A day does not go by this year without news of another major investment in data centers or the infrastructure—including facilities, power, and cooling systems—that is needed to run data centers. Notwithstanding all the data center buzz, there has not (yet) been a lot of focus on the next phase of the data center life cycle, the phase after “build,” which we refer to as the “operate” phase. With thousands of data centers already operational and many others in various stages of “build” with plans to be operational on tight time frames, it only follows that the opportunities and challenges of the data center operator will gain more attention in the evolving data center conversations.
To recharge the discussion, we have highlighted below four key issues impacting data center operators:
- Third-Party supply chain challenges: Data centers require sophisticated and in-demand hardware, components, software, and connectivity solutions to process, store, and secure data (the Processing Infrastructure), as well as the facilities equipment, systems, and services to support the operation of the Processing Infrastructure, including UPS devices, generators and cooling systems. Chip manufacturing and availability has already been identified as a real and imminent challenge. With the proliferation of data centers, procurement of other critical infrastructure and services may result in long wait times and higher costs. Data center builders and operators need to map out early procurement needs, taking into consideration delivery timelines (which often are estimates rather than commitments) and implementing contingency plans. In support of their supply chain management, data center operators need to establish procurement and contracting functions to assist with and manage the many contracts that need to be put in place to facilitate the operation of a data center. A structured and orderly third-party vendor management approach will facilitate ensuring that the necessary products and services are in place, with visibility to costs and short- and long-term business case impact.
- Security and privacy standards and compliance: Data centers at their core are about the storage and processing of data, and therefore a critical part of their operations is implementing appropriate cybersecurity standards. Data center security is mainly aligned to auditing guidelines set out in the System and Organization Controls (SOC) as defined by the American Institute of Certified Public Accountants. Additionally, data centers that are designed to meet industry and regulatory standards such as PCI, HIPAA, and GDPR must also meet regulatory requirements typically set at a local country level. To do this (and to ensure users that the operator is doing this), data center operators will have a robust set of policies in place or meet (and certify with respect to) such industry and regulatory standards to demonstrate the level of security and privacy processes and procedures that are being followed.
- Customer requirements: If the data center is servicing third-party customers, depending upon the data center’s model (e.g, co-location or custom), the data center operator may need to take into account a customer’s specific requirements (which may include requirements of the customer’s customers). Understanding customer requirements during discussions to onboard a client is important, as they may impact personnel shift requirements, power needs and facilities builds. Customer requirements will typically include compliance with the security and privacy standards or regulations mentioned above, but can also extend to compliance with other regulatory requirements (e.g. financial services-specific regulations in certain territories, which impose requirements such as the need to facilitate audits by regulators) or specific availability or redundancy requirements.
- Ongoing energy needs: Permitting, procuring, and accessing the energy needed to run a data center is undoubtedly part of the investment and build considerations. These needs do not go away and may evolve over the life of the data center, and are an ongoing issue for the data center operator. With an increasing need for energy and cost efficiency, and corporate and investor requirements to meet ESG targets, there are an increasing number of solutions available to operators which are designed to help optimize their energy use, which can range from improved monitoring solutions through to new systems such as the solutions which reuse waste heat.
The foregoing list is not an exhaustive list of issues impacting data center operators. Look out for more insights and dialogue regarding the opportunities and challenges facing data center operators on our Data Center Bytes and Tech & Sourcing blogs.
For more information on data center operations, register for our upcoming webinar on March 19, 2025.
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