikTok reached 100 million users in nine months and ChatGPT in just two.
Technological innovation itself depends on the capacity of these data centers, and, although the innovations that will mark the coming years may be difficult to foresee, one thing is certain: they will not exist without data centers.
But there is another perspective to take into account: the more data there is to store and process, the higher the energy bill for each data center and its impact on resource consumption.
Data centers: energy consumption and sustainability
In addition to the enormous amount of energy required to operate 24 hours a day, data centers have high energy cooling needs (to maintain the integrity of their servers). These are challenges that require responses capable of balancing efficiency and sustainability.
A single data center can consume as much energy as a town or city. In the US, data centers accounted for 4.4% of total annual electricity consumption in 2023, according to the “2024 United States Data Center Energy Usage Report”; the forecast is for this percentage to continue to rise.
The digital revolution is therefore closely aligned with the energy transition toward renewable source solutions. It is essential for data centers to evolve into businesses that are less reliant on fossil fuels, with lower environmental impacts and reduced operational costs resulting from electricity consumption.
Professionals, companies, and countries that are able to contribute to balancing these multiple needs of data centers will undoubtedly secure their place in the "pole position" of the global economy.