The Data Center Frontier Executive Roundtable features insights from industry executives with lengthy experience in the data center industry. Here’s a look at the insights from Nancy Novak, Chief Innovation Officer at Compass Datacenters and Advisory Board member for Infrastructure Masons.
Novak is heavily involved in organizations that lead the way for technology advancement in the construction industry, and she is an advocate for women’s leadership. Her passion for advancing women in business occurs through organizations like iMasons, Women for Women International, The National Woman’s Party in Washington DC, Women in Government Relations (WGR), Women Construction Owners and Executives (WCOE), the World Trade Center (WTCI), Fortune Media Most Powerful Women, and Above Glass Ceilings LLC.
Here’s the full text of Nancy Novak’s insights from our Executive Roundtable:
Data Center Frontier: The arrival of generative AI technologies, popularized by ChatGPT, has the potential to disrupt search and other leading Internet businesses. How might the huge interest in generative AI bring changes in data center hardware and design?
Nancy Novak, Infrastructure Masons: While the technology may be disruptive, from a data center perspective it will still come down to power and cooling. For example, AI requires faster processors than current data center resident servers. For the data centers that support AI applications this means two things: we are going to need a lot of power and the heat generated will make cooling even more important than it already is.
AI’s ravenous power and cooling requirements will impact facility design but perhaps not in the way we might expect. Certainly, we can expect them to pull technologies that, up to now, have gained only moderate traction in the industry like liquid cooling at the rack level. But from a design perspective we may see a proliferation of smaller facilities as the technical, and consumer needs for AI-driven functionality would seem to lend themselves to a higher degree of decentralization than we’ve seen to date.
If this trend does become reality, we’ll see end users reorienting many of their priorities. For example, If I have a dispersed quantity of facilities, the failure of one doesn’t have the same impact as an outage does today, so the decision to use primarily N-based designs becomes more economically justifiable.
I think the AI-driven changes to data center design and hardware will certainly evolve over time, but in significantly compressed increments which will place a great deal of pressure on providers to achieve a level of adaption which will provide them with the nimbleness required to respond to a quick changing landscape.
Data Center Frontier: After years of trending lower, pricing for data center capacity increased in 2022. What lies ahead for data center pricing, and what are the primary factors that will influence where prices go in the future?
Nancy Novak, Infrastructure Masons: At this point in time, power pricing can best be described as mercurial. At a fundamental level, power pricing simply reflects the primary principle of Economics 101 - prices rise when demand exceeds supply. There are a number of factors contributing to the escalation of power prices, lack of infrastructure, supply imbalances generated by efforts to replace fossil fuels with green alternatives and the size requirements of the facilities themselves.
The shortage of power availability in some of the industry’s major markets (and the associated costs) could be the boon that second and third tier markets have been waiting for. If I’m faced with an overserved location with high power costs, a non-traditional market with the available infrastructure and affordable power becomes much more attractive to me.
If there is a near term “wild card” in power availability and pricing it’s how fast and effective the efforts of companies such as Bloom Energy’s fuel cells and other emerging technologies like Electromagnetic Compressed Air are in developing into large scale alternatives.
Data Center Frontier: In early 2023 we’ve seen several announcements of plans for hydrogen-powered data centers. What are the potential benefits and barriers to the use of hydrogen in data center power?
Nancy Novak, Infrastructure Masons: The interest in using hydrogen as a replacement for back-up generators, and ultimately become the primary power source for a data center has risen dramatically in the past few years. The on-going efforts of companies like IBM, AWS and Equinix is beginning to bear some fruit as evidenced by Microsoft’s recent successful test of a 3MW fuel cell. Like so many innovations within the data center industry multiple development initiatives are being conducted by the large hyperscalers. This makes sense in light of their energy commitments in future years. 2030 isn’t that far away. For them I don’t think they look at hydrogen as an "if" as much as a "when."
Like many alternative fuel sources, there are a number of obstacles to be overcome to make it a viable power alternative. For example, currently the production process is primarily reliant of fossil fuels which offset some of its benefits, but the continued migration to renewables will help alter this situation over time.
Another bump in the road is the relative lack of hydrogen due difficulties in compression, storage and transportation which also translates in price points well in excess of alternative solutions. However, I think it’s reasonable that the issues prove transient due to the commitment of hyperscalers to add hydrogen to the arsenal of renewable power options in the future.
Data Center Frontier: As campuses get larger and some primary markets experience constraints on land or power, what are the characteristics that will define growth markets in the next several years?
Nancy Novak, Infrastructure Masons: I think the answer to this question is straightforward. Future growth markets will be those with the available land, power and associated infrastructure capable of supporting tens of MW at the very least. As mentioned above, the current alignment of these requirements with available capabilities of some of our larger markets may result in multiple smaller markets that previously wouldn’t have been considered as desirable sites to become more attractive to a host of suitors.
As a result of this potential rise to prominence it would not be unexpected to see larger investments in infrastructure in these smaller communities to make them even more attractive for providers who can’t afford to wait (and these days who can?) on these same elements in larger locations.