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Data Centre Titans: From Dot-Com to Data Centres with Derek Webster

Fri 2 Feb 2024

In the eighth edition of Data Centre Titans, we hear from data centre consultant Derek Webster.

Derek reflects on his journey from the early days of navigating the ‘wild west’ of digital infrastructure to leading a consultancy that tackles complex data centre challenges.

Our conversation delves into the challenges of community relations and public perception in data centre development, emphasising the importance of repositioning data centres as crucial to digital transformation and sustainability.

Derek also shares insights on emerging technologies and practices poised to revolutionise data centre sustainability and efficiency.

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What is your role and how did you get to your current position?

I am the founder MD of a boutique data centre consultancy. Which means we work on a wide range of thorny data centre questions to solutions.

This includes areas of data centre strategy/deployment (build), country and site selection process and advisory, business growth and transformation (find the value), working with PE/investors pre-investment with a future look (challenge the future ‘what if?’), business and asset value propositions (market facing), working with boards, governments, enterprises and land owners.

What is one major challenge you have faced in your career, and how did you overcome it?

I was challenged to join and take a company into the European dot-com boom as a design and build contractor.

To out-win established contractors in delivering multi-data centre builds over multiple-nations, we showed clients we were agile, had speed to deliver, challenged norms, and there was no need for external consultants. Booking production slots for long lead items and partnering with clients was also key.

Prior to that in the 1990s, it was clear to me very few knew what digital infrastructure really was and you needed to pioneer your own way in what was the ‘wild west’ of a new sector. This was when the words data + centre was not in the lexicon of terms – server farms, comms room, computer room were in common usage.

Can you share a pivotal moment in your life that has significantly influenced who you are today?

In my working life being told ‘you like a challenge’, which was code for we have a tricky problem to be solved.

My introduction into digital infrastructure – or soon to be called data centres – was facing new things like computer rooms and communication masts, and I was expected to handle it.

My attitude of liking a challenge and ‘can do’ perspective came from my youth while looking after myself attending school. So, my need to get things done and gain a wider perspective was inherent.

In your experience with data centre strategy and investment, what do you consider the most under-recognised challenge facing the industry today?

Community relations, public understanding, and perception challenges.

Informing and possibly changing the local authority and public perception of data centres to a digital ‘heart and lungs’, and to the positive effects of digitisation, their low operational and footprint to community impact. Power provision can be an issue, but re-use of energy has great potential.

Local authority planners and permit providers should be included in these conversations, but I still see clients and the local authority struggling to agree the most appropriate ‘change of use’ or planning class – which is B8 in the UK – when it should have a class of its own.

Governments also tend to overlook foreign direct investment opportunities and the positive impacts of the sector for jobs and lowering regional carbon footprints.

Governments need to do more to prepare the landing strip for investors to land, build and operate. Malaysia, Sweden, and Ireland have been successful in this regard with extraordinary historic tech successes.

The lack of public awareness in the data centre sector’s good governance, high standards, pushing efficiency, and its ever-evolving approach to sustainability, including power source provision, water reduction, vast improvements in shell and core building efficiency (i.e. PUE), cooling reuse of energy potentials, and choice of locations.

Let’s not forget the EN 50600 as the European standard for data centre infrastructure, which covers design, power, cooling, security and sustainability. It is well worth implementing, and why not as a global standard where applicable? Yet, there are still lots of misconceptions to be dispelled.

How can we shift the perception from data centres being significant energy consumers to champions of sustainability and social impact?

The data centre sector needs to own its own story, selling and storytelling more engagingly and effectively. One hundred years ago, a person would have been exposed to no more than 50 books in a lifetime, now it’s over 600,000.

Data centres are like a bus – they are big, can carry 60 people, and uses energy. Which is better 60 cars (i.e. legacy sites) on the road or one efficient bus (i.e. cloud/colocation data centre)?

There are studies that the digital economy can reduce the intensity of power consumption. We need to take a macro view and study this more to create and disseminate sector stories.

In 1989, when the World Wide Web was given free to the world, the global population was 5.2 billion and annual global fossil CO2 emission stood at 22.3 gigatonnes. 30 years later, with the Internet covering almost every inch of the globe, 7.7 billion of us lived on Earth and global emissions stood at 33 gigatonnes. This indicates we are doing much more per Watt as the global population rises.

ICT is at the core of the green agenda. The Global Enabling Sustainability Initiative (GeSI) stated in its ‘SMARTer2030- ICT Solutions for the 21st Century challenge’ that ICT can reduce greenhouse gas emissions (GHG) by 20% versus a ‘no change’ approach by 2030 – equivalent to holding emissions to 2015 levels – providing £8.6 trillion ($11 trillion) in new economic and social benefits, and an estimated 30% increase in agriculture yields for less water. The World Economic Forum (WEF) have similar findings.

Indeed, GeSI has been vocal for some time about how digital technologies can dramatically reduce carbon dioxide emissions and global warming potential (GWP). In the future, they predict transformative reductions thanks to digitalisation.

Artificial intelligence (AI) can reduce GHG by 4% in 2030 — the combined emissions of Australia, Canada and Japan. Google already uses AI to reduce data centre energy by 15%, with a 6% reduction in cooling.

Digitalisation is transforming the value chain with increased efficiency, productivity, quality, and competitiveness. The digital infrastructure underpinning digitalisation, including the Internet’s ‘heart and lungs’ are, you guessed it, data centres and its ‘back bone’ of network infrastructure are closing a global social-economical gap in business and for those on the right side of the digital divide.

Given your advisory role to governments, how do you foresee government policies evolving in relation to data centre development and sustainability?

Some governments are championing and attracting data centre investments and have teams to handle the digital infrastructure sector. Other governments offer very little in the way of managing the potential.

Malaysia, for example, had a Bill of Guarantees, which are ten government policy incentives and a team to promote the nation and handle foreign direct investment.

More policies to come are almost inevitable. The European Commission (EC) over recent years has developed data centre initiatives towards a more innovative, sustainable, and secure facilities to address of their energy-intensive nature, environmental impact, sustainability, and energy supply security concerns.

  • EU Code of Conduct (CoC) for Data Centres: This voluntary initiative, developed by the EC Joint Research Centre (JRC), encourages data centre operators and owners to adopt best practices that reduce energy consumption and promote sustainability.
  • Green Cloud and Green Data Centres: The EC is exploring measures to improve energy efficiency and circular economy performance in cloud computing and data centres.
  • Carbon-Neutral Goal: data centres need to become more energy efficient, reuse waste energy such as heat, and use more renewable energy sources, with a view to becoming carbon-neutral by 2030.

If I look at data centre investors/investments in recent years, it is now unthinkable that it will not have deep sustainability considerations in the approval process. Private equity investors, in my experience, see the value-add in ESG and sustainable investments as a policy.

But it is not all one sided. It was only a few years ago when Bitcoin miners were demanding very large power and grid capacity where governments stepped in to qualify the need. There have been power restrictions notably in Amsterdam, London, Frankfurt, and Ireland. A few Moratoriums have slowed builds most notably in the Netherlands.

The EC have policies to meet Europe’s ‘climate-neutral’ targets by 2050; and the European Green Deal is to establish sustainability rules, which include digital infrastructure and data centres, effecting energy efficiency, clean energy, water, circular economy, circular energy, and governance. I would recommend keeping a close eye on energy regulation.

Organisations such as the European Data Centre Association (EUDCA) have courted the EC since 2015 to meet, greet, and enlighten, including to espouse the importance of the sector – not to lobby but to mutually exchange knowledge and insights. That led the EUDCA to present at the first data centre session during Sustainable Energy Week in Brussels in 2017, and I presented ‘Data Centres – Nearly Zero Energy Consumption’ as a board member of the EUDCA.

In terms of sustainability, what emerging technology or practice do you believe will be a game-changer for future data centres?

In terms of practise, in part, are some key regulatory changes or practices for data centres:

  • EU Taxonomy Regulations: These regulations focus on investment companies with the intention that they will only invest in sustainable projects.
  • Corporate Sustainability Reporting Directive (CSRD): Legislation that requires qualifying organisations to report sustainability indicators as well as energy and carbon emissions.
  • Energy Efficiency Directive (EED): Data centres in the EU, with installed IT power of more than 100 kilowatts, will need to publicly report energy performance.
  • Environmental, Health, and Safety (EHS) Regulations: Government regulations designed to mitigate data centre environmental impact and improve health and safety.
  • eNetworks and Information Systems (NIS2) Regulations 2018: These regulations cover cloud computing and higher levels of cybersecurity services.

These changes are aimed at making data centres more sustainable, secure, and efficient.

As for technology, I produced an article in 2018, which I believe is still relevant today. In that article, I mentioned:

  • AI, machine learning (ML), and automation in the data centre: These technologies will improve operational efficiency and sustainability. But I am not sure I saw such a sudden drive for change for the sector to handle Generative AI!
  • How Data Centre designs would move into three main proximity data edges: First, IoT distributed compute edge, moving and processing where high-speed data is created, used and erased. Second, hyper-connected data centres where edge meets edge, which means a changing colocation business and a modular edge, with the benefit from water cooling and reduce of energy. Third, the scale of the outer edge’; these hyperscaler data centres do not need to be at the fastest network speeds and can benefit from greener and more beneficial locations.
  • Photonics: Using light instead of a binary on/off voltage, which can lead to dramatic deductions in power by up to 100x, orders of magnitude potentials in processing per Watt (1Tbps on a chip) and vastly less waste heat generation.
  • DNA Storage: Storing data in the same way that nature’s DNA stores the building blocks for life. All the worlds’ data could fit into the size of a chocolate bar using this process. Microsoft announced they will store data in this way.

Thinking about the next 5 years, what is a bold prediction you have for the data centre industry?

Key are the regulatory changes as mentioned above. Also, a more distributed compute data centres and types, with more of them in more places computing more.

Designs will radically change to reflect new technology, materials, sustainability/ESG, regulatory needs, and business cases. HPC and AI, as well as re-use of energy opportunities, coupled with liquid cooling at the edge, could be a transformative model.

Investment opportunities still to be made in the value chain for lower carbon edge locations with assets vertically integrating (i.e. data centre construction) is predicted to grow from £25 billion ($32 billion) in 2022 to £38.4 billion ($49 billion) in 2030 (+5.4% CAGR).

Further to that, £214.7 billion ($274 billion) is predicted for hardware, software and services for edge in 2025 from £137.9 billion ($176 billion) in 2022.

Other opportunities could be in ‘real estate’ demand, including closer to the edge sites and the edge technology stacks.

Sustainability commitments and ESG have moved from ‘lip-service’ into board rooms, to ‘the cloud on the ground’. Enterprises will continue to grow/migrate into the cloud, with its greener infrastructure at scale and designs in the right locations.

I see enterprises also looking at on-premise. Are we seeing an 80/20 rule evolving where 20% of data centres being on-prem? More single digit MW on-prem or triple digit MW as global functions.

New data centre investors and market entrants are driving down risks for the hyperscaler’s sub-50MW, as these global giants have the benefits of scale for their own large sites being self-funders, self-builders, owners and operators.

That said, hyperscalers moving into new territories are showing some signs of using specialist colocation/fund-backed providers. The TikTok 90-130MW build with Green Mountain in Norway is case in point.

What advice would you give to someone starting in the data centre industry?

Prepare to never leave – it is a bit of a Hotel California sector!

Prepare for change. Prepare to challenge what are temporary ‘norms’. Prepare to think in ways that few sectors do. Prepare to be in a collegiate, friendly, inspiring sector that has a will to change the world. Prepare to explain what a data centre is.

Prepare to prepare!

Could you share a quote that inspires you as a leader or empowers you in your work?

“The only limit to our realisation of tomorrow will be our doubts of today.” – Franklin D. Roosevelt.

A quote I made on a panel discussion in Finland in answer to a question was: “If you are realistically optimistic you have just increased the change of a good outcome.”

About the Author

Derek Webster is a data centre consultant, advisory, client principle, advocate, and speaker. He has more than 30 years’ sector experience. He spans the gambit working from funding rounds, pre-budget business case, data centre strategy, market positioning, to country and site selection, design and build to delivery.

Derek has held positions at Yahoo! Inc and been a Board Member of Green Mountain. He has led teams delivering global digital infrastructure, strategy, and solutions. He has worked with hyperscalers, global brands, colocations, large enterprises, land owners, SPVs, and PE. Derek has helped governments and their development agencies to align with Foreign Direct Investors (FDI), attractiveness, value propositions to their national offers.

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