Executive Insights: Harold Simmons

Harold Simmons,
United Metal Products

Harold Simmons is the Global Director of Strategy and Mission Critical Solutions for United Metal Products, a leading manufacturer of data center cooling equipment. One of Mr. Simmons roles is to work with Fortune 500 companies on their infrastructure strategy and work with his team to innovate/deploy cooling solutions that will help data center owners accomplish their energy efficiency goals.  Over the past decade Mr. Simmons has had the privilege of being involved in providing solutions for some of the largest data centers in the world.

Here’s the full text of Harold Simmons’ insights from our Executive Roundtable:

The Impact of Cloud Computing

Data Center Frontier:  How is the rise of cloud computing impacting the data center market? How do you see this trend playing out between major public clouds, service providers and in-house corporate data centers?

Harold Simmons: The rise of cloud computing is having a significant impact on the data center market, due in large part to the financial savings that come with operations that are built at scale. The largest cloud computing providers have huge economies of scale that have allowed the infrastructure build out cost to be reduced. Depending on the financial accounting strategy of the corporation this can benefit the enterprise client in two ways 1) The majority of capital expense required to build a data center can now be redeployed to the operational side of a business. 2) This freed up capital can then be used by enterprises to invest in their core competency and new innovation. As a result for many enterprise users it now makes strategic and business sense to host their data and software applications in the cloud.

That being said, there is still an interplay and tension that is taking place in the marketplace between cloud service providers and in-house corporate data centers. As complex as we may want to make the decision of what role cloud computing has with enterprise in-house corporate data centers, at a fundamental level the decision is most likely an economic and business strategy one. The CFO is looking at what the internal rate of return is on the capital and whether it makes most sense to lease or build. Is the company large enough that it has the cash available to invest in their own infrastructure assets and be able to depreciate these assets over time, or is the capital better used to enhance other aspects of the business.

The Evolution of Regional Markets

Data Center Frontier: In recent years the data center business has seen solid growth in geographic markets outside the tradition major data hubs. What are the most promising markets, and what trends will guide where we see growth in regional markets?

Harold Simmons:  This is a great question. Assessing the potential for future markets is best viewed on a continuum that is affected by a variety of variables. A few years ago Iceland was being heralded as the next great place for data centers. However, when Eyjafjallajökull erupted in 2010 people began to think differently about Iceland as a strong data center market. In the United States Wenatchee, Moses Lake, and Quincy all experienced tremendous growth and became major data hubs primarily as a result of very cheap power and an attractive business atmosphere from a tax perspective. Other municipalities have arisen who are also offering tax incentives and this has continued to change the market.

One of the most intriguing markets for future growth is the Greater Phoenix area. A couple years the Arizona Data Center Coalition helped create legislation that was passed that offered significant tax breaks for data centers. There are at least five factors that have positioned Phoenix as a key area for future growth:

• A friendly tax environment.
• The relatively cheap cost of power.
• A low propensity for natural disasters.
• Geographic location relative close to California; and
• An overall favorable climate for data center operations.

Evaporative data center cooling units from United Metal Products. (Image: UMP)

The Impact of Pre-Fabrication

Data Center Frontier: Factory-built components are playing a larger role in data center deployment. What’s your take on the impact of pre-fabrication in data center construction, and its role in the future of the industry?

Harold Simmons:  Pre-fabricated components will continue to play a key part in data center deployment. Pre-fabrication has allowed the lead time required for new data centers to be built to be significantly reduced. Overall, factory built components also offer the opportunity for greater quality control, tax depreciation advantages, and improved construction schedules. While it does not look like pre-fabricated solutions will completely eliminate traditional brick and mortar facilities, it has become apparent that a hybrid approach to infrastructure build offers key advantages over simply locking in on one methodology.[clickToTweet tweet=”Harold Simmons: Pre-fabricated components will continue to play a key part in data center deployment.” quote=”Harold Simmons: Pre-fabricated components will continue to play a key part in data center deployment.”]

The Innovation Landscape in Cooling

Data Center Frontier: Cooling has been a key focus of energy efficiency efforts in the data center. Is there still opportunity for innovation in cooling? If so, what might that mean for how data centers are designed and where they are located?

Harold Simmons: There are definitely still opportunities for innovation in cooling. Even though ASHRAE has raised the recommended temperature level to the server inlets, many organizations have been slow to adopt the newly recommended design criteria. There is still very much a legacy mindset at a psychological level for many when it comes to data centers.

That being said, each data center owner has unique design criteria, functional requirements, and SLA’s (whether they are internal or external) that they are required to meet. As a result of this it is imperative that manufacturers continue to innovate cooling solutions that meet specific design requirements.

In addition to this, one of the most important areas when it comes to cooling is water usage. Often times when data center owners and operators mention water usage they are focused at a localized level. This is because in most parts of the country water usage is considered at a municipal level. That being said, when water usage is being examined it is imperative that the total hydro footprint of an operation is taken into account. The hydro footprint is not just the water used on site in order to provide cooling, but also the water that is used at the power plant to produce electricity. This means that cooling systems that use no localized water, but high amounts of electricity can actually have a higher hydro footprint.