The Key To Building Data Centers Is...
We found out what it takes to win biz at this morning's Bisnow Data Center Boom event at the Ritz-Carlton. (Sadly we can't say the same for US women's hockey.)
Sabey Data Centers prez John Sabey has a bifurcated location strategy, plunking data centers in both rural and urban markets. One sits in Manhattan—probably one of the most expensive places in the US, other than Hawaii, to have a data center—to serve its high population density of users. (A lot of people in Manhattan need data storage so they can go on social media and complain about living in Manhattan.) That center is tied to his Quincy, Wash., facility, where it’s very low cost and efficient for storage and compute cycles. He’s seeing that urban-rural mix of centers becoming a trend across the US. It’s a matter of finding what niche to be in and looking for customers that can make the right decisions.
ACCO Engineered Systems mission critical group project exec Frank Nascimento says last year was one of his company’s biggest, installing over 70 MW through a level 5 commissioning process. As competition in the colocation and wholesale data center market rises, one way to stand out is through design flexibility. Often it’s unknown what tenant will come in, so Frank works with a menu of “what ifs” and gets creative to provide as many scenarios possible. (That's also a great strategy for winning at Risk.)
Moss Adams Capital director Gregory Fink says the data center biz mixes tech with real estate unlike any other sector. Based on the growth of data needs over past 20 years—and the next 100—many are looking at ways to figure out how to play in the sector. When real estate folks look at investing in data centers, it’s not your typical VC or growth equity strategy; individual assets get capitalized separately and that's much more efficient, he says. Investors are looking for lower-risk assets and ways to get an assurance of cash flow and return of capital.
DPR Construction advanced tech core market leader Mark Thompson, who moderated, had almost $900M in revenues from data center construction last year out of its $2.5B total. With dramatic competition in the past five years in the wholesale data center space, he also asked panelists how successful developers and operators are differentiating themselves and winning today’s deals. Certifications, he notes, are appealing when it comes to scoring new work.
If your center doesn't have interoperability across IT and infrastructure, you're in the past. Ubiquity Critical Environments founder Sean Farney thinks the next evolution of development will be in underserved markets, like Jacksonville or Birmingham. There’s a place for smaller data centers there to serve smaller customers. There is also a need to have a closer choice as technology like streaming TV, video, and audio evolves. Netflix and YouTube, he says, need to have the ability to have content closer to users. (If there is any delay to House of Cards there will be a riot.) Those technologies required a distributed--as opposed to centralized--network of data centers.
Fortune Data Centers CEO John Sheputis says data centers supply what people are using more of every day; there’s a "ghastly" amount of storage and consumed bandwidth and computing processing power out there. The notion of a “one-size-fits-all” data center—if it ever was alive—is an endangered species now. The key is knowing who your customer is and what they’re going to do inside the data center. It’s important to put the right equipment in place in the right market--and market to the right set of customers. No one deletes things anymore, he notes (who's got the time?), so data centers are the ultimate storage business.
