Soben’s Data Centre Trends 2024 – Mid-Year Report

24th June 2024

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It’s been nearly six months since we released our annual data centre trends report – bringing together expert views from Soben’s data centre specialists around the globe. And already so much has changed. In the fast-moving world of data centre construction, a lot can happen in a few short months. So, we’ve checked in with our teams around the world to see how things are going.

Read on for their views on the challenges and changes so far this year – and their predictions for the rest of 2024. Here’s what Team Soben had to say about the top trends that continue to shape our industry.

If there’s one thing that’s clear this year, it’s that the market is showing no signs of slowing. There’s no doubt that AI is creating unprecedented demand for capacity – and that’s driving demand for space, but also for speed.

What’s changed?

Soben Robbie Druce

“In North America, we’re seeing a push towards larger capacity builds due to the AI boom – and that’s going to continue into next year. Campuses are becoming larger in megawatt capacity due to requirements for additional data, driven by the growth of AI.”

Robbie Druce

Associate Director – Americas

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Soben Mark Smith

“We all thought demand would increase, but this scale of demand is like nothing we’ve ever seen before. It’s an unbelievably buoyant market right now.”

Mark Smith

Director – Americas

[email protected]

What’s next?

Soben Robert McQueen

More, bigger, bolder and greener. Build programmes are not slowing, every MW matters. I think we’ll start to see more refurbishment and repurposing of ‘older’ data centres in response to changing demands, tech and squeezing as much efficiency and output from them as we can. I also see the continuing growth of ‘mainstream’ interest in the DC market, with bigger global investors seeing the market as the ‘safe-bet’ for the next decade.

Robert McQueen

Operations Director – EMEA

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Soben Robert Kim

“The space race continues: The need for space has people going crazy right now, I think there’s going to be some more desperate deals being done on B/C grade land.”

Robert Kim

Director – Americas

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Soben Martin Brown

“Demand will steadily increase due to high general data storage needs, accelerating demand for machine learning (ML), and progressing developments with Artificial Intelligence (AI). Tech companies and data center owner operators will address that demand by continuing to build thousands and thousands more MW of capacity. Here in Atlanta, ML and AI are so profound that Georgia Tech University has an Interdisciplinary Research Center called the Machine Learning Center. The center predicts AI and ML will become an interconnected portion of everyday life, which will only increase the need for hyperscale and edge data centers in the local market.”

Martin Brown

Lead Project Manager – Americas

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With increasing capacity, comes demand for power. The International Energy Agency has predicted global energy demand will double by 2026 – and others predict it won’t be long before AI data centres consume as much energy as a small country. With power availability already threatening project schedules, energy is top of everyone’s risk register.

What’s changed?

Soben Joe Cusick

“We’re starting to see campus developments of 800 MW becoming the norm. The change from the 40 MW campuses of recent years is staggering. But with this exponential growth comes huge pressure on power supply. There’s a finite amount of electricity we can produce right now, and this is starting to become a limiting factor for developers. Equipment manufacture, shipping and supply used to be the issue slowing down schedules, but this has been superseded. It’s definitely time to be looking at alternative and renewable power sources.”

Joe Cusick

CEO – Americas

[email protected]

Soben Martin Brown

“The level of concern around power availability is spreading beyond the industry. For example, the State of Georgia has been hotly debating whether to continue tax incentives to data center owner operators and technology companies through 2031. Many assumed that the State would reduce the tax incentives due to power concerns and notable strain on the local power grid, so the response to continue to incentivize data center owner operators to build in Georgia was unexpected.

Martin Brown

Lead Project Manager – Americas

[email protected]

What’s next?

Soben David Lymburn

“Power availability and efficiency are vital elements of early planning for every new development. My advice to developers is to prioritise the shift towards renewable energies e.g. solar and wind. Be more selective about site location – look for sites in cooler climates that require less cooling equipment and have existing renewable energy infrastructure, like Scotland.”

David Lymburn

Associate Director – EMEA

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What’s next?

Soben Pieter Schaap

AI requires immense amounts of power and there is no real tried-and-tested model for how to build these new power-hungry data centres … yet. Everyone is trying to do it right the first time, but no-one really knows what future AI demands will require.”

Pieter Schaap

Director – EMEA

[email protected]

Power isn’t the only thing in high demand. Everyone racing to develop in the same locations is playing havoc with supply chains – from critical equipment and materials to specialist sub-contractors. There’s only so much to go around.

What’s changed?

Soben Derek McFarlane

“One of the biggest challenges we’re seeing is securing the required resource to complete projects. This is wide ranging, including people, commodities, and equipment. Combined with the shortage of power, there are problems ahead to deliver the scale of development that is currently planned.”

Derek McFarlane

Managing Director – EMEA

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Soben Edward McCluskey

“There’s a finite pool of contractors and suppliers that can meet the market’s needs. With demand outpacing what the existing supply chain can deliver, all resources are stretched to almost beyond competence. New players are entering the supply chain which causes risks in meeting quality, time, and cost. It’s vital that the supply chain is thoroughly vetted to ensure that all parties have the experience and capacity to deliver. Be realistic with project budgets and timescales in the current market conditions.”

Edward McCluskey

Director – EMEA

[email protected]

What’s next?

Soben Rachel Striz

“Key to success is early engagement of planned resource. Far too often we see enquiries being issued to supply chains with unrealistic deadlines for deploying resources. Bring people on the journey together with a partnership approach. There is plenty of work around for everyone to be involved.”

Rachel Striz

Senior Project Controls Manager – EMEA

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Soben Ana Liesch

“Finding the right people is proving extremely difficult – especially in new markets. Success will depend on being proactive. Look as far forward as you can to secure people. Act decisively: If you have the right person but you’re waiting for something … don’t, that person will not be available in 2 months, and you’ll be starting from scratch. Work with trusted partners: everyone is in high demand and those clients that build long-term collaborative partnerships, rather than transactional relationships, will ride the waves better than others.”

Ana Liesch

HR Director – Americas

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Soben Martin Brown

“When planning to enter a market, select a General Contractor with a proven track record far ahead of the market entry date. Good contractors are inundated with projects and most have a secured pipeline with completion dates several years out. Identify the critical Electrical and Mechanical equipment packages through the design process, and quickly release them as Owner Furnished Contractor Installed (OFCI). If you plan to build multiple buildings on the same site, or to concurrently construct a building with similar requirements at another location, release all long lead equipment at the same time program-wide to start the clock on production.”

Martin Brown

Lead Project Manager – Americas

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With constraints on land, power, labour, equipment, and materials, it’s no surprise that developers are looking to new locations. Away from the over-burdened traditional hotspots, attention is shifting to regions with access to land, plentiful renewable energy, cooler climates, and welcoming business environments.

What’s changed?

Soben Conor Ford

“Talking to clients every day, the biggest change I have seen is how much the secondary and tertiary markets are coming into play. Mediterranean countries, Spain, BeNeLux and Eastern Europe are a big focus for a lot of the big companies now as they steer away from traditional FLAP-D markets. We’re seeing bidding wars between the largest hyperscalers for the last remaining rack space in the traditional markets which has forced others to look further afield.”

Conor Ford

Strategic Partnerships Executive – EMEA

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Soben Pieter Schaap

“The Middle East is picking up big time, which isn’t completely unexpected. I thought the FLAP-D markets were saturated, but I’m still seeing big projects in those areas being announced.”

Pieter Schaap, Director – EMEA

[email protected]

What’s next?

Soben Robert McQueen

“The scale of development required to keep up with demand is putting huge pressure on finding land with power availability at the level required. Every MW is critical to business functions. My advice to clients facing this challenge is to secure what they can and act decisively. Look at alternative independent power generation schemes that can be operational quickly. Think beyond FLAP-D and look at alternative locations. For big demands, look at smaller sites and ‘link’ them in data corridors.”

Robert McQueen

Operations Director – EMEA

[email protected]

Soben Robert Kim

“Look at what’s been happening in Atlanta, Georgia – the fastest-growing data center hotspot in North America. First the senate vote to remove subsidies, then the governors veto the bill. Public concerns definitely played a role in this political pushback. As the industry moves into new markets, closer to urban centres, expect more attention from local residents and be ready to engage the wider community to smooth the path forward.”

Robert Kim

Director – Americas

[email protected]

“Gone are the days when the industry could operate under the radar. As power-hungry campuses move closer to residential areas, data centres need to face up to their PR problem. Don’t underestimate the potential for communities to stall progress. Think about ways you can win hearts and minds and give back to local communities.”

Claire Jones

Group Marketing & BD Director – Global

[email protected]

With the AI boom, data centres are only getting bigger – and so are the size of the contracts. That’s got to be another huge incentive to change contracting models and execution philosophies. The winners will be those who get one step ahead of the market and start to experiment with new, more efficient ways of doing things – leaner delivery models and faster speed to market.

What’s changed?

Soben Pieter Schaap

“Traditional lease clients are now going to self-built models and are moving away from renting expensive MWs from developers.”

Pieter Schaap,

Director – EMEA

[email protected]

Soben Derek McFarlane

“Developers are beginning to look at alternative delivery models – PMC being the obvious example. Retrofit of existing facilities is now also beginning to pick up pace as new technologies provide more efficient use of rack space.”

Derek McFarlane, 

Managing Director – EMEA

[email protected]

What’s next?

Soben Robert McQueen

“One thing we’re seeing is the rise, success, and appetite for alternative delivery models like the PMC (Project Management Consultancy) model for data centre construction. However, for this model to work, my advice to clients is to look at the consultants who can bring together data centre experience, with consultancy skillsets, GC mindsets and the ability to quickly deploy. Look to consultants who can help ‘make things happen’. The market doesn’t have time for bureaucracy and sitting on your hands, it needs teams who are agile, decisive and action orientated.”

Robert McQueen, Operations Director – EMEA

[email protected]

Soben Leyla McIntyre

“On large-scale, complex programs, with so many moving parts, strong project controls are essential. Consider ways to incorporate an Earned Value Management (EVM) approach into your projects. EVM provides a robust methodology for tracking project performance – it’s like a project health monitor, allowing you to identify potential issues early and adjust execution accordingly.”

Leyla McIntyre,

Lead Project Controls Manager – Americas

[email protected]

Soben Scott Smyth

“The key to success is finding the right partner. In this complex environment, the old, siloed model doesn’t work anymore. Look for a partner who has the front-line experience to understand the commercial reality of complex projects, and the consultancy skills to leave no stone unturned. A contractor mindset, with a consultancy skillset.”

Scott Smyth, Group Founder & CEO

[email protected]

In the race to build build build, and in the absence of industry-wide controls, sustainability has largely been forgotten. But with regulation on the horizon and the industry increasingly in the public spotlight, the transition to net zero is back on the agenda.

What’s changed?

Soben Joe Cusick

“With data centres creating such a huge drain on the existing power networks, this is the perfect opportunity to drive the transition to renewables. Nobody wants to be using fossil fuels to drive these facilities. We’re starting to see discussions around small-scale nuclear power generation, although this isn’t without its issues. And of course clean power source such as hydro, wind and solar are going to be big. Look at Brazil – an emerging country not reliant on fossil fuels – over 80% of their power generation is from clean sources.”

Joe Cusick,

CEO – Americas

[email protected]

Soben Pieter Schaap

“As AI continues to drive an unstoppable demand for capacity, its impact on the Total Cost of Ownership (TCO) of data centres, and their sustainability practices, has become a hot topic of conversation. AI not only increases the demand for data centre resources but also presents opportunities to optimise efficiency and sustainability. To progress, the industry needs to embrace new technologies and practices that enhance sustainability and efficiency like digital twins and other advanced tools that can help improve planning and operational effectiveness.”

Pieter Schaap, 

Director – EMEA

[email protected]

What’s next?

Soben Mina Amani

“Going forward, sustainability will increasingly be a driver in both lowering operating costs and securing planning consents but more importantly minimising environmental impact. Work with a partner who can provide a detailed assessment of your carbon footprints, water usage, heat excess, etc. Having a granular overview makes it much easier to identify opportunities to decarbonise responsibly and affordably.”

Mina Amani,

Whole Life Carbon Consultant

[email protected]

Soben Robert Kim

“We’ve been racing so hard that I haven’t heard the S word mentioned with many developers at the moment. But we are still an energy hungry sector and enough of us care about it that it won’t be long before it comes back into the conversation.”

Robert Kim

Director – Americas

[email protected]

Soben Helena Mubiru

“There’s a huge opportunity around efficient cooling technologies. Data centres generate masses of heat and need constant cooling – a huge environmental burden in terms of power and water usage. To build a more “sustainable” data centre, more efficient cooling technologies, like liquid and air cooling, should be incorporated into the build depending on the location of the data centre and what you have access to.”

Helena Mubiru

Group Marketing & Bids Manager – Global

[email protected]

About Soben

Soben offers something different: world-class construction consultancy, paired with hands-on commercial experience. We increase certainty in our clients’ investments through cost, schedule, risk, and project management. With a track record of successfully delivering major construction projects, we pride ourselves on going the extra mile. And we always deliver on our promises.

We are working with the global leaders in hyperscale and colocation data centre development on some of the world’s largest, most complex schemes.

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