Outsourcing and a move towards the cloud is driving the growth of the hyperscale data centre.
Two major trends are shaping the global data centre landscape. The first is outsourcing, or the move from in-house data centres to facilities and services provided externally for organisations.
Outsourcing can be defined as the process of sourcing facilities, facility services, IT capacity or IT services from an external provider. The outsourcing of IT assets is particularly common, as it reduces payroll costs and ensures that companies remain up-to-date with the latest technological advances.
The second related trend is a move away from ‘legacy’ IT (or physical servers) towards non-physical, ‘dematerialised’ infrastructure and components. This includes components and services that are created within and sourced from virtualised, cloud-based or software-defined environments.
Instead of companies investing in physical hardware, there is a preference to ‘rent’ server space from a cloud provider, which ultimately ends up being stored in a data centre.
These trends have created a requirement for larger facilities, which can operate on the principle of the provision of standardised delivery models and services on a utility basis.
Since the business model of cloud provision is based largely on volume and efficiency of delivery, the ‘hyperscale’ data centre has emerged.
As many organisations with medium and smaller data centres have shut their own smaller facilities and migrated workloads into cloud and colocation, the profile of the world’s data centres will continue to move towards larger facilities.
Importance of scalability
To operate as a viable business model, the hyperscale facility has changed the design, construction and fit-out practices that existed during the ‘legacy’ era. This is not surprising, considering the scale of transactions that companies that operate these facilities deal with.
Furthermore, the business model of a hyperscale data centre is based on the capability of its digital infrastructure to be able to disrupt legacy business models by being extremely efficient.
To achieve this requires the provision of facilities that can deliver enormous economies of scale, and that are also, from an IT perspective, scalable and able to cope with peaks and troughs in demand. Such facilities are highly networked and sit at the centre of huge webs of connected users and devices.
Also, the hyperscale data centre is able to analyse and model the massive amounts of data flowing through their systems to offer insights into user behaviour that can be used to generate further income streams.
Lifecycle of a data centre
Data centres may have a functional life of up to 20 years which, at an average rate of IT renewal of around three years, may involve six or seven upgrades. Change is led by the evolution of the processing, storage and networking equipment and systems that are housed in the data centre and which represent the core purpose of its construction.
The major responses of data centres to IT transformation over the past decade can be summarised as growing larger, denser, more focused on efficiency and demand, and operated increasingly through software and software definition to meet a greater volume and diversity of IT workloads.
Constructing a hyperscale data centre
One of the enablers of demand/utility-based IT has been the development of modular units, which can be built progressively into facilities as demand increases.
While the debate between the benefits of modular versus more traditional construction methods has run in the industry for most of the past decade, modular will take an increasing share of global data centre build business, largely on the back of the hyperscale facilities, where staged construction programmes mean that capital costs can be matched more closely to incoming demand.
The process of constructing these huge data centres is highly commoditised – the IT end facility package is viewed as a standard product, separate to the construction of the facility. The process is modularised, whereby common commercial module/parts are deployed in a standardised and flexible configuration, which will also support online expansion.
Most components can be manufactured offsite and can be assembled, disassembled, renovated, moved easily to the site and replaced by ‘hot-pluggable’ components.
In terms of location, many of these companies choose sites close to sources of renewable power and where the climate is cool enough to reduce the need for electrically-powered cooling. Some have also made equity investments in clean energy generation as a means of offsetting their carbon footprint.
Can smaller data centres compete?
There is no technological reason why smaller data centres cannot adopt the configurations and principles used by hyperscale data centres, and many have adopted their software definition, open source data centre fabrics, and the migration to faster network speeds.
However, the issue is not one of technology but one of return on investment – for smaller data centres, the costs of refreshing an on-premise data centre environment would probably not be justified, particularly if the benefits of such environments can be accessed through outsourcing.
This, in turn, will create further demand for the hyperscale data centre which is set to dominate the global market.
By Anne Corr, UK Market Advisor, Construction
The housing crisis in the UK is an issue fueled by the rising population and soaring property prices. The challenge to keep up with these demands is not a new one, so perhaps it is time to start looking at new solutions.
Part of the challenge is also limited space to build, as well as limited access to skilled workers and the shortage of new homes being built is an issue in London and other UK cities. Modular offsite housing construction is one method of helping alleviate these pressures.
The Irish construction industry may be able to offer a remedy for this solution, using innovative modern methods of construction which can enable the majority of the build to be manufactured offsite. The UK and Ireland hold extremely strong trade ties and trade in Irish construction products and services to the UK has increased by 68% in the past five years (since 2012).
The benefits of building offsite are clear, and indicate an obvious choice when planning future developments, yet some developers are yet to develop the appetite and choose to continue with more traditional construction methods.
However, in the face of the current housing crisis in the UK the industry must innovate to meet the challenges and demands of society. Collaboration across the UK and Ireland can help with this; leaning on each region’s skills, innovation and ambition to solve the current situation.
Off-site construction technologies have advanced greatly in recent years and can offer shorter build times, better quality, better energy efficiency, less waste and lower cost for buyers.
The manufacturing of homes in factory conditions is unaffected by unpredictable factors such as the weather, therefore avoiding delays in construction. For example, heavy snowfall from the “beast from the east” forced Britain’s construction industry to grind to a halt, causing the biggest fall in activity since immediately after the Brexit vote.
One Irish company that delivered speed through its delivery of residential homes for Ealing Council is Extraspace Solutions, a provider of fast track offsite solutions throughout the UK and Ireland. The homes were completed in seven weeks, from breaking ground to handing over the keys.
With the main components of the homes being built offsite in a factory setting, the main site is able to facilitate other work which in turn speeds up the entire construction process.
Buildings that are fabricated offsite, are subject to strict, factory-controlled specifications. This means the assets created are less likely to have faults and more likely to perform as designed, once again saving time as there is little need for re-working of materials onsite.
Techrete, who design, manufacture and supply architectural precast cladding, worked in collaboration with architects to provide off-site solution for a 24-storey residential tower. They produced brick faced pre-cast panels manufactured offsite which they then installed to incorporate the glazing into the design of the panels.
Working in tandem with time saving is cost saving. Offsite construction can considerably reduce costs, as there are often fewer deliveries and hours needed to deliver a project compared with traditional build. Reduced energy costs are another tangible benefit of offsite construction, as fewer deliveries mean less fuel is used.
A reduction in cost in staffing can also be achieved, as the skills needed to assemble the modular buildings are less than those on regular construction sites. This also addresses the skills shortage currently faced by the industry.
Building in a factory environment allows for higher levels of control in terms of energy and emissions, meaning less waste is emitted into the environment. Often materials transported are almost flat-packed and there is a wider scope for the use of recycled materials.
Reducing energy consumption can contribute significantly to the reduction of air pollution; Cygnum is an Irish company which utilises Passivhaus, an energy efficiency performance standard, resulting in ultra-low energy homes through its robust simple designs and materials. The homes are extremely well insulated and designed to be substantially heated from passive gains such as the sun’s heat. Typically, these homes require up to 90% less energy for heating compared to a conventional house.
Construction is Ireland’s largest sector and maintains the highest market value of the indigenous Irish industries, positioning the country at the forefront of introducing innovative technologies within the industry to UK.
It’s imperative to find a quality solution to combat the UK housing crisis, and through harnessing Ireland’s support and the use of new and innovative technology it is absolutely a step in the right direction.
The Greenbuild International Conference and Expo is one of the largest trade events for sustainable building practices in the world. Greenbuild is presented by the US Green Building Council (USGBC) and brings together some of the most influential thought leaders in the construction industry.
Tens of thousands of attendees gather at the conference every year from across the green building sector, spanning commercial and residential professionals, architects, building owners and operators, students, advocates, and educators.
This year, Enterprise Ireland supported a group of Irish companies with products and services for the sustainable building and construction industry. The companies attended the expo in Chicago, Illinois to learn about new opportunities and trends in the industry and to have the opportunity to network with key people from the industry. And while in Illinois, Enterprise Ireland also set up meetings with some of the largest construction companies in Chicago.
“We used the opportunity of being in Chicago to meet with key people in the construction industry,” said Caroline Donnelly, Vice President of Construction Products and Services, Enterprise Ireland, USA. “Our team gained valuable insights on industry trends and opportunities, and our companies received great feedback on their products and services.”
Donnelly added that many good connections were made throughout the expo and with the networking events. Companies that the team met with included Clune Construction, Gensler, DLR Group, Gilbane Construction, and Walsh Construction among other that we met at the show and networking events throughout the conference.
“Irish construction companies have an unequaled and well-earned reputation for delivering large, complex projects internationally,” said Donnelly. “Irish companies follow a winning formula to deliver a flexible, problem-solving approach and a commitment to embracing the latest advances in construction technology.”
Attending Enterprise Ireland-supported construction companies
Providing software solutions and expert services to assist the Construction, Engineering & Facilities Management Industries.
Offering complete façade solutions by meeting the design, manufacturing and installation needs of for contractors and clients.
Integrated Facilities Solutions
Developer of software and value-added services that provide a secure data environment from design and construction through the delivery of project close-out and handover.
Providing cloud-based software tools for architects to optimize the design of building façades by working closely with leading international architectural experts.
Helping create the healthiest possible indoor environments through science and certification and by helping the entire construction supply chain.
Trade relationships between Scotland and Ireland are on the rise, with exports in each direction increasing by over 100% since 2012, according to research by Enterprise Ireland, the trade and innovation agency. In 2017, Irish-Scottish trade exceeded £1.8 billion, up by 130% over the last five years. In addition, Ireland is also the fourth largest Foreign Direct Investor in Scotland.
To strengthen these trade ties even further, Enterprise Ireland led a trade mission to Scotland to further discuss how businesses in both regions can better collaborate. Minister for Business, Enterprise and Innovation, Heather Humphreys TD said, “Bilateral trade between Ireland and Scotland is strong, exceeding £1.8 billion in 2017 and there is immense opportunity to build on this for both countries. As Brexit negotiations continue, the Irish Government, through Enterprise Ireland, is committed to consolidating and growing Irish exports to Scotland and the UK now and into the future. Engaging with senior Scottish business and political leaders is critical to this effort: to realise the scale of this opportunity for both Scotland and Ireland.”
Given the close proximity of the markets and shared business culture, the Scottish trade mission reaffirmed the importance of strengthening trade relationships, particularly in the current Brexit climate. The two-day mission emphasised the opportunity for increased collaboration between the two countries and helped facilitate Irish and Scottish companies to explore areas of potential collaboration and power future economic growth between both countries.
Trade mission strengthens partnerships
56 Irish companies participated in the trade mission to Scotland, highlighting the strong business prospects for Scottish-Irish collaboration, as well as raising awareness of the scope and scale of the opportunities. With a focus on Ireland’s strengths across fintech, cleantech, agritech, automotive, construction and digital technology, Enterprise Ireland reinforced the synergy across the two countries especially focused on talent, ambition and innovation, as well as broader infrastructure opportunities in food and beverage manufacturing and offshore wind.
Deirdre McPartlin, Enterprise Ireland UK Manager, said: “Scotland and Ireland have always had strong trade ties and through the trade mission we aim to help deepen existing relations and grow the market opportunities that currently exist between the two countries particularly within construction, agritech, financial services and off-shore wind sectors.”
The mission focused on Glasgow and Edinburgh, as well as at various other sites around the country, including a visit to the state-of-the-art timber facility of Glennon Brothers, a company supported by Enterprise Ireland, in Troon. Seminars, roundtables and networking events covered themes including environmental performance, innovation in asset and wealth management, and the changing landscape of Scottish Farming.
McPartlin said: “Our trade mission to Manchester earlier this year and our trade mission to Scotland, reflects the strong appetite from Irish companies to continue to grow their customer base and diversify within the UK’s regions.”
This mission has already helped to facilitate trade deals between O2 and ScotRail, and ABP Food Group and Central Solutions, as well as IDASO opening its first UK office in Edinburgh. These are exciting developments despite the current uncertain economic climate, and Enterprise Ireland looks forward to welcoming further prosperity of Irish and Scottish trade relations.
Innovative digital and off-site solutions are in the spotlight again, with recent developments in VR (virtual reality) and AR (augmented reality) technologies demonstrating incredible potential. UK construction designs are being optimised digitally in ways that would take weeks or even months if done by traditional methods.
In parallel to these developments, trade in Irish construction products and services to the UK has increased by 68% in the last five years. This increase, combined with trade of €1.29 billion of construction products and services to the UK in 2016 alone, indicates a clear upward trend in demand for innovative digital and off-site construction solutions provided by Irish companies.
Here are five key trends to watch:
- BIM: The future for the built environment
Last year, the UK Government made use of Building Information Modelling (BIM) mandatory for new capital funded public sector projects. As many Irish construction services and engineering companies gain a foothold in the UK market, they have access to BIM frameworks and guidelines for projects and products of this nature.
Technologies that once seemed only imaginable in science fiction, such as connected data, robots and VR, have become familiar solutions and procedures. As the trend moves towards BIM Level 3, 3D printing is reaching a point where components can be printed rather than shipped, opening up the option of virtual walkthroughs and intelligent smart cities.
- The growth of digital disruptors
Companies such as Uber and Airbnb have disrupted their industries and with new business models on the rise, we are likely to see the trend replicated across the construction industry. Disruptors challenge the status quo and this is what we are seeing in construction as technology evolves rapidly.
One of the key reasons Irish companies are so successful in UK construction, often winning contracts for complex, high-tech builds, including data centres, hospitals and commercial buildings, is because they are at the forefront of innovation in the sector. According to the BIM report, published in May 2017 by Construction IT Alliance (CiTA) in association with Enterprise Ireland, the trade and innovation agency, Ireland has made remarkable progress in recent years in advancing BIM capability. The report found that 76% of Irish respondents were confident in their organisation’s BIM skills and knowledge.
Embracing BIM as more than a tool, and instead considering it as a a series of processes that help to speed up the building programme and provide structured, accessible information for clients once a project is completed, is key. There is also an opportunity for companies to extend BIM even further by incorporating 4D and 5D modelling, which allows real-time visualisation of a project’s progress and for individual costs to be attached to different, specific elements.
- Looking to off-site construction and support
Another key area of innovation that Irish companies have focused on is off-site fabrication. Manufacturing components off-site allows less room and opportunity for mistakes. It also enables Irish companies to carry out a considerable amount of work before a building project starts on site.
Kirby Group Engineering took advantage of both prefabrication and BIM in a recent project that involved converting an existing warehouse and office building into a mission critical Tier 3 data centre for a leading provider of carrier-neutral data centres. Through digital fabrication and modelling, the process was completed in just 20 weeks.
- Build-to-Rent vs Build-to-Sell
It was estimated that the British construction sector needs to bring in one new recruit every 77 seconds to solve the country’s housing crisis – a staggering statistic. The supply of new homes through the “Build to Sell” model is constrained by a number of factors, including land availability, affordability, uncertain duration for ownership and increases in tax, duty and regulations. At the same time, the planning pipeline of the build-to-rent market is growing.
Irish companies that can help tackle the current industry supply issues around skills and capacity shortages are of particular interest to the UK. Companies like Extraspace Solutions, Cygnum Timber Frame and Techrete offer off-site manufacturing capability that reduces the number of operatives on site.
- A lean future for UK construction
Lean methods and processes across the supply chain are contributing to improvements in quality, productivity and the health and safety of Ireland’s construction industry. Benefits are accrued through the elimination of wasted time and from fewer delays on site.
Several Irish multinationals are embracing lean principles to win business abroad and construction companies like Jones Group, Mercury Engineering and Kirby are already exporting lean services abroad – securing more work, reducing costs, and offering better value to clients.
As a new chapter of economic uncertainty begins, Ireland continues to be a first-point partner for the UK and we expect trade relationships between the UK and Ireland to deepen even further over the coming years.