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What lies ahead? Vantage’s senior leaders weigh in on data center trends for 2021.
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What lies ahead? Vantage’s senior leaders weigh in on data center trends for 2021.

This past year was a busy one for the data center industry. While the COVID-19 pandemic brought with it many challenges, it also created increased demand on the data center sector as digital services and solutions became increasingly more essential for the everyday lives and work of individuals across the globe.

The importance of online and digital tools for education, entertainment, collaboration, and productivity increased the demand for data center capacity and drove many data center providers to expand their footprints – opening campuses in new markets and expanding in current ones. In fact, in 2020, Vantage alone more than doubled the size of its portfolio – growing its presence with strategic investments in data center campuses across Europe, the UK, and Canada.

But as the calendar turns to a new year, we can’t help but ask, “What’s next? What can we expect for Vantage, and the industry as a whole, in 2021?”

To find out, we posed those questions to the senior leadership team at Vantage. Here is what they think will be the trends, events, and technologies that will impact and shape the data center industry this year:

Sureel Choksi, President & CEO
Global expansion will continue to be driven by cloud proliferation. I think the industry will also see an increase in M&A, largely driven by customers wanting to work with a smaller number of strategic suppliers.

In addition, there will be increased focus, investment, and measurement on sustainability.

Chris Yetman, Chief Operating Officer
In 2021, I think there will be an increased focus on sustainability, including where our power comes from, and on exploring opportunities to reduce our carbon footprint.

Other focal points for this year will be more automation and the sharing of telemetry data with customers, as well as more standardization as it relates to design and construction to provide customers with a consistent experience within and across campuses.

At Vantage, we will also roll out new self-service features via our customer portal.

Justin Thomas, Chief Technology Officer
2020 and the COVID pandemic brought with it many challenges but also redefined the baseline as it relates to cloud services, cloud demand and the overall landscape of how we deliver data center capacity.

The sudden increase in remote work and e-learning, and the collaboration needs resulting from them, such as video conferencing, has made capacity planning for hyperscalers, data center providers and the supply chain that supports it very unpredictable.

We’ve seen a premium to deliver capacity in shorter and shorter durations. I see this translating to pushing more things out of the field/construction site and into controlled environments through prefabrication. This will minimize on-site risks and inherent delays caused by potential outbreaks of COVID in today’s world, or more traditionally, will drive repeatability given the constraints of skilled laborers – such as electricians and plumbers – and how these factors are impacting data center providers’ ability to deliver quickly.

Vantage has and will continue to evolve our product and the design that supports it to enable rapid deployment and modularization, pre-fabricated skids, and a kit of parts that is flexible to adapt to local market conditions. This approach will enable us to continue meeting and exceeding customer demands/requirements.

Sharif Metwalli, Chief Financial Officer
I expect the continued demand trends from technology and cloud/hyperscale providers for data center capacity will result in additional positive momentum for Vantage and our peers related to future debt and equity financings. As investors continue to see stable operational performance with our customers, and continued growth in appetite for more power and space, investors are likely to modify their risk-adjusted return requirements to Vantage’s benefit. This will increase our ability to further grow the platform to meet demand.

Evidence of this trend can be seen in the migration of equity investors in the sector, which started as traditional private equity, then infrastructure investors, and now in select cases, yield type investors. We will continue to see this migration, which will bring the cost of capital in the sector down.

On the debt side, the current interest rate environment remains issuer-friendly but could see risk if inflation trends begin to materialize due to expanded government spending. Base rates may begin to trend up, even if the Fed continues to indicate they will keep rates low for the foreseeable future.

Lee Kestler, Chief Commercial Officer
From a customer perspective, I believe 2021 will bring enhanced trends toward cloud computing adoption at scale. We will also see the prioritization of energy generation as a driving force as the industry matures faster than ever. 2021 will see renewables dominate the U.S. capacity with solar leading the way.

In addition, technologies that will have a direct impact on our sector will include the continued roll-out of wireless and fiber networks beyond the high traffic corridors and the increased advances in energy storage technologies. Speed to market for all supply chain components of the expanding digital infrastructure ecosystem will be the biggest challenge.

Vantage has been working on streamlining our ability to deliver quickly and meet customer timelines while increasing our commitments to safety and just-in-time inventory.

Steve Conner, Vice President, Sales & Solutions Engineering
2020 was a year that was driven by COVID-19. Unlike many industries and markets, the data center industry was positively impacted as millions of people flocked to Zoom, Microsoft Teams and similar platforms to continue conducting business remotely. Even as life settles back to our version of a new normal, many organizations realized the power of “work from home,” and growth in both cloud and remote work applications will only continue to grow in 2021 and beyond.

Technologically, 2020 saw the continued maturation of Artificial Intelligence (AI) applications, with many of the major players introducing or expanding AI into their core offerings. 2021 promises to continue that trend. As AI and similar workloads continue to become more commonplace, we can expect to see an increase in average kW/rack densities.

Lastly, as larger markets continue to densify, the network becomes even more critical. Providers will need to expand their view of the network world to include upstream routes and the associated impacts, from pathing and latency perspectives, both of which can have impacts on wide-area deployments.

Sam Huckaby, Vice President, Construction
Time to market is continuing to be the largest driving force in 2021. The trend for more speculative building in markets that historically didn’t see that type of building will start to emerge.

The provider that has capacity available in three or fewer months will be winning the deals. This has a cascading effect on construction and the equipment supply chain. In addition, we will continue to see how we can deliver capacity at a fast pace by minimizing capital outlay.

This will naturally drive to more modular builds and design standardization.

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