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Emerson Finds 4 Prototypes to Transform Data Centers

Premium provider of critical infrastructure technologies Emerson Electric Co. 's EMR business segment, Emerson Network Power, recently released a summary report. It highlights the four emerging archetypes that will eventually revolutionize data center in the near future. According to the company, this research offers a fairly clear peek at the changing data center landscapes that will help it adapt to the dynamic market trends.

The report identifies the following four archetypes that will be quintessential for data centers in the future:

Firstly, a surge in Internet usage and number of connected devices brings in its wake increasing cyber crime and security breach issues, which looms large on an organization's profitability. This calls for superior-quality cyber security systems like "out-of-network data pods", which will take precedence in future data center designs.

Next, the company's report identifies under-utilization (only 5-15% of the computing capacity) of servers as a persistent problem in data centers. Emerson Network Power believes this problem can be solved with a "shared service model" approach that sells the excess capacity.

Thirdly, data centers are currently experiencing a phenomenon, better known as "computing at the edge" of a network, that requires "distributed architectures". Originally introduced by technology giant Cisco Systems, Inc. CSCO , fog computing is an advanced technique that promotes edge-computing systems. With other IT majors following suit, this practice will likely dominate the market in the near future.

Finally, the pressing concern of carbon footprint reduction has been compelling organizations to accomplish the goals of sustainability and corporate responsibility. Emerson's report highlights that use of alternative sources of energy will eventually take center stage in future corporate affairs.

Factors like cloud computing, sustainability, cyber security and the Internet of Things are driving a paradigm shift in the information and communication technologies industry that will create both opportunities and challenges for companies like Emerson. As a result, the company believes that prior identification of archetypes will allow it to enhance productivity, slash operational costs and maximize agility. This, in turn, will help the company develop close customer relationships and reap maximum benefits, going forward.

Emerson Network provides power-backup systems and embedded power, precision cooling, and connectivity technologies for data centers, telecommunications networks and other applications. Of late, the company is making concerted efforts to maximize the growth potential of its Network Power segment, which accounted for 19% of total sales in 2015. In Jun 2015, the company had disclosed its plans to spin off its network power systems business through a tax-free distribution to shareholders. We believe such strategically timed moves will likely strengthen the company's portfolio, boost its potential and maximize shareholders' value.

Emerson currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry are CUI Global, Inc. CUI and Dycom Industries Inc. DY . Both stocks sport a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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