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The Data Center Revolution

7x24 Exchange 2020 Fall Magazine | The Data Center Revolution

By Eoin Kelly

The COVID-19 pandemic has changed how the world lives and interacts. Stay-at-home measures, remote work and social isolation rules have increased people’s reliance on the internet. These restrictions have forced many people to carry out their jobs in innovative ways that would not have been considered pre-pandemic. With internet usage swelling by over 25 percent in most major cities around the world, the data center sector has been impacted heavily, which has led to an increase in market demand.

Even as measures are lifted, and the first wave of the pandemic passes, there is no doubt that we will never return completely to the way we were before. According to the latest research, 62 percent of U.S. employees have been able to work from home during the pandemic, and many businesses expect to continue this way in order to improve employee satisfaction. With a renewed focus on remote work environments and regional data demands, the construction industry must redefine measures for managing and building data centers in this new environment.

Supply Chain Considerations graphic
Supply chains were one of the first areas of construction impacted by the COVID-19 pandemic, with manufacturing halted and borders closing. This means that most projects have already come to terms with how supply chains will impact the timeline of their construction projects. But as the economy begins to reopen, there is still a chance that supply chain disruptions will remain. The manufacturing industry has shifted its focus to critical supplies, while countries begin to reopen at different speeds. There are also fears of a second wave of the virus over the next few months. With many construction projects relying on a global pipeline of goods and materials, and the need for data centers increasing, construction companies must consider how to keep up with project demands while managing pandemic-related impacts to supply chains.

For existing supply chain partners, transparency and communication will become increasingly important. As the economy experiences a sharp downturn and businesses suffer, construction managers will require more insight into the financial situation of their partners. Transparency into cash flows can help construction managers understand if a financial arrangement needs to be implemented to help suppliers and to facilitate key deliveries. If a partner defaults, that will result in longer delays as managers attempt to find a new supplier. For this reason, it will also become crucial to support long-standing partnerships. Ensure that there is communications between partners and project managers about project priorities, the project timeline and any delays to the supply chain that may arise. By being open and understanding to key supply chain partners, projects can be delivered on time.

It will also be important for construction managers to diversify their supply chains to ensure that they have more options to meet their needs. When diversifying the supply chain, remember to consider local options. These will help give the economy a much-needed boost after the economic shutdown caused by the pandemic. It will also help ensure that the products are available in case of further border closures.

Modular Builds graphic
Although modular data centers were gaining momentum pre-pandemic, increased demand and new regulations will create a resurgence in modular construction. There are many benefits to modular construction, but the two main benefits, post-pandemic, include speed-to-market and the ability to have fewer people on-sites. With modular construction, data centers are fabricated in a factory and assembled on-site. Most data centers require similar components to function properly. By standardizing these components, it can decrease construction projects timelines. These data centers are still fully configurable and are scalable to meet increased demand, yet they can be built and deployed in a matter of months. They also allow for multiple sections of the data center to be assembled at once. Modules are manufactured at off-site factories, and at the same time, the data center substructure, core and shell can be constructed at the site. With the construction pipeline having been delayed for months, and remote work increasing the demand for data centers, any efforts to shorten project timelines will be increasingly necessary post-pandemic.

The other benefit to employing modular construction methodology for data centers, and for all construction projects, is because it limits the number of people needed on-site. Predictions of how construction projects resume after the pandemic still include visions of social distancing measures and split shifts to reduce labor on-site. As most components in modular construction are assembled off-site in factories, the personnel on-site are only those who need to prepare the site and assemble the components. With employees working simultaneous on-site and in factories, it makes it easier to create distance between people and teams. Until a vaccine is approved, these measures will be necessary to reduce the spread of the virus.

Changing Locations graphic
Due to the increased demand in regional data centers, and to alleviate current and future network constraints, there will also be a growing trend of data centers being built outside of Tier I markets. Tier I markets—North Virginia, Dallas, Chicago, Phoenix and the Bay Area—will still continue to see growth due to their proven success. They are also already established areas with ample power, space to build, accessible network infrastructure and tax incentives. Changing demands will also see Tier II and III markets increasing in popularity. These markets—including Denver, Portland, Atlanta, Minneapolis and Nashville—offer space to accommodate larger data centers. They also allow for cost savings in land, as they are typically not located in major metropolitan areas. As the distributed workforce grows, the logical solution is to build data centers in more locations and closer to end-users.

The Future of Data graphic
The data center sector will come out of the pandemic closures with renewed demand and increased reliance. In fact, in April, in the middle of the first wave of the pandemic, many data center giants hit a 52-week high. Although this is positive news for the data center industry, it doesn’t mean that it will not be immune to changes in the post-pandemic construction environment. With an increase in demand and a surge in remote working, the construction industry must consider new ways to increase speed-to-market while navigating the new normal.

Eoin Kelly is an Associate Director at Linesight. He can be reached at eoin.kelly@linesight.com.

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