A new era of data centre leadership
A new era of data centre leadership
30 June 2020 | Abigail Opiah
Abigail Opiah speaks to Chris Crosby, CEO at Compass Datacenters, about the company’s 2020 strategy in the midst of a global pandemic interlaced with a digital evolution.
Like most people, Crosby’s career in the data centre sector is the result of a series of events that he did not plan for. His initial exposure to the industry came when he took on a consulting assignment for CRG West, which became CoreSite. During the assignment, it became obvious to Crosby that the data centre business was in its infancy but the growth potential was enormous. To capitalise on the opportunity, he founded a company called Proferian to serve as the operating platform for private equity companies entering the data centre space, and GI Partners was his primary customer.
Proferian’s employees and GI Partners’ assets were then incorporated into Digital Realty Trust’s IPO. “My time at Digital exposed me to all of the elements surrounding data centre design, construction and operations, and the lessons learned during my tenure there enabled me to co-found Compass,” says Crosby.
Describing Compass Datacenters as “innovative, passionate and humble”, Crosby reveals that the company’s strategy is to build upon two major milestones achieved in 2019: the first being the company gaining easier access to capital due to rearchitecting its ownership structure, and the second being the strategic acquisition of ROOT Data Center.
In July 2019, Compass Datacenters announced it had completed the acquisition of Montreal-based data centre provider ROOT Data Center. The ROOT acquisition was the first by Compass Datacenters since its recently announced plan to develop up to US$3 billion in new data centre campuses, which included follow-on investments from existing funders RedBird Capital Partners, Ontario Teachers’ Pension Plan, and Azrieli Group.
“The combination of these two actions enables us to focus on adding capacity for hyperscale organisations across the most desirable markets in both the US and internationally,” he adds.
“From a fundamental perspective, life post-Covid won’t change our basic strategy, but it will accelerate it. I don’t think we’re alone in anticipating that we are going to see a prolonged period where demand for capacity will outstrip supply.
“We try to act as a partner for our customers, not a vendor, addressing the areas that challenge them versus what they can do on their own, while giving them the control they are looking for at a campus. From a Compass perspective, this only reinforces our desire to increase the scope of our market coverage and capacity both domestically and globally.”
Crosby adds that the acquisition of ROOT illustrates that Compass is not averse to using acquisitions to grow the company, but says that there must be a strategic alignment including the ability to integrate into the corporate culture.
“As potential opportunities arise, we’ll consider them, but at this time we still believe that the vast majority of our growth will be organic,” says Crosby.
Increasing the scope of the company’s market coverage is great timing as the world sees a complete digital shift caused by the global Coronavirus pandemic.
“Post-Covid, I expect to see a level of demand that will place a strain on the industry’s ability to keep up with supply. Certainly, from our perspective, that’s not a bad thing.
“But it will force providers to continue to streamline their design, construction, and supply chain processes to deliver new facilities on condensed timeframes in multiple locations,” Crosby explains.
“The capital requirements to maintain the pace of this level of construction will be intense and will also dictate the need to acquire existing capacity. As a result, I expect to see the industry go through a period of consolidation.
“I think we’ve built Compass to take advantage of opportunities that the accelerated rate of growth will present, because we have a platform that is built for scale and a high degree of remote management leveraging significant R&D investments since inception,” he adds.
When asked about having the power to change one thing about the industry and why, Crosby takes the conversation to workplace diversity. He explains: “Having grown up in the highly diverse telecom manufacturing space, I saw first-hand the benefits of diversity in gender, race and background when combined with a singular vision. The perspectives brought to the table made the result so much better.
“This is a major area of interest to us at Compass. Our chief innovation officer, Nancy Novak, has been a long-time advocate for bringing more women into the data centre and construction industries, and she serves on the boards of multiple organisations dedicated to these goals.
“Most recently she joined the iMasons’ advisory board with diversity being a major area of focus. Perhaps the best illustration of our commitment in this area is the fact that 80% of our on-site construction managers are women, and women comprise 50% of our construction team.”
Since the company’s inception, Compass Datacenters says it has embraced sustainability with the efficient use of land, green energy, water-free cooling, and building materials.
Recently, the company revealed its data centres will now be built with concrete using CarbonCure technology.
“We will be using concrete manufactured using CarbonCure’s technology to build our data centers and other areas of our campuses, sidewalks and roads, and I believe it is a milestone for the industry’s sustainability,” unveils Crosby.
“This commitment is illustrative of our overall sustainability philosophy. The production of cement, which is the primary component of concrete, generates a substantial volume of CO2. CarbonCure technology dramatically reduces CO2 production.
“For example, we estimate that using only CarbonCure produced concrete will reduce out footprint by 1,800 tons per campus. To put that in perspective, that is the equivalent of driving a car four million miles.”
Crosby is sure that Compass Datacenters have a different perspective on sustainability than a number of its competitors.
“Right now, it seems like sustainability is synonymous with green power [supply]. That is certainly an element of sustainability, but it is not an endpoint,” he says.
“From our inception, our sustainability strategy could be described as wholistic. That means that the design, construction and on-going operation of a data centre must take into consideration the impact on the land it resides on, the preservation of natural resources, and even the materials used to build the facility, as well as the operation and sustainability of that facility during its useful life.”
Global data centre build-out and the overlapping demands of IoT, cloud computing, streaming media, gaming, and AI are leading to a bottleneck in the data centre market.
But Crosby recognises a different type of noticeable data centre market trend. He says that one of the trends that has caught him by surprise is the growth of so-called non-traditional markets in the US
“Even five years ago, we talked primarily about Tier I markets or ‘NFL cities’ as almost exclusively the being locations to build data centres,” he says.
“Now, the desirability of markets like Northern Virginia, Phoenix and Dallas isn’t going to fade anytime soon, but with data centre applications driving towards the edge, building facilities in places like Nashville, Raleigh and Columbus becomes a much more attractive option than ever before.
“In the next five to 10 years, I think we will see growth in international markets that have not previously seen significant data centre investments.
“We believe that the data centre growth will follow the GDP growth by region, nation and city. This is a function of regions that haven’t been anyone’s primary focus — specifically Africa, Latin America and the Middle East, which are quickly emerging as their infrastructure continues to be built out and as internet penetration increases. For example, the internet penetration rate for Africa is less than 40% and below 70% for both the Middle East and Latin America.”
And Crosby concludes that there are a number of variables that can affect growth in these areas.
He says: “When you factor in their projected level of population growth and the technology requirements necessary to support that growth, coupled with the need to develop more diversified supply chains, they offer a good deal of opportunity for data centre providers seeking to expand their global footprint.”