Covid-19 travel restrictions could impede data centre growth demands, warn construction experts

This week’s DCW webinar convened construction experts from CBRE, NTT & Duke McCaffrey to discuss the challenges presented by the pandemic

While data centre construction has largely managed to weather the Covid-19 storm, worldwide travel restrictions are preventing senior management from travelling to sites, potentially impacting the industry’s ability to meet increased demand, said panellists on this week’s data centre construction webinar hosted by Techerati and Data Centre World (recording available here).

When asked by moderator Joe McCaffrey of Duke McCaffrey Consulting how Covid-19 travel restrictions were affecting labour availability, Amy Daniell, director of Hyperscale for NTT, said while the bulk of the construction labour force could be fulfilled locally, getting the necessary senior management on-site was proving a challenge. 

“Flying that expertise might become a problem for us as we continue to grow, especially in Tier-2 Markets where the labour force doesn’t understand data centres and how to deliver them,” said Daniell.

McCaffrey, whose consultancy is based out of Dublin, noted that while previously Irish contractors tended to move around quite freely, the “flexibility to get on a plane from Dublin to Europe has been turned upside down right now.” 

Alongside Daniell on the webinar was Mike Buckingham, global director for Projects and Hyperscale at CBRE Data Centre Solutions. Both he and Daniell said Tier-2 markets like Warsaw and Zurich were currently the most sought after locations for cloud providers.

“Those markets continue to be a lot more prevalent,” said Daniell. “When you see one cloud provider move into that market you gear yourself up for the rest to move in too,” adding that NTT could have sold a previously dormant Zurich facility “six times over” in the previous quarter as demand was so high.

Buckingham said CBRE was facing difficulties getting the required post-construction specialists, such as high-voltage switchgear experts, to developments when needed. Although, he said the industry had been quick to adopt new technologies such as Augmented Reality and other remote management tools where possible to ease dependence on manpower.

In polls conducted during the webinar, 93 percent of attendees said Covid-19 had “somewhat or significantly” disrupted their data centre construction or expansion plans, with 53 percent citing travel restrictions as the most challenging factor, followed by social distancing requirements (23 percent) and supply chain friction (21 percent).

McCaffrey said his biggest concern was the “cost impact of having less manpower on-site” if projects suddenly took longer to deliver. 

However, Daniell and Buckingham said in addition to the adoption of cloud-based tools, the implementation of different shift patterns and new sanitary measures have enabled NTT and CBRE to maintain pre-pandemic productivity levels, which Daniell said was non-negotiable in the highly competitive hyperscale market:

“Program duration and cost per MW are paramount in any form of contract negotiation so we simply cannot go back to the client to ask for changes,” she explained.

On the issue of supply chain restrictions, Buckingham said a shift to modularisation had enabled hyperscale and greenfield developers to ensure the reliability of both Tier-1 and Tier-2 supply chains.

“Construction has changed from a more traditional form of construction to more of an assembly approach and that’s where I see the market going,” he said. Daniell noted the move towards prefabrication existed before the pandemic, but said the need to build “faster, more efficiently, with fewer man-hours and with more service integration” had accelerated the trend. 

Both Buckingham and Daniell were upbeat about the remainder of 2020, saying they were confident the construction industry would come out of the pandemic stronger than before, even if things didn’t wholly return to pre-pandemic normality: “The one thing the construction industry is great at is adapting to new challenges,” Daniell said.