As businesses feel increased pressure to accelerate their digital transformation to remain competitive in a post-pandemic world, the demand for data center capacity will more likely than not continue its upward growth trajectory. That said, planning capacity under these circumstances, to quote one industry analyst, is akin to “driving in a hailstorm at night without headlights,” especially when so much of the world’s workforce remains remote, and more and more people now rely on technology to shop, socialize, study and entertain themselves.
Streaming media, video conferencing apps such as Microsoft Teams and Zoom, cloud collaboration platforms, social media, educational portals, virtual private networks (VPNs) and cloud gaming are all seeing historically high-usage levels. In turn, a companies’ ability to meet the demands for these digital communications, online commerce and entertainment platforms is dependent on the capacity of data centers, placing increased pressure on the speed of new data center builds and expansions. Put another way, as businesses struggle to accurately forecast capacity demand and, in some cases, struggle to keep pace with it, speed is the new scale, and adaptive infrastructure is the means to intelligent and sustainable growth.
A Strategic Response to Capacity Demand
It’s an oversimplification, and wholly inaccurate, to believe that any organization has unlimited capacity. In fact, companies must plan capacity in advance—and for when and where it’s needed—of projected demand. If a company has invested in too much capacity in anticipation of demand, then the resources sit idle as wasted capital in a data center. If they’ve invested in too little capacity, businesses and consumers won’t receive the performance they require, customer experience will suffer and the organization will have lost out on revenue.
Now, more than ever, we can readily affirm that data centers are critical infrastructure. In order to answer the heightened customer demand for new data center builds, help customers penetrate new markets and expedite the expansion of existing data center campuses when growth opportunities arise, a strategic response built around three key pillars is required.
Capital
The central pillar of meeting data center capacity demand is a strong capital foundation backed by sustainability-linked financing. For a certain set of marquee customers having a data center operator that is a good steward of the environment by offering sustainable options for power, cooling and growth is now table stakes. Many data center providers talk a good game where sustainable infrastructure and environmental stewardship are concerned, but sustainability-linked financing is putting the money where one’s mouth is. With accelerated digital transformation and technology use, we’re now seeing unprecedented investor demand, and sustainability-linked loans are among the industry’s fastest growing subsets.
In addition to lower interest rates, sustainability-linked financing is directly tied to the data center provider’s environmental, social and governance (ESG) objectives, and how well it performs vis-И-vis its renewable energy targets, sustainability reporting transparency and Key Performance Indicators (KPIs) related to safety. If the data center provider delivers on its commitments, the company benefits from discounted interest rates; and, if it doesn’t, the rates either stay the same or go up, depending on the actual performance. If you’re going to talk the talk, you’ve got to walk the walk.
Infrastructure
The second pillar of effectively meeting customers’ current and future capacity demands is delivering incrementally scalable, flexible and adaptive infrastructure. For example, a vendor managed inventory (VMI) program that encompasses a 50MW rolling pool of dedicated inventory and features factory-based production of mechanical and electrical plant modular containers that are then delivered on site when additional capacity is needed. This mitigates deploying and stranding resources that are not being utilized for an extended time, while enabling faster speed-to-market. With this methodology, new data center builds can be delivered in as few as six to nine months, with customers initiating at one density profile and scaling up in real-time as their business demands, by virtue of drop and connect capabilities.
The infrastructure pillar also extends to developing and deploying innovative and proven data center technologies, including cooling systems that utilize up to 80 percent less energy and 85 percent less water as compared to traditional cooling systems, with the ability to run waterless as required. This allows customers to scale vertically up to 50 kW per rack without stranding capacity, which also significantly reduces environmental impact and improves sustainability. Much of the current and future demand for computing resources requires high-density power capabilities to support next-generation technologies, including AI and machine learning applications.
Providing companies with greater visibility into their infrastructure via a customer portal that offers predictive analysis also facilitates more effective capacity planning and forecasting across clients’ entire data center footprint. Customers need to be able to view the infrastructure in their data center operator’s facilities as an extension of their own.
Although a strong capital foundation and innovative and adaptive infrastructure are essential to a data center provider’s ability to meet customers’ speed-to-market and capacity demands, the third and most indispensable pillar is the human element.
People
Granted, I only can speak in this instance from my own perspective, so I only will say that Aligned was founded by a team of data center design specialists, builders and operators who believe that the data center industry needs to continuously evolve. We’re engineers, but we’re also scientists, which means that we’re not just focused on solving the challenges in front of us, but also anticipating what’s ahead.
A key principle of our modus operandi is to hire and empower people to feel secure in their responsibilities as well as their freedom to sometimes disagree with one another. Fostering open communication channels and encouraging constructive disagreement at every level of the organization not only builds team trust, but very often leads to the most effective customer solutions. The consulting firm McKinsey & Company calls this the “obligation of dissent”. At Aligned, we simply refer to it as “integrity”.