As we approach 2025, Manchester Digital is excited to share Picturing 2025 - a series of essays from our members offering insights into the tech trends and challenges ahead. Below, Kao Data shares their forecasts for the tech industry next year.
Next year is shaping up to be an interesting and exciting year for the UK tech industry, and more so for the Greater Manchester region. For us at Kao Data, it’s an equally exciting time, as this will be the year that construction will begin on our new 40MW data centre in Stockport.
Data centres play a vital role in the UK’s technology landscape, and are essential to Greater Manchester’s thriving digital ecosystem, providing the compute power, storage and connectivity that underpins it. With that in mind, here are our predictions for next year:
Growth in demand for data storage and processing
2025 will see an increased demand for data storage and processing, driven by the rapid growth in AI, cloud services and data analytics.
With the Mayor’s ambitions to make it the UK’s leading digital city region, Manchester is well placed to capitalise on the growing demand for data centres and the compute power required to grow these technological capabilities.
The city region will continue to establish itself throughout 2025 as a key UK technology hub, primarily due to its existing tech economy and infrastructure, its growing start-up ecosystem and its skills, universities and local talent. As London becomes more constrained in terms of space and power and costs continue to rise, there will be a need for regional diversification of computing hubs across the UK, and many of those roads lead to Manchester, Leeds and the North of England.
Data centres will become a major catalyst for developing regional tech economies.
Every successful technology cluster or ecosystem needs data centres as their foundational infrastructure - they are the digital stages for the tech rockstars - and now, with the recent announcement that data centres have been designated Critical National Infrastructure by the Government, they will enable the growth of regional tech economies across the UK.
Forward-thinking municipal leaders are also beginning to appreciate the opportunity and recognise that economic success hinges on digital technologies.
As such, we predict that we will see other data centre operators and cloud providers, such as Microsoft, being welcomed into the North West, and Greater Manchester specifically, as a key location for expansion.
Greater Manchester’s Mayor Andy Burnham has welcomed the news that Kao Data will open its first data centre outside London here in Manchester, and recognised the potential for job creation, economic development and growth via technological advancement.
The new data centre will play a significant part in the GMCA’s Digital Blueprint and integrates with its four key strategic enablers: building digital skills; strengthening the digital talent pipeline; extending digital infrastructure, technology and data and harnessing academia and research. This approach sets a precedent for other regional leaders and Metro Mayors across the North to follow, encouraging similar applications from other global technology companies.
Data centres also bring with them extensive supply chains, ranging from construction and design to long-term maintenance and operational management, as well as the wider supply chain of its customers and end users.
Manchester will become a ‘good neighbour’ to Dublin
Dublin, home to Microsoft, Google, Amazon and Meta, and one of Europe’s largest data centre hubs is facing major technology and economic challenges due to the pressure that data centres are placing on the Irish electricity grid. Recently, there was a moratorium placed on building further data centres in the city until 2028, which has encouraged tech companies to look for homes elsewhere.
Manchester, at just 166 miles away, and sharing the same world-class connectivity links as Ireland, is well-placed to support Dublin and its hyperscale community while the power challenges are addressed. We predict that Manchester and Dublin will begin to form a close bond when it comes to digital infrastructure, providing a much-needed Northern gateway to Europe.
Further integration with local communities
As the regional tech sector grows next year, it will become increasingly important for large tech companies to foster strong relationships with the communities in which they operate. Successful integration goes beyond economic investment and involves actively participating in local areas and supporting local initiatives.
A great example of this is the Kao SEED Fund, a community-driven initiative that we launched last month in Stockport to support social enterprises, not-for-profit organisations, and local charities. By investing in social impact, companies can build lasting and genuine connections with the wider community.
Collaborating with local schools, colleges, and universities can help grow the talent pathway for the tech sector, helping young people in the area to understand growing opportunities in data centres, data science, cloud and AI.
It’s so important that while a large tech business is benefitting from building a data centre, for example, that the local community should also benefit from this investment too. By working together we all win.
Overall, 2025 is looking to be a very exciting year for Kao Data and for Greater Manchester’s regional tech economy and we look forward to continuing to work closely with its tech community.
Find out more about Kao Data and also our Kao SEED Fund.
By Adam Nethersole, VP at Kao Data.
