Project Management Institute

Data's New Digs

Organizations around the World are Building Massive Storage Facilities

The world runs on data—exponentially growing amounts of data. It all has to live somewhere, so tech giants and internet service providers are launching projects to build massive new facilities. Construction in the global data center market is expected to hit US$69 billion by 2022, up from US$33.9 billion in 2015, according to The Insight Partners.

By 2022, construction in the global data center market is expected to more than double to US$69 billion.

Source: The Insight Partners

“Every provider is building data centers, and the market is growing at a rapid pace,” says Sophia Vargas, analyst, infrastructure and operations, Forrester, San Francisco, California, USA. Apple, for instance, is slated to spend US$1.4 billion to build two storage facilities on 2,000 acres (809 hectares) in Waukee, Iowa, USA this year. The organization is also building or expanding facilities on sites in other U.S. states, as well as in Denmark, China and other countries.

Although data centers all basically serve the same function, executing these projects isn't a plug-and-play process. The facilities require reliable power, access to water for cooling towers, large spaces to create physical security barriers and to expand for future growth, and minimal risk of damage due to earthquakes, floods and other natural disasters. Project owners also need to balance the cost and accessibility of resources, like power and water, against other demands, such as access to talent.

And then there's the shifting regulatory landscape. It's spurring global organizations to align their data center project portfolio with impending legal requirements.

“A big trend affecting the industry is data sovereignty,” says Mason Mularoni, senior research analyst for PMI Global Executive Council member JLL, Boston, Massachusetts, USA. Cloud providers and multinational companies face new laws requiring that customer data be stored within a country's borders, he says. The clock is ticking. “They have to get these centers up and running before the laws take effect. It's spurring a lot of international projects that will continue to grow throughout the end of the year.”

Local Connections

Given their unique site requirements, centers are often built in relatively remote locations, regardless of the country. So when a global organization like Microsoft or IBM decides to build a data center in an emerging market, finding the talent and resources to ramp up a project can pose a challenge.

It's often necessary to bring in experienced out-of-town design and construction teams to work with local trade contractors to deliver the project—even if that means extra training and oversight, says John Walters, senior vice president, project and development service group, JLL, Chicago, Illinois, USA. For instance, when IBM opened a data center in 2016 in Johannesburg, South Africa, it partnered with local IT company Gijima and telecommunications company Vodacom.

“[Data sovereignty laws are] spurring a lot of international projects that will continue to grow throughout the end of the year.”

—Mason Mularoni, JLL, Boston, Massachusetts, USA

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Relying on local teams can add time and cost to a project, but it demonstrates a commitment to the community, which can be important to winning the support of regulators and citizens, Ms. Vargas says. “They have more incentive to support projects that engage local businesses,” she says. “Local customers prefer organizations that not only speak their language, but understand their local customs and dynamics.”

But sometimes a talent crunch is inescapable—local teams in, say, remote parts of Texas, USA may lack data center project experience. In this situation, having a strong overall project management team and offering on-site training and oversight can fill gaps, Mr. Walters says. “Bringing in a project manager who has the expertise and experience to manage the process can overcome a lot of challenges and ensure the project is done right.” —Sarah Fister Gale

Bigger Is Better

Data centers are increasing in quantity—and growing in size.

KOLOS’ DATA FACILITY ►

Where: Ballangen, Norway

Size: 600,000 square meters (6.5 million square feet)

Opens: 2018

Located 140 miles (225.3 kilometers) north of the Arctic Circle, the U.S.-Norwegian firm's proposed facility would be the world's largest data center. It would also be completely powered by hydroelectric and wind power.

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GUANGZHOU (NANXIANG) CLOUD SERVICE DATA CENTER

Where: Shanghai, China

Size: 13,600 square meters (146,389 square feet)*

Opened: July 2017 (phase one)

The joint venture between Huade and Guangzhou Nowtop is one of the first in southern China to adopt natural cooling technology, allowing the facility to save up to 30 percent on cooling costs compared to traditional centers. *Size after phase two of the project is completed

TAHOE RENO I

Where: Reno, Nevada, USA

Size: 120,774 square meters (1.3 million square feet)

Opened: February 2017

Service provider Switch has plans to make this US$1 billion facility, which is already the largest co-location data center (meaning multiple organizations use the facility), even more ambitious. The organization plans to eventually expand the facility to 7.2 million square feet (668,902 square meters).

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