Executive Insights: Andrew Schaap of Aligned Energy 4Q 2017

ANDREW SCHAAP, CEO of Aligned Energy

As CEO of Aligned Energy, Andrew Schaap is responsible for business growth and promoting the availability of Aligned Energy’s data center and build-to-scale solutions to cloud, telecom, enterprise and managed service providers. Prior to joining Aligned Energy, Andrew held numerous leadership positions over an 11-year period with Digital Realty (NYSE: DLR). Most recently serving as Senior Vice President, he was responsible for global large-scale, client-driven data center builds and was part of the executive leadership team that grew revenue to $2 billion. He also oversaw all major international transactions, including the successful negotiation and execution of projects in Osaka, Singapore, Hong Kong and Sydney. Prior to Digital Realty, Schaap held leadership roles at Sterling Network Services and Sysix Technologies. Andrew holds a B.A. in Business Administration and Marketing from Cornerstone University, as well as a graduate programs in Executive Negotiations and Management Training from Harvard University.

Here’s the full text of Andrew Schaap’s insights from our Executive Roundtable:

Data Center Frontier: What is the one trend you believe will be most significant in shaping the data center industry in 2018, and why?

Andrew Schaap: As our global economy continues to accelerate, its sustained success depends on the ability for all businesses to be able to deploy mission critical applications in a highly secure environment while having the flexibility to expand data center capacity seamlessly and without disruption.

This year, we believe the most significant trend shaping our industry will be how enterprise companies and large web scalers identify ways to future-proof their entire IT stack. They are going to demand data center ecosystems that balance top-tier security with business and technical flexibility as well as the latitude to execute their business plan, even if they don’t have a clear crystal ball of what it will look like three, five, or 10 years out.

Additionally, there is an uncertainty around densities and applications. We’re seeing clients that want flexibility not only in their contractual environments but also in densities, so that when they hit their 2-3 year IT refresh cycle, they have a partner that can work with them on providing a dynamic floor versus a static floor.

At Aligned Energy, we don’t expect our customers to predict their business needs, capacity requirements or rack densities years in advance. So whether you are are a large-scale cloud provider or an enterprise of any size, our unique model and technology allows us to scale with our customers’ current and future business needs on demand, which reduces stranded capacity and unnecessary expenditures for clients. This environmental agility is further integrated within our infrastructure, which accommodates variable power densities of up to 50kW per rack.

2018 will be all about establishing a data center environment that is adaptable to client needs, reliable, flexible, secure and efficient.

Data Center Frontier: 2017 has been an interesting year for wholesale data center providers. Some have focused on winning huge hyperscale deals, others on expanding into colocation and interconnection, or targeting key industry verticals. How do you see the landscape for wholesale providers evolving in 2018, and what do you see as the keys to success?

Andrew Schaap: There was a tremendous amount of M&A activity in 2017, and this will continue to rise in 2018. As a result of the M&A landscape, multiple providers are becoming the norm. The data center providers who can be flexible in keys areas like ramp speed and floor space design will be better situated to accommodate growing business needs, or the consolidation needs of these newly-created companies. This type of environment works to the benefit of solution providers like Aligned Energy.

A data hall at the Aligned Data Centers facility in Plano, Texas near Dallas. (Photo: Aligned Data Centers)

Data Center Frontier: Data center geography is a hot topic. What geographic markets will be strongest in 2018, and why? What are the up-and-coming markets that may make headlines in 2018?

Andrew Schaap: As they have in prior years, the top-tier data center markets in the U.S. – such as Dallas-Fort Worth, Phoenix and Northern Virginia – will continue to strengthen and expand in 2018. These markets have developed ecosystems that consistently benefit end-users through access to top technical talent, efficient networking and electricity costs, and attractive tax incentives. As more data center providers participate and contribute to the system, the momentum behind these markets will build on itself and create a virtuous cycle.

However, companies are beginning to consider markets in second-tier locations in order to diversify their risk and avoid oversaturation, whether from a geographic, vendor, utility or networking standpoint. In 2018, we’ll likely observe activity that launches new markets where access to professional talent, tax breaks, electricity and a friendly business environment is widely available and cost-efficient.

Aligned Energy is well positioned to help clients as they are thinking of net new markets where they need diversification in their supply chain.

Data Center Frontier: The data center industry has seen growing interest from new investors and a wave of mergers and acquisitions. How might these trends shape the competitive landscape in 2018?  

Andrew Schaap: The strategic publicly-traded operators in our space as well as the investment firms interested in our industry continue to supply great capital at attractive rates, which has resulted in continued growth and support for our end customers.

This creates a nice dynamic environment where not only is outsourcing for data centers growing, but it’s also expanding into what was previously thought of as a “build-it-yourself” mentality in the industry. The outsourcers are capturing a larger percentage of that pie because of trust in today’s economy and the great capital sources feeding the industry overall.