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Study Reveals Hyperscale Inflection Point in Data Center Value Chain – Schneider Electric

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Study Reveals Hyperscale Inflection Point in Data Center Value Chain – Schneider Electric

November 12
09:55 2019

Pressure to complete work in tighter timelines, lack of skilled labor, and security cited as key challenges

Schneider Electric, a global specialist in the digital transformation of energy management and automation, recently announced findings from a new study that sheds light on how hyperscale and colocation trends are impacting the current dynamics and future model of the data center value chain.

As the demand for data center capacity continues to grow — CapEx spending from the top hyperscale operators totaled a record $120 billion in 2018 — the role of the value chain, including consulting engineers, construction managers, electrical contractors, and distributors/integrators, has never been more important, but the challenges they face continue to intensify. Schneider Electric’s report, The Impact of Hyperscale Data Centers: How the Wave is Changing the Value Chain, reveals how the individual value chain members’ roles have evolved, what their leading pain points are, and what they believe is needed to succeed in this new industry reality.

Overall, the report found that while new technology constructs such as open architectures, edge deployments, the software-defined data center (SDDC), prefab, and AI/digitization are having profound impacts on all members of the value chain, most value chain respondents agree hyperscale presents the biggest positive impact to their businesses.

The increase on profit margins and opportunity to gain new skills and expertise were some of the most significant opportunities presented. However, hyperscale has also amplified the impact of the industry’s ongoing skilled labor shortage, which ranked as a top challenge and day-to-day pain point across the value chain.

Members of the value chain agreed that increased collaboration — across roles as well as with end-users and manufacturers — and transparency are key to overcoming these challenges and supporting longer-term hyperscale success.

The insights revealed in the report may help serve as guidance to value chain members as they consider their roles over the next decade, as well as manufacturers and vendors when it comes to better understanding the people they work with. Key takeaways from the survey’s respondents of electrical contractors include:

  • 42% of electrical contractors dedicate more than half their time to hyperscale and colocation projects in the last 12 months
  • In terms of the impact to their business, 51% placed hyperscale at number one while 75% placed it in the top 3 as compared to other data center trends, such as open architectures, edge deployments, SDDC, prefab, and AI/Digitization.
  • Electrical contractors say their top three day-to-day pain points are pressures to complete work in tighter deadlines (49%); greater client involvement (42%); and emerging construction technology (42%).
  • Seven in 10 (70%) of electrical contractors consider the ability to gain new skills and expertise to be the biggest opportunity when it comes to hyperscale and colocation projects.

About Schneider Electric

Schneider Electric is leading the Digital Transformation of Energy Management and Automation in Homes, Buildings, Data Centers, Infrastructure and Industries. With global presence in over 100 countries, Schneider is the undisputable leader in Power Management – Medium Voltage, Low Voltage and Secure Power, and in Automation Systems. We provide integrated efficiency solutions, combining energy, automation and software. In our global Ecosystem, we collaborate with the largest Partner, Integrator and Developer Community on our Open Platform to deliver real-time control and operational efficiency. We believe that great people and partners make Schneider a great company and that our commitment to Innovation, Diversity and Sustainability ensures that Life Is On everywhere, for everyone and at every moment.

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