Hyperscale and colocation data centers to positively impact businesses in future
Hyperscale and colocation data centers to positively impact businesses in future
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A new survey from Schneider Electric says 80% of respondents believe hyperscale and colocation data centers are the next wave.

Energy management company Schneider Electric released a new report detailing the impact of hyperscale and colocation on data center value chains.

In a lengthy explainer on the topic, ZDNet’s Scott Fulton III said hyperscale data centers are “less like a warehouse and more like a distribution hub.”

“Although today these facilities are very large, and are operated by very large service providers, hyperscale is actually not about largeness, but rather scalability,” he wrote in April.

“A colocation agreement, like any other real estate deal, is a lease on an area of space within the lessee’s data center facilities. It enables a tenant to deploy its own equipment in a building that’s typically large, very well-managed, strongly secured, and well-powered and cooled.”

Hyperscale data centers mainly focus on maximizing cooling efficiency, allocating electrical power in discrete packages, ensuring electricity availability and balancing workloads across servers, according to Fulton III.

Schneider Electric’s “The Impact of Hyperscale Data Centers: How the Wave is Changing the Value Chain,” features interviews with more than 200 construction managers, electrical contractors, consulting engineers, and distributors/integrators. More than 80% of respondents told Schneider Electric researchers that hyperscale and colocation data centers would have a positive effect on their industry in the near future. 

As hyperscale has become more popular throughout industries, the design and build of data centers has changed and has even shaped how people throughout the value chain work.

SEE: Special report: The cloud v. data center decision (free PDF) (TechRepublic Premium)

“Hyperscale has fundamentally transformed the data center market,” said Frank Nash, a senior director at Schneider Electric. “Its scale and complexity have had a similarly profound impact on what we call the value chain, the ecosystem of people involved in bringing such immense capacity to life.”

Companies like Google, Amazon, Microsoft, Facebook and Apple have spent billions on hyperscale data centers in 2018 according to a Synergy Research Group report. In 2018, the hyperscale sector had a capex of almost $120 billion.  

Half of the people who took the survey said that hyperscale was a top industry trend. All four groups of respondents said hyperscale projects would help them increase profit margins, innovate, develop expertise, and learn how to scale deployment. 

“What today’s report reveals is that the value chain is poised to take advantage of hyperscale’s potential and is evolving with the era, but persistent and new challenges are driving a modern approach to engagement and collaboration,” Nash said. “Each member of the value chain plays a more significant role in the process to make it faster and more cost-effective than ever before.”

For engineers and construction managers, a benefit was how fast it could be deployed. The financial impact of late projects affected the speed of deployment, according to the survey. 

When asked about the problems associated with hyperscale, respondents listed security, cost, tighter timelines, and a lack of skilled labor as their main barriers to success. Price was most concerning for construction managers, but both manufacturers and contractors listed it as a chief concern.

“Consulting engineers feel the most pressure in this area as their success largely depends on others,” the survey said. “The sheer size of hyperscale builds involves thousands of pieces of equipment, so control is essential. One minor issue can rapidly become systemic.”

While these were all major concerns addressed in the survey, one of the biggest problems facing every level of the value chain was the drastic decrease in trade laborers. The survey cites statistics from the US Government that say there will be a shortfall of 6,000,000 trade laborers by 2024, leaving enterprises scrambling for talent.

“We’re now starting in high school and showing students that the trades are noble vocations and rewarding professions,” Rosendin Electric senior vice president Bill Mazzetti told the survey. “We also have an aggressive intern program that allows kids from the corporate environment to enter construction. There’s so much cool technology in our industry now. It often surprises them.” 

The main way respondents said they were dealing with the shortfall was by upskilling workers within the company and training them to work with hyperscale and colocation projects. Resilient Solutions CEO Dennis Cronin told Schneider Electric’s survey that the industry needed different kinds of facility operators for hyperscale. 

This new generation of operators must have a firm grasp of mechanical, electrical, and information systems while also being able to adapt to evolving technology.

“I’m a third-generation electrician, and the apprentice program hasn’t changed since my grandfather’s day. Out of our 3,300 employees, 67% are Millennials or Gen Z,” said Chris Jansen a senior vice president at Solutions Operations Faith Technologies. “We work the way they want to work by providing things like online training and luring them with exciting technology like lasers and 3-D modeling. We also have to give them a clear career path.” 

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Technician works on a laptop in a data center

Image: iStockphoto/EvgeniyShkolenko

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