Navigating Uncertainty: Unlocking Opportunity in 2025

A November ONS report showed that 57% of businesses  were struggling with turnover, with 23% pointing to economic uncertainty as a major culprit. While that's definitely worrying, it's not all bad news. The Ipsos Predictions Survey 2025 found that 65% of people thought 2024 was a tough year for the UK. While a high number, it's the lowest it's been since 2019, which hints there is a little bit of optimism creeping in.

The data centre sector too hast been facing these challenges. They're facing hurdles, like grid availability, negative perceptions around power consumption, and scepticism about AI. Even the National Critical Infrastructure classification changes are adding to the tension.

Data Sector Challenges

2024 presented a complex set of challenges for the data centre industry. Geopolitical events had a global impact, and the UK specifically experienced a grid capacity crisis. This limited access to power, pushing up energy costs for both data centre companies and the businesses they serve. These increased costs put pressure on existing financial models. While the situation has stabilised somewhat, the potential for similar events to occur again creates ongoing uncertainty.

Scepticism around emerging technologies like AI is also impacting the data centre sector. Despite their promise, these technologies create raise questions around future growth. A recent Appen report revealed a drop in ROI for deployed AI projects, from 56.7% in 2021 to 47.3% in 2024. This understandably fuels doubts about AI's true potential, leaving open the question of whether this uncertainty will delay long-term data centre investment.

While the data centre sector's being as National Critical Infrastructure is largely positive, it could also influence strategies and processes in ways that hinder the businesses it serves. Getting this right is crucial.

While the challenges are evident, there is clarity ahead, which will likely come through innovation, strategic adaption and evolving technology solutions.

Emerging Clarity and Opportunity

Adopting AI Applications

AI's success hinges on investment in large language models (LLMs) that translate into practical applications. While tools like ChatGPT and Gemini are popular, true value lies in monetising these models through inferencing and Retrieval Augmented Generation (RAG). These applications are still early stage, but their potential global impact is significant.

The move from theoretical AI to real-world applications will have a transformative impact on the UK's digital infrastructure. Much like the outdated infrastructure of the Victorian era, our current systems are struggling to keep up with the rapidly evolving digital landscape. However, by strategically investing in infrastructure and fostering innovation, we're approaching a tipping point. The acceleration of practical AI applications will unlock significant growth opportunities within the data centre sector.

Regulation & NCI

The designation of data centres as critical national infrastructure rightly recognises their vital role in the UK's digital economy. Effective policies must balance security and infrastructure needs with support for regional regeneration and investment.

The reclassification of data centres as critical infrastructure is intended to bolster business continuity. However, the reality is that downtime often results from issues with external suppliers, partners, or clients, highlighting that digital resilience is a broader, ecosystem-wide challenge. Data centres are a key component, but they're only one piece of a complex network. Increased awareness and collaboration across the ecosystem are essential for minimising operational disruptions.

Geopolitics & Energy Costs

Global supply chain shifts and rising infrastructure costs have led to a more practical approach in business. As electricity markets stabilise, planning and confidence will improve, allowing organisations to reassess their digital infrastructure and make better-aligned investments.

Resilience & Innovation in Times of Uncertainty

History shows us that necessity drives innovation. The pandemic, for example, spurred unprecedented advancements in vaccine development.

In uncertain times, flexible and resilient digital infrastructure is crucial for businesses and society to thrive. Data centres will play an increasingly vital role, serving as the foundation for storing, managing, and accessing data—the lifeblood of modern organisations—and enabling them to unlock practical applications and drive innovation.

Data Centres: A Foundation for Business Stability

I believe the data centre industry should move beyond simply managing its own challenges and take a more active role in educating clients. By providing guidance on strategies for cost optimisation, mitigating cyber risks, and ensuring long-term reliability, data centres can become invaluable partners in their clients' resilience and innovation efforts.

The regionalisation of data infrastructure is another trend I anticipate gaining momentum. Investing in regional data centres offers substantial benefits, including stimulating local economies and expanding access to technological resources beyond major urban centres. Unfortunately, many smaller organisations are neglecting their long-term digital planning, a shortsighted approach that could negatively impact their future growth and competitiveness.

Conclusion

Uncertainty presents a complex mix of challenge and opportunity. The data centre sector is uniquely positioned to help businesses navigate these complexities, driving innovation and supporting adaptation. While the past year has been difficult for many, the coming year offers the potential for renewed growth and economic recovery.

Tough times often push us to come up with brilliant new ideas, and that's how we make things better. As businesses change and adapt, we'll see the economy bounce back, technology improve, and things get easier for everyone.