Data center transformation

Modernize to maximize: 3 business drivers that lead to success

Now is the time to unlock the full potential of your data center. Thrive in this dynamic and rapidly evolving environment as you integrate AI, ensure data security, and slash costs through energy savings.

Maybe it started with a routine server upgrade. What should have been a simple refresh turned into a costly disruption, with delays, budget overruns, and a scramble to keep systems online. For the IT team, it was a clear signal: the data center wasn’t just outdated, it was slowing the business down.

This scenario is all too familiar. Running a data center reliably while keeping costs in check is critical, but aging infrastructure, limited visibility, and complex scaling challenges make it harder every year. Infrastructure upgrades, like chassis replacements or full overhauls, can throw operations off course and drain resources. Meanwhile, IT teams are often forced to juggle multiple tools just to maintain performance.

And these challenges are only part of the story. A recent ESG study* found that organizations are expanding their physical data center footprints. The top drivers? Supporting new on-premises AI initiatives (66%) and enabling overall business growth (63%).

If you're leading IT strategy, now is the time to rethink your data center approach. Focus on these key areas to stay aligned with business goals and ahead of the curve in AI integration: data access and energy costs and sourcing. Because your data center is no longer just a support system—it’s a strategic asset. With the right focus, you can transform it into a foundation for innovation, resilience, and growth.

Embracing the AI era

Many organizations want to leverage AI applications that can boost productivity and enhance the user experience. Yet these efforts necessitate substantial data center infrastructure:

  • Low-latency, lossless networks: AI applications need networks that are optimized for low latency and lossless data transmission. AI-native infrastructure ensures high throughput and quick job completion.
  • Scalability and flexibility: Modern data centers must scale to handle increased traffic and processing power for AI/ML applications. High throughput and energy-efficient design are vital for managing large data volumes.
  • Enhanced visibility and automation: AI workloads benefit from infrastructure that offers visibility into network performance and automates routine tasks, reducing complexity and improving security.

AI can also revolutionize your data center operations. Use AI technologies to manage everyday tasks, optimize resource allocation, and provide predictive analytics for smarter decision making. In addition, these systems can improve workload management, quickly detect anomalies, and ensure seamless operations.

To fully leverage AI capabilities, modernizing your data center is fundamental. Data center modernization involves transforming your infrastructure to support the integration of machine learning algorithms, enhance scalability, and improve visibility into server performance. This ensures your data center is equipped to handle the demands of AI, making your systems more responsive, reliable, and future proof.

IDC answers your AI questions

AI can be both a challenge and a catalyst, driving smarter data center networks and more empowered teams.

Balancing data sovereignty with edge performance

Data is the lifeblood of your data center. Your infrastructure should reflect both where your data is hosted and where it is used. Strategic planning is needed to ensure your data center is fully equipped to meet these demands reliably.  

Key considerations

  • Data sovereignty: Hosting data within specific geographical boundaries to comply with local laws is crucial, especially for public sector entities and organizations handling sensitive information.
  • Threat protection: Modern data centers face sophisticated threats that require dynamic security policies to protect applications and data across physical and multicloud environments.
  • Data at the edge: Today’s business climate puts greater demands on latency-sensitive applications and requires greater processing power where the data is used—at the edge. 

Strategies for managing data

  • Zero-trust security framework: Adopt a zero-trust security framework to ensure all data center interactions are verified and secure, reducing the risk of unauthorized access and data breaches.
  • Hosting on premises or at the edge: Reduce your attack surface by maintaining sensitive data on premises on hardware you control and use multilayered application security to protect data at the edge.  
  • Support for mission-critical applications: Deliver outcomes like robotic surgeries and industrial automation, where low latency and network consistency are essential to avoid catastrophic outcomes. 

These strategies help create a secure, compliant data center environment that aligns no matter where the data resides.

Why the edge is critical to AI success

AI is booming, but what’s powering it? IDC says edge infrastructure is the secret weapon for smarter, faster business growth.

Driving down costs through energy efficiency

Modernizing data centers isn't just about keeping up with the latest tech. It's also about making them more cost effective and sustainable, which can support corporate social responsibility initiatives and enhance your brand's reputation.

Here are three key ways to amp up your energy efficiency: 

  • Optimize cooling systems: Implement advanced cooling techniques like direct-to-chip, backdoor heat exchanger, and immersive cooling. These methods improve cooling efficiency and reduce energy consumption.
  • Deploy energy-efficient hardware: Upgrade to modern hardware that is designed for high energy efficiency and lower power consumption.
  • Adopt sustainable design practices: Design data centers with sustainability in mind. Optimize power, space, and cooling capacity through smart equipment choices and thoughtful design.

The perks of being energy efficient:

  • Operational cost savings: Energy-efficient practices reduce operational costs, providing long-term financial benefits.
  • Reduced energy requirements: By optimizing energy use, you lower the amount needed, making it easier to secure the necessary energy.
  • Diminished environmental impact: Lower energy consumption leads to decreased greenhouse gas emissions, contributing to a more sustainable environment.

Powering data centers the smarter way

Can data centers be both powerful and sustainable? Cisco reveals how smart energy solutions are driving efficiency without compromise.

*AI Is Fueling Data Center Modernization Investment, July 2025,  Scott Sinclair, Practice Director, Enterprise Strategy Group

Gain insights from leading experts on the impact of AI in modern data centers with this IDC Analyst AI Networking Insights Report.