COVID-19 Impact on Data Center Accelerators in the Information and Communication Technology Industry

COVID-19 Impact on Data Center Accelerators in the Information and Communication Technology Industry

ANALYSIS ON IMPACT OF COVID-19 ON THE MARKET

The spread of COVID-19 has entirely changed people's life. COVID-19 which was originated in the city of Wuhan, China, in 2019 and had been continuously spreading all over the world since then. It has been spread to more than 180, and the U.S. tops the list, followed by India, Brazil, France, Turkey, among others. As of 10 August 2021, WHO reported 204.21 million positive cases worldwide, of which 4.31 million patient has lost their life to the virus. On a positive note, 183.39 million patients have recovered, and 4.46 billion doses have been administrated globally. The pandemic has put the lockdown, travel ban, and business shutdown in most of the countries, which has highly impacted the global economy. All the major industries are facing serious disruption such as a break in the supply chain, shut down of offices and manufacturing units, and many more due to the pandemic.

However, the demand for cloud-based services and the use of Artificial intelligence has increased tremendously.  The burgeoning application of A.I. in different sectors like automobile, consumer electronics, medical, education, and others have enhanced consumer perception and expectations from A.I. technologies. Also, for cloud server inference applications, numerous FPGAs are being developed to perform different tasks such as enhancing security and fast computing.

STRATEGIC DECISION BY MANUFACTURERS AND GOVERNMENT INITIATIVES AFTER COVID-19

Post-COVID manufacturers are taking many strategic decisions to get back their original business place in the market. The companies are conducting many research and development activities to improve the technology involved in the data center accelerators. Thus the companies are bringing more advanced technology in the market to increase their market share and being recognized by the clients. Also, companies are acquiring other I.T. companies to expand their business in the market.

For instances,

• In March 2021, Advanced Micro Devices Inc. released a new data center chip to grab more market share from its rival company Intel Corp. The company's "Milan" data center processor is faster than Intel's current best data center chips. The chip and its predecessor have both outperformed Intel's chips, helping AMD gain more market share and land customers such as Alphabet Inc's Google. Thus by bringing advanced technology, the company is increasing its market share
• To expand the portfolio of data and hybrid cloud consulting services, IBM announced in July 2021 that it had acquired Bluetab Solutions Group, S.L., an I.T. service providing company. Bluetab will help the company to further advance its hybrid cloud and A.I. strategy. Also, Bluetab has expertise in data and cloud migration services which includes specialized data strategy, data fabric, and advanced analytics, which will further help in the company's growth

The advancement in technology and its use in the government sector have also made the government take the initiative to boost the growth of the market.

For instance,

• Chinese government has issued a Three Year Plan for new data centers, demanding that the new facilities should become more efficient, should have a PUE of 1.3, and have a utilization of 60 percent by the end of 2023. This Plan for the Development of New Data Centers will also limit the growth of data centers to 20 percent and sets out a national architecture supporting national cloud hubs, provincial data centers, and edge data centers. The Plan is designed to support digital transformation in the country

IMPACT ON PRICE

COVID-19 pandemic has pushed all businesses to make immediate transitions into digital functioning. For this transformation, the firms have to adopt cloud technology. Thus due to the rise in the demand for the same, there has been a major impact on the price of the technology.

For instance,

• Research done by ANALYTICS INDIA MAGAZINE PVT LTD shows that, on average, the price of 1 T.B. of on-premises storage with exceptional performance could cost over USD 3,000 for a year, and hybrid cloud cost more than this.  Also, AWS, Google Cloud, Azure are considered to be the major competitors in the space of cloud platforms. The cost of their platform differs based on customized and discounting models that combine to create a highly personalized cloud deployment.

Table 1: Cost Comparison Of The Cloud Platform Provided By The Firms-

Source: ANALYTICS INDIA MAGAZINE PVT LTD

IMPACT ON DEMAND AND SUPPLY CHAIN

The manufacturing sector is enhancing its manufacturing processes by using A.I., IoT, and blockchain technologies. With the help of these technologies, companies are cutting costs, increase their process efficiency, and reduce human contact. A.I. is also used for predictive maintenance and will further be implemented to forecast demand and returns in the supply chain. Also, educational firms have deployed A.I. tools to enhance online learning and virtual classroom experience for students. As the use of data centers is increasing, its demand in the market is also growing. To cater to this rising demand, the companies are coming forward with new modern data center solutions in the market.

For instance,

• In Sept 2020, Marvell announced that the company's custom application-specific integrated circuits (ASICs) offering would enable the next generation of artificial intelligence (A.I.) accelerator solutions for the data center and automotive markets. The ASICs provide turnkey design and verification, as well as custom mesh; interconnect network-on-chip communication. Also, it provides features such as adaptive voltage supplies for power reduction along with custom hierarchical test methodology, logic redundancy, and a custom memory BIST solution for enhanced reliability
• In Feb 2021, Xilinx, Inc. released a new range of data center products and solutions, including a new family of Alveo SmartNICs. The company has also introduced smart world A.I. video analytics solutions that provide deterministic low latency performance for the most demanding A.I. video applications. Thus this new accelerated algorithmic trading framework will help software developers to create trading solutions that break the microsecond latency barrier

CONCLUSION

Post-COVID inception, the demand for cloud services and advanced technology has tremendously increased, leading to the growth of the market. The use of A.I., IoT, and other technology in different sectors like medical, education, automobile, and others has further raised its demand in the market. Also, the use of this technology can help the manufacturing firms to work more efficiently and accurately has raised the demand for A.I. technology in the market. The technology also helps in predictive maintenance and helps to forecast demand and return in the supply chain. Also, due to the shift to work from the home scheme and to secure a remote workforce, the demand for cloud-based services has increased. Thus due to the rise in demand, the sending of the firms on cloud platforms has also increased in the market.