Matthew Bourne is director of strategy and development at Stack Infrastructure
While many technology-oriented businesses were able to adapt to the changes forced by the COVID-19 pandemic, others weren’t set up to switch as rapidly. That includes the data center industry, where some of the most fundamental operations – such as the process of data center site selection – don’t lend themselves to a quick and easy digital transformation.
Yet data center demand continues growing, and more of them must be built, which means the work of site selection must continue. Data center leaders and their real estate teams now have to navigate the in-depth, complicated process of identifying sits that meet data center location requirements without the tools, travel, or communications normally at their disposal.
Here’s a look at four key considerations and steps to take for conducting data center site selection and general operations in the COVID era.
Do the due diligence the right way, even without travel. Travel has been a vital part of data center site selection. While visiting a site to see if it meets all the data center location requirements isn’t normally the most time-intensive exercise, conducting property due diligence without being onsite presents challenges at the essential initial stage of site selection.
These critical exercises usually involve face-to-face meetings and extensive conversations with local officials and your own internal teams. Properly conducting thorough due diligence will require a good amount of planning, coordination, and relying on local partners.
Be prepared to spend time interacting — whether by video, phone, or just exchanging emails — with economic development authorities, city planners, and representatives from various utility companies. You’ll also have to set aside time for conversations with environmental firms and regulatory agencies to evaluate and codify the environmental risks the site already has, as well as any further environmental impact a future facility there may have on the surrounding area.
These conversations extend to your internal teams too. Internal security, risk, operations, and construction teams will want to get their hands on as much data and insight as possible to ensure you’re collectively making the best data center site selection decision. With everyone working remotely, you’re likely to ultimately rely on third-party contractors as an extension of your team to be the eyes and ears on the ground.
Choose partners wisely. With no travel as a near-term option, data center developers will need to find trustworthy and experienced third-party partners to represent their interests in finding a site that meets their data center location requirements.
Building a data center — be it a single colocation building or a sprawling hyperscale campus — is a huge investment and undertaking. With so much capital and business momentum at stake, data center site selection is no time to cut corners or introduce unnecessary risk to the project by merely outsourcing to the cheapest option available. Instead, you should consider an alternative perspective and:
- Seek true local experts who can provide more history, context, and insights about the area that you just won’t get from maps and documents.
- Solicit proposals from suppliers and investment partners with an established presence and influence in the development areas.
- Expand your vetting process beyond the standard RFP process to include deeper dives into each contractor’s relevant work experience, how well-resourced and financed they are to take on and successfully complete your project, and talking to previous customers about their experiences.
You might also consider running finalists through a range of hypothetical and practical scenarios to gauge their competence and evaluate whether their processes and procedures align with yours. Ultimately, this may extend building and deployment timelines, but the imperative to increase the time spent on due diligence will minimize risks to the project.
Don’t miss the forest for the trees. When you can’t visit a location, it’s easy to take a site opportunity at face value and miss some undiscovered gems that you’d otherwise see in person.
Everything from a local political environment to misconceptions about the relative security or growth of an area can unnecessarily color a data center site selection team’s opinion of a location. And without the ability to easily travel there to scout it out, that opinion may win out in the decision-making process.
However, a great opportunity that meets the basic data center location requirements is great regardless of common perceptions. Geographic proximity to internet exchanges, the local customer base, local tax incentives for land and equipment, and sufficient and scalable energy supply constitute a site worth investigating.
COVID may have changed how a data center site selection team does business, it hasn’t changed the reasons it does business.
Have the right project management systems in place. Effective project management is key to choosing a great data center location and a smooth launch in normal times. Severely restricted travel and an emphasis on video conferencing elevates project management from “key” to “indispensable.”
Managing various threads of a single project (accounting for energy, environmental, design, and development-related activities) is hard enough even when in-person, on-site collaboration is possible. Without it, it’s vital to have a project management system to help keep you on top of all the minute but crucial details of every aspect of a proposed project.
Whether you choose to manage it in a complex spreadsheet or with purpose-built project management tools, having a systematic accounting process to control multiple moving parts of a site selection and development project should be a high priority.
A new approach now and for the future. COVID turned much of the world completely on its head. In the year since the pandemic’s onset, the data center industry, like so many others, has begun adapting to the new demands and realities of doing business in the COVID era.
Remote work is now a mainstay, which significantly impacts fundamental operations like data center site selection. While some may lament the loss of or reduction in business travel they’re accustomed to, if they account for these four considerations will find themselves well-positioned to capitalize on new location opportunities faster than competitors and place their businesses in prime position to support the continued rapid growth the industry is projected to undergo.
Opinions expressed in the article above do not necessarily reflect the opinions of Data Center Knowledge and Informa.
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