Monday Morning Impact – November 25
Gartner Predicts Power Shortages Will Restrict AI Data Centers By 2027
AI and Generative AI (GenAI) are driving rapid increases in electricity consumption, with data center forecasts over the next two years reaching as high as 160% growth, according to Gartner. As a result, Gartner predicts 40% of existing AI data centers will be operationally constrained by power availability by 2027.
“The explosive growth of new hyperscale data centers to implement GenAI is creating an insatiable demand for power that will exceed the ability of utility providers to expand their capacity fast enough,” said Bob Johnson, VP Analyst at Gartner. “In turn, this threatens to disrupt energy availability and lead to shortages, which will limit the growth of new data centers for GenAI and other uses from 2026.”
Gartner estimates the power required for data centers to run incremental AI-optimized servers will reach 500 terawatt-hours (TWh) per year in 2027, which is 2.6 times the level in 2023.
“New larger data centers are being planned to handle the huge amounts of data needed to train and implement the rapidly expanding large language models (LLMs) that underpin GenAI applications,” said Johnson. “However, short-term power shortages are likely to continue for years as new power transmission, distribution and generation capacity could take years to come online and won’t alleviate current problems.”
The inevitable result of impending power shortages is an increase in the price of power, which will also increase the costs of operating LLMs, according to Gartner.
“Significant power users are working with major producers to secure long-term guaranteed sources of power independent of other grid demands,” said Johnson. “In the meantime, the cost of power to operate data centers will increase significantly as operators use economic leverage to secure needed power. These costs will be passed on to AI/GenAI product and service providers as well.”
Zero-carbon sustainability goals will also be negatively affected by short-term solutions to provide more power, as surging demand is forcing suppliers to increase production by any means possible. In some cases, this means keeping fossil fuel plants that had been scheduled for retirement in operation beyond their scheduled shutdown.
“The reality is that increased data center use will lead to increased CO2 emissions to generate the needed power in the short-term,” said Johnson. “This, in turn, will make it more difficult for data center operators and their customers to meet aggressive sustainability goals relating to CO2 emissions.”
Data centers require 24/7 power availability, which renewable power such as wind or solar cannot provide without some form of alternative supply during periods when not generating power, according to Gartner. Reliable 24/7 power can only be generated by either hydroelectric, fossil fuel or nuclear power plants. In the long-term, new technologies for improved battery storage (e.g. sodium ion batteries) or clean power (e.g. small nuclear reactors) will become available and help achieve sustainability goals.
Gartner clients can learn more in “Emerging Tech: Power Shortages Will Restrict GenAI Growth and Implementation.”
Channel Impact®
Gartner recommends organizations evaluate future plans anticipating higher power costs and negotiate long-term contracts for data center services at reasonable rates for power. Organizations should also factor significant cost increases when developing plans for new products and services, while also looking for alternative approaches that require less power. The researcher further recommends that organizations re-evaluate sustainability goals relating to CO2 emissions in light of future data center requirements and power sources for the next few years.
Ingram Micro Rolls Out New Loyalty Program
Ingram Micro has announced the U.S. launch of “Ingram Micro Ultra,” a digitally enabled loyalty program for customers and technology vendors. The three-tiered points-based program will offer a series of technology-specific and solutions-focused growth tracks providing access to information that centralizes all their activities with Ingram Micro, including targeted insights and trends and real-time updates on available incentives, resources, and rewards.
Additional benefits of include increased visibility into market trends, and advanced analysis of purchasing patterns and operational data.
Ingram Micro Ultra features three defined tiers: Essential, Advanced, and Elite. These tiers are based on engagement levels, performance, and loyalty. Elite status is awarded to members of Ingram Micro’s SMB Alliance and Trust X Alliance.
The first growth track within the new program will be “Xvantage Enable.” Set to launch in Q4 2024, this new track will further educate channel partners on AI – particularly around how to effectively accelerate adoption. Additional growth tracks will launch in 2025.
Available now in the U.S. and continuing to expand worldwide in 2025, the program works within Ingram Micro’s intelligent and proprietary Xvantage digital experience platform.
In other news, Ingram Micro is onboarding the AWS Marketplace to the distributor’s
AI-powered Xvantage digital experience platform. Other hyperscalers are expected to be added in the months ahead.
Channel Impact®
The Ingram Micro Ultra loyalty program is expected to enable informed decision-making, accelerate growth, and reward success.
AppDirect Announces Upcoming Acquisition of vCom Solutions
AppDirect, a San Francisco-based company with a B2B subscription commerce platform, announced its intent to acquire vCom Solutions, an IT lifecycle management software and managed services company. Delivering software and managed services to organizations for over two decades, vCom supports IT and finance organizations through the lifecycle management of their IT environment, from procurement to payment. With this acquisition, AppDirect’s advisors and their end customers will gain access to vCom’s AI-powered software platform, vManager and vCom’s suite of IT spend managed services, while also gaining access to vCom’s Buyers’ Club, QuantumShift.
“By augmenting AppDirect’s current technology management functionality with the depth and breadth of the vManager platform, AppDirect will be able to empower our advisors to offer the world’s most comprehensive IT procurement and management platform to organizations of all sizes,” said Nicolas Desmarais, AppDirect’s Chairman and CEO. “vCom’s offering will also allow AppDirect advisors to provide additional value to their end businesses, elevating their trusted consultancy and increasing revenue.”
The acquisition is subject to customary closing conditions, including regulatory consents. Prior to closing of the transaction, vCom will spin out its direct sales team and branded franchise advisors to become an exclusive partner to AppDirect, enabling it to expand into new markets and areas of differentiation. Terms were not disclosed.
Channel Impact®
By acquiring vCom, AppDirect will add technology capabilities expected to further its effort to become the single platform for buying, selling, and managing recurring technology services through advisors.
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