Industry executives and experts share their predictions for 2023.  Read them in this 15th annual VMblog.com series exclusive.

Data centers face three key challenges heading into 2023

By Alpesh Saraiya, senior director, data center offering management, Honeywell Building Technologies

Data centers play a critical role in keeping the global economy productive. Demand for data storage and processing has become insatiable worldwide, which makes it more challenging than ever to operate and scale these facilities efficiently. Managers also face mounting pressure to make their operations more energy efficient. Data centers consume about 3% of the world's electricity - more than most countries - and produce 2% of global carbon emissions - about the same as the entire airline industry.[i ]

Given the exponentially increasing demand, managers are often forced to do more with less, while at the same dealing with tougher internal environmental, social and governance (ESG) directives and more stringent regulatory landscapes. When preparing for 2023 and ahead, operators should factor in three significant trends: continued pressure to cut operating costs; increasing demand for more sustainable facilities; and a growing shortage of talent interested in and qualified for managing data centers.   

Rapid scaling with a sharp focus on managing OpEx

To meet the unrelenting demand, both hyperscale and colocation data center operators have aggressively acquired smaller firms - but this practice has created as many problems as it has solved. For one, it creates a pastiche of ‘snowflake' designs - no two are exactly alike - which means major headaches for integrators and heftier operating expenses (OpEx) for owners.

Blueprinting data center designs to achieve commonality across facilities has thus become a key strategy for ‘doing more with less.' While many see it as a critical step toward developing and implementing global design standards, operators must still comply with local and national building codes, financial accounting laws and security regulations.

Many data center managers are also streamlining their operations with well-defined, purpose-built workflows and operational management tools to further reduce OpEx while still protecting uptime. To this end, some are installing cross-domain, site-level monitoring and management platforms to automate as many tasks as possible, thereby easing workloads and reducing the chances of human error, which caused major outages over the last three years at 40% of organizations surveyed by the Uptime Institute.^[ii]

Tougher internal and external sustainability mandates

Data centers face mounting pressure from governments, clients and stockholders to become more sustainable and energy efficient. A sustainability strategy is no longer simply a ‘nice to have' item; in the future, it may determine whether an operator succeeds or fails. With financial firms at either end of the transaction - as both clients and providers of capital - operators will face an additional hurdle of expectations when seeking to fund future projects, particularly as pressure increases on private equity and real estate investors to make greener investments.[iii] Further, even clients shopping for data center colocation service providers are now examining ESG profiles to account for upstream Scope 2 and 3 carbon footprint.

As data center operators struggle to scale up across different geographies, they face a range of ever-stricter local and national regulatory landscapes. Many of these include increasingly rigorous sustainability and ESG financial reporting standards that will phase in over this decade.

Governments including Ireland, the Netherlands and Singapore are requiring owners and operators to submit a detailed sustainability plan before granting them approval to build a new facility or expand an existing one. Singapore, in fact, imposed a moratorium [iv] on new data center projects in 2019 and kept it in place until January of 2022. Applicants for new projects now must explain how they will meet tough new standards enacted to protect the nation's land, water and renewable energy resources.

Increasingly, governments are expecting data centers to measure and disclose their carbon footprint and demonstrate progress toward reductions. There are numerous ways to reduce carbon emissions - no one size fits all - but cost and new technologies usually factor into the equation. Among these, operators are evaluating a variety of energy optimization techniques, from control loop optimization to liquid cooling options, especially as high-performance computing (HPC) and AI/ML applications become more ubiquitous and more demanding in heat dissipation requirements. Air cooling systems simply can't keep up with the cooling needs of continually evolving, higher-density racks for these next gen workloads.

Liquid cooling leverages the higher thermal transfer properties of special fluids, providing as much as 3,000 times the efficiency [v] of air cooling. With more and more businesses integrating HPC applications driven by AI - which require tremendous computing power - operators are realizing that the time has arrived to seriously incorporate liquid cooling in their architecture and roadmap.   

The human element: a looming talent shortage

Not least among data center challenges is a widening skills gap and the ongoing ‘great resignation.' Some see this as a result the industry's ineffective efforts to actively recruit and retain talent[vi] from the vocational schools over the last two decades. The industry is also dealing with an aging workforce of subject matter experts - those qualified to teach entry-level employees - many of whom will retire within the next 10 years. Yet Gen Z workers who have the skills and aptitude to pursue such a career are not seeing careers in data centers as an attractive option. Nevertheless, there's promising initiatives in the industry to source candidates from a pool of disciplined and well-qualified military veterans.

As operators develop plans for 2023, they should be considering strategies for scaling up intelligently, reining in OpEx and prioritizing sustainability efforts. They should also take a hard look at how they can make the profession - and their facilities - more attractive to the next generation of talent.     

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ABOUT THE AUTHOR

Alpesh leads data center vertical global offering management at Honeywell. Based in Silicon Valley, U.S., Alpesh brings more than 20 years of outcome-driven success managing the business of secure, connected products across a number of industries, including data centers. Alpesh is passionate about innovation in sustainability and energy conservation, especially enabled by AI/ML.

Alpesh's experience includes working for and advising Silicon Valley CEOs on strategy, marketing, product, and business development. He has led the webOS Core for LG Electronics' Smart TVs and other connected IoT applications such as smart home, smart car, wearables and mobile. Other experience includes steering the Genesis Microchip digital TV business to an acquisition exit by STMicroelectronics. Alpesh also held senior marketing roles at Broadcom and C-Cube Microsystems, as well as R&D positions at IBM.

Alpesh holds a Master of Science degree in Computer Engineering from Syracuse University and a Bachelor of Science degree in Electrical and Computer Engineering from University of Tennessee, Knoxville.

[i ] Deloitte, Big data or low carbon? Can you deliver more IT with less carbon impact?, by Richard Pone, April 22, 2019. [Accessed November 10, 2022] 

[ii] Uptime Institute, 2022 Outage Analysis finds downtime costs and consequences worsening as industry efforts to curb outage frequency fall short, June 8, 2022. [Accessed November 10, 2022]

[iii] S&P Global, Sustainability is no longer a 'nice to have' goal for the data center industry, by Kelly Morgan and Filippo Bonanno, June 8, 2022. [Accessed November 10, 2022]

[iv] Data Center Dynamics, Singapore lifts data center moratorium - but sets conditions, by Peter Judge, January 12, 2022. [Accessed November 10, 2022]

[v] Business Insider, The rise of AI requires so much supercomputing power that companies are turning to liquid cooling, as much as 3,000 times more effective than using air, to keep it all from overheating, by Andy Patrizio, October 9, 2020. [Accessed November 10, 2022]

[vi] Data Center Knowledge, Why isn't there more young talent in the data center industry?, by Skyler Holloway, September 15, 2022. [Accessed November 14, 2022]