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As widespread adoption of data-intensive artificial intelligence (AI) technologies speeds up worldwide, data centre operations are facing unprecedented energy demands and a growing carbon footprint. They are grappling with escalating environmental concerns while also striving to scale compute power and storage capacity and to meet their total cost of ownership (TCO) goals.
According to McKinsey1, the power needs of data centres are expected to triple by the end of 2030. “Skyrocketing compute and data demands are being further accelerated by gains in computing capabilities alongside reductions in chip efficiency relative to power consumption,” the analyst firm noted.
As global data storage leader supplying the world’s leading data centres, Seagate has a front-row seat to the conversations around data centre sustainability and growing demand for cost-efficient data storage. Among other things, working with our customers has taught us that TCOand sustainability goals are notmutually exclusive — often they are one and the same.
To better understand the link between TCO and sustainability, we decided to survey data centre professionals. This report, informed by their insights, reveals a critical gap in understanding data centres’ sustainability challenges, and the ways these challenges affect the entire supply chain. These insights can inform decisions that supportboth business growth and environmental goals.
It need not be either or.

This Seagate Technology report is based on a commissioned global study conducted by independent research firm Dynata, with fieldwork by global communications consultancy Current Global.
The study included both qualitative and quantitative research to examine the AI-intensified strain on data centre sustainability and opportunities for increasing the efficiency of operations.
The research began with in-depth qualitative interviews with five senior experts in data storage and infrastructure from the United States, Germany, China and Japan. Each expert has over a decade of experience in data centre planning, operations, and sustainability, which enabled robust insights into industry challenges and emerging trends. These insights informed the design of a global quantitative survey.
The quantitative survey gathered responses from 330 data centre professionals across 11 markets: Australia, China, France, Germany, India, Japan, North America, Singapore, South Korea, Taiwan and the United Kingdom. All respondents work for companies that manage at least 50 terabytes of storage, with most overseeing up to five petabytes. Participants included CIOs, CTOs, IT VPs, directors, executives, COOs, line-of-business leaders, storage architects, and solution architects in data storage companies and organisations that supply or provide data storage solutions.
The study explored the current landscape of data centre efficiency and sustainability. It aims to provide industry leaders with data-driven insights to guide business-boosting, sustainable decision-making.
Seagate is a global leader in scalable mass-capacity data storage, delivering more than four and a half billion terabytes of capacity over the past 45 years.

Data Centres and AI Impact
Data centres are the backbone of today’s AI economy. Modern-day rapid adoption of AI technologies has resulted in data centres facing unprecedented energy demands and a growing carbon footprint. The survey’s results make two things abundantly clear: 94.5% of the survey respondents reported that their companies face increasing data storage needs. 97% anticipate AI’s growth to further impact storage demand.
This corresponds to a growing energy demand. According to data from IEEE: by 2030, data centre energy demand is projected to grow significantly, potentially accounting for 8% of global carbon emissions, up from 0.3% in 2022.
To keep pace with AI innovation, organisations must scale their data infrastructure while aligning with corporate sustainability mandates. Increasingly, businesses face expectations — and sometimes regulatory requirements — to operate data centres both cost-efficiently and sustainably. It can be challenging to reconcile these two expectations because the more energy data centres use, the trickier it is to reduce their carbon footprints.
For this reason, total cost of ownership (TCO) is sometimes seen as at odds with sustainability goals. The survey on which this report is based found that: Environmental impact is a concern for nearly 95% of respondents. But only 3.3% of the surveyed data centre professionals said their companies prioritise low environmental impact in data centre purchasing decisions.
Still, other findings rendered by this survey clarify that TCO and sustainability are far from competing priorities. The TCO and sustainability considerations can and do often align, offering opportunities for operational efficiencies and environmental impact reduction.
The study found that data centre operations are affected by factors that embody both TCO and sustainability goals. Among them are:
Energy consumption. High energy usage drives both operational costs and carbon emissions, with 53.5% of respondents identifying this as a significant concern.
Raw material requirements. Nearly 49.5% of the surveyed data centre professionals cited the large amounts of raw materials needed for infrastructure as a key issue.
Physical space constraints. Close to 45.5% of respondents highlighted the financial and logistical burden of limited space.
Infrastructure costs. High construction costs for sustainable infrastructure (identified by 28.5% survey takers) and acquisition costs for data centre components (27% respondents) significantly impact capital expenditure (CapEx).
Lifecycle extension. Over 92% of respondents agreed that extending the lifecycle of storage equipment is important, emphasising durability to reduce replacement and maintenance costs. (In contrast, only 15.5% of respondents considered lifecycle extension a top purchasing factor for data storage infrastructure or equipment, and 12.1% chose durability as an important factor.)

[IMG: The infographic notes how TCO and sustainability often go together, offering chances to reduce environmental impact and boost efficiency.]

Enlarge

[IMG: The infographic notes how TCO and sustainability often go together, offering chances to reduce environmental impact and boost efficiency.]

These concerns underscore the multifaceted nature of data centres’ TCO, which integrates both CapEx and operational costs — and directly bears on sustainability. Improving energy efficiency reduces both emissions and operational costs, and extending equipment lifecycles minimises e-waste and raw material demand.
This isn’t to say that sustainability doesn’t complicate TCO calculations — it can do that.
For example, power consumption is an inherent part of the TCO equation. But, as data centre operators know, green energy sources may be more costly up front. When that’s the case, the focus on the nature of energy procured adds cost and efficiency constraints to an already challenging cost efficiency problem.
[H3] A Threefold Choice

As the increasing use of AI drives up data creation, organisations need more room for ever-expanding data volumes, and many struggle with space limitations. Spatial constraints affect their ability to expand and implement more sustainable storage solutions. In addition, high up-front costs associated with sustainable infrastructure remain a significant barrier to progress. About 82.5% of respondents said they lack the physical space to build sustainable data storage infrastructure.
When asked about the top three barriers to sustainable data centre operations, respondents pointed to lack of physical space (45.5% of respondents); cost of constructing storage infrastructure (28.5%); and cost of acquiring data centre components (27%).
Because of these barriers, organisations often face a threefold choice. To accommodate skyrocketing volumes of data, they must choose one of the three: Scale up (add more storage within existing centre footprint) Scale out (add a building or expand the data centre footprint) Migrate data to the cloud
Each of these options comes with TCO and sustainability trade-offs.
[H3] Sustainability Strategies

The survey revealed that businesses are increasingly adopting a number of strategies that align sustainability with TCO goals.
Renewable energy sources. Nearly 62% of respondents reported using renewable energy sources to power their data infrastructure.
Renewable energy infrastructure. Close to 58% of survey takers said their organisations are investing in renewable energy infrastructure.
AI-enabled storage and sustainability ops. Additionally, 55.5% of represented organisations are implementing AI-based systems to optimise storage operations and enhance sustainability monitoring.
Despite these efforts, challenges remain. Many companies struggle with high infrastructure and component costs and space limitations.
The Path Forward
Addressing these challenges requires a shift in how the industry approaches TCO and sustainability. Increasingly, they go together. When sustainability goals do complicate TCO plans, attention needs to be paid across the entire ecosystem to: Scope 1 (greenhouse gases, or GHG, that an organisation emits from sources it owns or controls directly) Scope 2 (GHG deriving from an organisation’s purchase of electricity, steam, heat or cooling) Scope 3 (GHG emissions originating from business operations by sources that are not directly owned or controlled by an organisation)
The AI-amplified impact on data centre sustainability calls for innovative and holistic thinking about data centre practices. Among other things, this means looking beyond operational carbon emissions (Scope 2 and Scope 3) to include evaluation of embodied carbon — or, carbon emitted during upstream extraction, production, transport, bill of material, manufacturing, packaging, and distribution stages of a product’s life cycle (Scope 3).
As the boom of AI applications stimulates the growth of data centres, collaboration and innovation across the supply chain will be key to achieving a sustainable and more efficient datasphere.

In today’s AI economy, the rapid adoption of smart technologies is driving a sharp increase in data storage demand. Nearly all survey respondents (over 97%) expected AI to have a substantial impact on storage needs. But data always leaves a footprint: data centres consume energy and generate emissions.
The AI-driven rising demand for data storage directly increases the carbon footprint of data centres. As data volumes grow, so does the energy required to maintain them. Of course, AI’s energy demands extend beyond data storage. The most energy-hungry areas include compute, networking and data processing.
The whole supply chain matters, too. Components manufacturing for AI — such as specialised processors and hardware — is highly energy- and resource-intensive, increasing the embodied carbon of these components. (Embodied carbon refers to the quantity of GHG emissions related to the upstream extraction, production, transport, bill of material, manufacturing, packaging, and distribution stages of a product’s life cycle.) Consequently, both the production and operation of AI systems contribute to a larger carbon footprint, intensifying the environmental challenges faced by data centres.
In response to this new demand, data centres have begun toprioritise sustainability and decarbonization. Nearly all survey respondents (close to 94.5%) reported that their companies are working to lower the carbon footprint of their data storage operations.
The survey found that to reduce their environmental footprint, companies are primarily adopting renewable energy: 61% of respondents reported that their companies use renewable energy sources to power data infrastructure. Nearly 58% of respondents said their companies were building new renewable energy infrastructure to power data equipment. Close to 42% of the data centre professionals surveyed reported implementing AI-driven solutions to better determine their data storage or operational needs.

[IMG: Bar chart shows top ways companies cut the environmental impact of data ops: renewables, cloud migration, and AI to determine data storage needs.]

Enlarge

[IMG: Bar chart shows top ways companies cut the environmental impact of data ops: renewables, cloud migration, and AI to determine data storage needs.]

Another strategy is cloud migration. Nearly half of respondents (over 47%) believed migrating data to cloud systems helps reduce their company’s carbon footprint. Cloud service providers, with theirbest-in-class practices and infrastructure, have an advantage in lowering the environmental impact of data operations.
However, enterprises looking to deploy this strategy need to keep in mind that cloud migration can also be seen as shifting responsibility rather than eliminating impact. While cloud providers may operate more efficiently, the environmental burden remains. It is merely transferred from individual companies to the cloud providers, who must manage energy and resource demands. This underscores the need for a holistic approach to sustainability, where both cloud providers and their clients work together to minimise the carbon footprint of data.
In transitioning to more sustainable data storage operations, companies face significant challenges. They include physical space constraints, costs, high energy consumption and effective assessment. Let us take a closer look at each of these factors.
[H3] Challenge: Space and Cost

top three barriers to sustainable data centre operations are the lack of physical space (45.5%), the cost of constructing storage infrastructure (28.5%), and the cost of acquiring data centre components (27%) (see Figure 2).

[IMG: A chart shows top barriers to sustainable data storage: limited space, high infrastructure build costs, and expensive data centre components.]

Enlarge

[IMG: A chart shows top barriers to sustainable data storage: limited space, high infrastructure build costs, and expensive data centre components.]

Not surprisingly, physical constraints — such as space limitations for new infrastructure — ranked as the biggest challenge, with 45.5% of all respondents citing a "lack of physical space" as t

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How Cloud and AI Workloads Have Redefined Primary Storage

Data: The world’s most valuable asset

The Data Movement: Stephanie Hernandez

[IMG: Up-close shot of a drive component is positioned over a computer screen with green lights.]

“Hard drives will soon be a thing of the past.”

“All-flash arrays will soon replace disks and hybrid arrays in the data centre.”

“The data centre of the future is all-flash.”

Welcome to the latest instalment of the perennial hard drive extinction saga. The debate — with highlights sampled above — has spanned more than a decade now. The predictions foretelling hard drives’ demise, uttered by a few vocal — and shall we say, optimistic — proponents of flash-only technology, have not aged well over the years. But they seem to get increasingly brazen with time. 

Without question, flash storage is well-suited to support applications that require high-performance and speed. And flash revenue is growing, as is all-flash-array (AFA) revenue. But not at the expense of hard drives. The premise underlying speculation around the death of hard drives is deeply flawed.

We are living in an era where the ubiquity of the cloud and the emergence of AI use cases have driven up the value of massive data sets. Hard drives, which today store by far the majority of the world’s exabytes (EB), are more indispensable to data centre operators than ever. 

Even in recent years, when flash prices temporarily dropped to all-time lows, solid state drives (SSDs) did not displace hard drives in workloads requiring mass data storage.

Industry analysts expect hard drives to be the primary beneficiary of continued EB growth. The chart below shows that enterprise and large-scale cloud data centres — where the vast majority of the world’s data sets reside — will be a key driver of this growth in installed capacity. According to industry forecasts, total enterprise storage is projected to grow by 8,528 EB between 2023 and 2028, reaching 14 zettabytes (ZB) by 2028. Of that growth, hard drive storage is projected to grow by 440 EB, SSDs by 166 EB, and tape by 921 EB.1 These figures reflect absolute capacity additions across all enterprise use cases.

The chart below focuses on compound annual growth rates (CAGRs) and overall installed base by media type, rather than on these raw EB deltas. Case in point: hard drive storage is projected to grow by 440 EB between 2023 and 2028, which translates to a CAGR of approximately 25% over that five-year period.² This 25% CAGR — shown in the green segment of the chart — represents growth in installed base, rising from 4.1 ZB in 2023 to more than 10.5 ZB by 2028. The 440 EB figure refers specifically to new capacity added annually, which contributes to this overall expansion in total installed base.

[IMG: Bar chart indicates the forecast of enterprise zettabyte storage growth rates broken down by storage media type.]

[IMG: Bar chart notes forecast of enterprise zettabyte storage growth rates broken down by year, and cloud and non-cloud data.]

It’s not a zero-sum game. In data centres, hard drives and flash have always worked in synergy, deployed in support of different services. They each have their own unique benefits and value proposition. In fact, in the era of generative AI, compute clusters closely coupled with flash technology indirectly fuel the downstream need for more hard drive EBs, since the generated content needs to be economically stored.

This storage media synergy is alive and well, while the conjecture around hard drives’ obsolescence lacks credibility and will not ultimately pan out. 

Let’s take a closer look at three key myths underlying this conjecture — and the third-party data-driven reasons why hard drives will remain central to data storage architectures for the foreseeable future.

[H2] Truth No. 1: Pricing disparity
[H5] Myth: SSD pricing will soon match the pricing of hard drives.
[H5] Reality: SSD and hard drive pricing will not converge at any point in the next decade.
The data is clear. Hard drives hold a firm cost-per-terabyte (TB) advantage over SSDs, which positions them as the unquestionable cornerstone of data centre storage infrastructure. 

Even though the NAND flash memory storage pricing remains highly volatile and hit a low in 2023 due to weak demand and oversupply, analyst firm Forward Insights had forecasted a price resurgence for SSDs starting in 2024 and through 2025, and this prediction has been borne out. After facing precipitous price declines, SSD vendors will welcome this turnaround after struggling to reduce ageing inventory and cut capital expenditure to align supply with demand. Subsequently, we have already started to see price increases for NAND-based solutions. 

Even as the cost per TB of both SSDs and hard drives continues to decline through at least 2027, Seagate’s analysis of research by IDC, TRENDFOCUS, and Forward Insights confirms that hard drives will remain the most cost-effective option for most enterprise tasks. The price-per-TB difference between enterprise SSDs and enterprise hard drives is projected to remain at or above a 7:1 premium through at least 2027. 

[IMG: Bar chart outlines the enterprise cost per terabyte difference between SSDs and hard drives.]

This price-per-TB differential is particularly evident in the data centre, where device acquisition cost is by far the dominant component in total cost of ownership (TCO). Taking all storage system costs into consideration — including device acquisition, power, networking, and compute costs — a far superior TCO is rendered by hard drive-based systems on a per-TB basis.

[IMG: Chart notes estimated data centre storage total cost of ownership for SSDs and hard drives.]

To circumvent these unassailable TCO and price disparities, some AFA OEMs have begun designing their own custom high-density NAND devices with capacity points into the hundreds of TBs — claiming theoretical TCO advantages that extend beyond device economics to the system level. The problem with this logic is that adding dramatically higher levels of NAND density to a single device or system still doesn’t alter the stark cost-per-TB differential of the raw media.

Another tactic used to distract from the cost-per-TB disadvantage has to do with the so-called “TBe” or “effective terabytes.” The assertion is made that due to data reduction techniques (e.g., data compression), an SSD can offer substantially more storage space than its raw capacity implies. However, in large deployments, data reduction occurs higher up in the stack, rendering it irrelevant at the storage level. In addition, given the increased focus on protecting data and the prevalence of encryption, data compression often isn’t feasible in most enterprise and cloud use cases. When data is encrypted, it can’t be compressed because its entropy is so high that there is no pattern to simplify.

Bottom line: While flash excels at performing specific and high-performance tasks, hard drives will continue to be the primary destination for data centre EBs, offering a reliable, cost-effective, and widely adopted solution for the foreseeable future.

[H2] Truth No. 2: Manufacturing scale
[H5] Myth: Supply of NAND can ramp to replace all hard drive capacity.
[H5] Reality: Entirely replacing hard drives with NAND would require untenable CapEx investments.
The notion that the NAND industry would or could rapidly increase its supply to replace all hard drive capacity isn’t just optimistic — such an attempt would lead to financial ruin. Transitioning from hard drive to NAND isn’t just about producing more units. It’s a financial and logistical behemoth to execute, let alone at a price that is competitive with hard drives.

According to the Q4 2024 NAND Market Monitor report from industry analyst Yole Intelligence, the entire NAND industry shipped 3.9 ZB from 2015 to 2024, while having to invest a staggering $223 billion in CapEx — approximately 43% of their combined revenue.

In contrast, the hard drive industry addresses the vast majority — about 87% — of data centre storage needs in a highly capital-efficient manner. To help crystallize this, let’s use Seagate Technology as a proxy for the hard drive industry. Between 2015 and 2024, Seagate shipped 4 ZB of storage. Seagate’s capital investments over that nine-year period totalled $4.5 billion, or only around 4.9% of Seagate’s total hard drive revenue. This equals approximately $57 billion per ZB for the NAND industry, versus about $1.1 billion per ZB for hard drive production (as represented by Seagate). The hard drive industry is far more efficient at delivering ZBs to the data centre. Seagate’s analysis of forecasts from IDC for hard drives and Forward Insights for SSDs shows that in 2025, hard drive EB production will be almost 2.5 times that of SSDs. In that same year, in enterprise and data centre markets, hard drive EB production will be four times that of SSDs.

Looking across enterprise-grade storage devices, hard drives remain unmatched in cost efficiency, scalability and sustainability. Compared to SSDs and DRAM, hard drives deliver the lowest cost per gigabyte, ship the largest volume of exabytes, and require the lowest CapEx intensity as a percentage of revenue. They also offer the lowest embodied carbon footprint per TB, reinforcing their role as the most efficient and sustainable storage choice at scale.

See the comparison below across three key dimensions — cost, scale and efficiency — averaged from CY2020 to CY2024. The hard drive industry is far more efficient at delivering ZBs to the data centre.

[IMG: Table compares the NAND industry and Seagate in the areas of CapEx investment, zettabytes shipped, and CapEx efficiency with Seagate coming out on top.]

[IMG: Table compares average enterprise storage efficiency when using DRAM vs. SSD vs. hard drive.]

Recently, some AFA vendors have claimed that the flash industry could fully replace the entire hard drive industry’s capacity output by 2028. Let’s look at what kind of investment would be needed by the NAND industry to achieve this.

According to Seagate internal estimates, NAND suppliers would need to invest roughly $240 billion in additional CapEx to replace future enterprise hard drive demand — whereas hard drives themselves can meet that demand with an investment of only about $1 billion. The math speaks for itself. Hard drives continue to offer a radically more capital-efficient path to scale.

The chart below shows enterprise EB demand in 2024 and 2028, and the investment gap between hard drives and NAND technologies needed to meet it.

It’s clear that an investment of this scale — roughly $240 billion — is unlikely for an industry facing uncertain returns, especially after losing money throughout 2023.

[IMG: Bar chart identifies projected demand for exabyte capacity by enterprises.]

The latest NAND Flash Platinum Datasheet from TrendForce shows there are about 28 operating NAND fabrication plants (fabs) worldwide, as of 2024. If we use Kioxia’s Fab7 Phase 1 (opened in October 2022) as an example, building a single green-field NAND fab costs about $6.8 billion. Thus, the $240 billion incremental CapEx needed by the NAND industry would roughly equal 35 new fabs. This investment is dedicated primarily to enterprise data centre applications.

While the $240 billion in additional CapEx is required just to match future enterprise hard drive capacity, it's important to note that NAND fabrication plants serve far more than the enterprise SSD market. According to Yole Intelligence’s Q4 2024 NAND Market Monitor, the industry is projected to invest over $74 billion to produce 1.1 ZB of total NAND output across all markets.

When accounting for this broader production demand — including phones, tablets and other devices — total NAND investment needs will balloon to an estimated $414 billion, or roughly 50 new fabs. That is more than 15 times the projected 2028 revenue of the entire hard drive industry — estimated at approximately $22 billion, according to IDC³. This highlights a key contrast: hard drive manufacturing is almost entirely focused on enterprise-scale storage, while NAND fabs must serve many markets, spreading investment across fragmented and non-interchangeable use cases.

These facilities would need to be built, scaled, tested, qualified, and brought online to full production in the next three to four years, more than doubling the number of NAND fabs worldwide in less than four years.

Additionally, IDC’s 2024 StorageSphere report4 shows that in 2024, the ratio of existing hard drive to SSD installed capacity in cloud and non-cloud data centres was 7:1. IDC forecasts this dominant hard drive-based EBs ratio to stay around six to seven times for the foreseeable future, with a 21% compound annual growth rate (CAGR), leading to an installed hard drive capacity of as much as 10.5 ZB in 2028. Therefore, besides replacing all future annual production of new hard drive installations year by year as previously described, the NAND industry would also need to invest to replace the ageing portion of this 10.5 ZB installed base of data centre hard drives when they reach the end of their life cycles — an incremental investment well above the $414 billion needed just to replace the 2.4 ZB hard drive capacity expected to be delivered in 2028 for enterprises.

NAND solutions serve specific data centre workloads efficiently, but the idea that data centres will fully rely on them is littered with pitfalls. Beyond the risks and the implausibility of the NAND industry replacing the hard drive supply, volatile pricing adds another layer of uncertainty for businesses seeking supply stability and the best TCO for their storage.

The idea that NAND could completely replace hard drives in the foreseeable future is highly improbable, if not impossible. The industry would have to overcome formidable financial and logistical obstacles while investing a large amount of capital and technology in a market that isn’t prepared for a change that would upend current data centre architecture.

[H2] Truth No. 3: Workload profiles
[H5] Myth: Only AFAs can meet the performance requirements of modern enterprise workloads.
[H5] Reality: Enterprise storage architecture usually mixes media types, using disk or hybrid arrays, flash, and tape to optimise for the cost, capacity, and performance needs of specific workloads.
At issue here is a false dichotomy. All-flash vendors advise enterprises to “simplify” and “future-proof” by going all-in on flash for high performance. Otherwise, they p