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This blog post was written in collaboration with guest blogger, Juan Carlos Londoño, who is Presales Director at Ingenium.
The data center market is booming, with a projected growth of over 10 percent through 2030. Data center and colocation providers are well-positioned to benefit. However, building a data center takes time. Speed to market is essential, enabling data center and colocation operators and their customers to accelerate revenue generation.
Delays in data center construction are all too common. As with any building project, issues often emerge during the design, engineering, and construction phases, extending timelines. So, it’s critical that data center and colocation operators work with vendors that have the experience and expertise to streamline the whole process, from planning and design to engineering and operations.
Gaining a competitive advantage
Here are five important considerations for data center and colocation providers when developing an approach for speed to market.
1. Boost Competitiveness
Data center and colocation clients often are under pressure to deploy new applications and services to improve operations, competitiveness, and customer experience. If clients have trouble getting an operator to deliver what they need in a timely manner, it will hurt their business because they will not be able to scale as expected. Trust in the data center operator may also be compromised, potentially compelling the customer to consider other options.
2. Accelerate Revenue Generation
Data center projects require substantial CapEx outlays involving investors who want a return as quickly as possible. Delays at any point in the process make investors impatient and, even worse, postpone revenue generation. A common cause of delays involves not having a future-proofed design or a forecast of customer needs. If the customer’s requirements aren’t aligned with the capacity to cover their demands, it can lead to time-consuming design and engineering changes.
3. Minimize Missed Opportunity Costs
Every client that walks away because of a protracted timeline is a lost opportunity. In some cases, the operator may incur monetary penalties as prescribed in a client service level agreement (SLA). The best way to minimize these risks is through coordination. Data center operators improve their chances of avoiding costly delays by working closely with reliable engineering partners, building contractors, and equipment suppliers. Remember, strong partnerships improve the ability to meet customer expectations and strengthen provider reputations.
4. Streamline the design process with partnerships
A collaborative approach between operators, engineering firms, building contractors, and manufacturers enables each party to understand and support the requirements of the others. For instance, when an equipment manufacturer and design team work together, they can expedite the process if a customer has a specific request. Working together, they can quickly determine if the request is feasible. Conversely, by collaborating, they may develop design improvements and submit them for client approval.
5. Choose solutions that enable agility
Clients prioritize flexibility and scalability, so it’s important to plan accordingly with designs allowing for future expansion of compute capabilities. In some cases, a prefabricated modular data center solution may provide the best approach, especially when clients urgently need to deploy applications at edge computing sites. Working with a manufacturer that can deliver modular options gives operators the flexibility and agility to fulfill all types of customer requirements. A prefabricated modular data center delivers speed to the market by providing an accelerated way to set up a data center.
Partner with data center experts
When data center operators seek out the right partners, they benefit by accelerating time to market for their data center and colocation projects. Customers also benefit because they get faster results from their technology investments. This means both the operator and customer get to accelerate their ROI and service monetization. In today’s hyper-competitive markets, that’s a game changer. Learn more about how to increase speed of deployment with Practical Considerations for Implementing Prefabricated Data Centers.
Expert Eye
Juan Carlos Londoño is Director of Presales at Ingenium. He shares his expert views, accumulated throughout his long career in the data center industry.
1. What challenges are currently hindering speed to market for data center operators?
There are a number of challenges, and I consider the following three to be the most important:
a) Delays in the supply of equipment: While supply chain issues have improved for most suppliers and products since the pandemic, we continue to see very long delivery times, especially when higher-capacity equipment is involved. Therefore, it’s essential to have formal agreements with suppliers in place that properly anticipate when each project phase is implemented. However, even with formal supply agreements in place, it can be difficult to meet the deadlines that new large projects require.
b) Limited capacity of expert personnel: There is a shortage of professionals with the appropriate skills, abilities, and experience to properly handle the current large number of edge projects and deployments of hyperscale data centers in the region. Having the support of consulting companies in with the right expertise is essential to managing the projects smoothly.
c) Energy availability for large projects: Hyperscale projects and large colocation data centers require high power capacity. Without the appropriate technical due diligence, planning, management and coordination with local electric power companies, a project can get significantly delayed or, in some cases, it could be cancelled. Again, having the right consulting company here is vital.
2. Large hyperscale and colocation projects typically involve several suppliers, contractors and professionals. Who should lead the project?
It is critical to have an experienced team with all the right skills, experience, and local knowledge to manage projects smoothly.
It’s also helpful to have a dedicated and suitable PMO (Project Management Office), run by a company with specific data center expertise, to act as an “orchestra conductor.” The PMO can ensure harmony and compliance in the tasks, scope and responsibilities of each of the parties. The PMO is essential to avoiding delays in execution, cost overruns, change orders, and do-overs.
A PMO is also key to project speed, from beginning to end. The PMO provides support during the pre-construction stage with a peer review of the design, submittals and work schedule, and in supporting, coordinating and/or managing all the paperwork required by the project owner. The paperwork includes permits for construction and operation permits, and feasibility and connection of public services.
3. Why is it necessary to have a dedicated project office to meet deadlines, manage permits, power requests, building permits, among other tasks?
All data center projects, especially hyperscale or large colocation projects, are linked to a business plan that includes development time, costs, income and expenditures. Delays caused by problems in development and execution can affect any of these variables, and even make the project unfeasible.
On the other hand, variables that can cause delays in project execution are quite broad. They include inadequate planning, ignorance of the requirements and times associated with the previous construction and operation procedures and processes that must be carried out, which vary country to country, and even in some countries, vary between cities or states. Delays also can result from a design that is not totally aligned with the requirements of the end customer, and the lengthy delivery times of certain equipment. A PMO with experience and local knowledge of the market must take control of all these variables to help the owner minimize the risks associated with each stage of the project, from planning and pre-construction to construction to operation, in addition to variables related to project type and location.
Otherwise, leaving so many “loose threads” in the hands of multiple stakeholders increases the probability of a failed project. At the very least, it will cause delays in project execution, which may result in higher costs and challenges for the owner.
4. Finally, what other relevant aspects can improve the speed of commercialization by operators?
The data center that begins operating today was planned and designed a long time ago – usually at least two to three years in advance. So planning today, and developing future-proofed design prototypes, will improve the speed of future projects. These future-looking designs, alongside flexibility and implementation agility, will help meet the need for greater power density in the rack, as driven by AI developments. These new designs require breaking with old paradigms, and an open mind about how to design data centers.
On the other hand, because of the need for greater productivity and efficiency with fewer resources, data centers must become increasingly automated. This requires adjusting many of the current processes and operating procedures, including change and capacity management, and creating new routines for reviewing, monitoring, and controlling the automation tools themselves. In this sense, a more frequent review and update of the operational framework of the data center is necessary.
About the Authors:
Matthew Baynes is Vice President, Design & Construction Partners for Cloud & Service Provider Segment with Schneider Electric which is a global leader in sustainable data center technology, providing adaptive, resilient, and efficient solutions. Schneider Electric partners with data center operators for complete lifecycle solutions, from design and construction to providing operating and maintenance services. Discover more about Schneider Electric’s data center solutions.
Juan Carlos Londoño is Presales Director at Ingenium, which is one of the leading firms in consulting, engineering, construction and operation of data centers, mission-critical infrastructure and facilities in Latin America. Ingenium is known for their experience and partner relationships to deliver speed to market for operators to make them more competitive. Learn more about Ingenium.
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