Interview: Talking sustainable data centre construction with Colt DCS
Data centres are enormous consumers of energy and resources.
Driven by the explosion of connected devices now in existence (50bn are forecast to be in play by 2020), data centres are becoming more and more common all over the world.
This brings with it a massive energy bill, not least when it comes to keep servers cool. According to US researchers, the ICT industry is posed to be responsible for up to 3.5% of global emissions by 2020.
Further still, data centres are expected to consume as much as one fifth of the world’s power by 2025.
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So, what can data centre providers do to offset or curb some of this consumption and become more sustainable?
Bruce Stephenson is Director of Real Estate Development at Colt Data Centre Services, with 17 years’ experience in the construction industry. He sat down with Construction Global to discuss some of the nuances when it comes to building data centres, and how operations can be made more sustainable.
One element Stephenson mentions is size – the more a single data centre can store, the lesser the environmental impact in terms of energy usage per amount of data.
“We all know the examples of 10 years ago, 15 years ago, the one, two, three, four, five-megawatt data centre was a pretty big deal,” he recalls. “Or certainly it was big enough for you to be interested. However, the world we now live in is very much different.
“One of our biggest differentiators actually… is the size and scale that we're aspiring to in terms of the sites that we're looking at. I think the smallest that we're looking at currently is Frankfurt, and that's 25 MW of IT. So, that is, by no stretch of the imagination, a big data centre. In some instances, we're looking at up to 100 MW of IT.”
Stephenson also points to Colt’s tightknit design team of 15 experts, for whom R&D is critical when it comes to ensuring data centre designs are as energy efficient as possible.
“R&D and improvement is key,” he adds, “and energy efficiency is the focus. Carbon initiatives are not going anywhere. It's not going away. If anything, it's intensifying. It's constant growth.
“Sustainability is not just a cheesy sales line – the reality is it runs through the core of the business.”
Renewable energy is one obvious example of how data centres can cut carbon emissions, and Stephenson says that Colt is looking at investing in its own land with a view to leveraging solar power, moving beyond other carbon reduction methods such as buying credits.
To read more insight on data centres and sustainability, look out for the August edition of Gigabit magazine.
'Doing digitalisation wrong and risk being left behind'
Research has shown that 55% of bank executives view non-traditional players as a threat to traditional banks. The fear is justified, as digital banks could have a cost base approximately 60-70% lower than theirs. If this looming threat from innovative and digital-minded industry disruptors has not been enough to trigger a digital rebirth of legacy financial institutions, surely the biggest disruptor of them all – the pandemic – would force change?
It seems that despite studies showing COVID-19's long-lasting effects on the global economy to be of the likes of a substantial one-year reduction in worldwide GDP of more than 6%, the necessity of cost-cutting in 2021 is still not a stake high enough to steer legacy financial service CFOs in the same digital direction that the world is heading to.
Modern living now operates online, both professionally and personally. Distributed working, retail, and socialising are all the ‘new normal’, and the financial services sector is no different; the pandemic has resulted in 71% of global consumers now using digital-banking channels weekly – with contactless and digital payments at the forefront of this shift.
Due to this demand, many banks are experiencing a 50% increase in the use of their digital services. Research has shown that accelerated consumer adoption of digital banking tools has led to the growth of new digital banking users by approximately 20% over the last year alone. The decision-makers at legacy banks now have a choice to make: understand and adapt to the modern consumer’s needs and lifestyle or watch them leave.
This is different from the threat legacy banks saw in the 1990s with the rise in internet banking or even the financial crisis of 2008. Consumers now have a plethora of options available to them with a click of a touchscreen button in the palm of their hands. In order to remain a noticeable competitor in the industry, legacy financial institutions will have to cut costs by 25-50% in the next 3-5 years, which simply won’t happen. A lot needs to change.
Transformation in various forms
This transformation can materialise in various forms, from introducing operational efficiencies and superior customer experience by leveraging AI, modernising legacy systems and processes to allow for cloud-native end-to-end experiences, to building digital onboarding, quick loan disbursements, and real-time payments. With studies finding that firms could digitise many activities 20-25 times faster than previously thought possible, it’s a convenience simply waiting to happen.
It would be wrong to imply that all legacy financial institutions have not thought about accelerating their digitisation. Research has shown that 45% of banking executives are keen on transforming their existing business models into digital ecosystems right now. So, if sentiment and plans to pivot are beginning to take shape, where are legacy banks going wrong and why are changes not being made?
It’s simple. They have their priorities all wrong. Data looking at the top banking priorities for post-pandemic FS shows the three lowest priorities mentioned are instrumental to achieving digital transformation success: innovation, operational excellence, and culture development. This lack of focus on technology, operations and culture will ultimately derail most digital banking transformation efforts, rendering these legacy banks obsolete.
Changes need to be made for these institutions to stand a chance of surviving against their disruptor counterparts. As Jack McCullogh, founder of the CFO Leadership Council, astutely said: “Few, if any, investments can give an organization a sustainable competitive advantage like an investment in technology”.
In every crisis there is an opportunity, and the pandemic is a perfect time for legacy banking to reassert themselves as a viable option for consumers and as noticeable competition in the industry. The world has been forced into digital, and these legacy firms are no exception. It is now or never.