Recent data from Synergy Research Group shows that the number of large data centres operated by hyperscale providers rose by 11% in 2018 to reach 430 by year end.
Hyperscale growth continues unabated, with company revenues growing by an average 24% per year and their capex growing by over 40% – much of which is going into building and equipping data centres, the group said.
As well as the 430 current hyperscale data centres, Synergy estimates a further 132 that are at various stages of planning or building, with many serving the needs of Amazon, Google, Microsoft and Facebook.
“There is no end in sight to the data centre building boom,” said John Dinsdale, chief analyst and research director at Synergy Research Group.
Such market consolidation is exposing a supply chain immaturity not able to cope with such demand, according to Mark Collins, the sales director at UK engineering company Excool.
“What we’ve seen in that short space of time is a massive consolidation of the market, which has eradicated a lot of smaller operators. Because of the massive demand that’s there, the supply chain just isn’t mature enough to cope with it – it’s happened so quickly.”
Collins’ UK company Excool has installations in several European countries and even locations as far flung as Chile.
He adds: “We also have this mentality where every phase of every project has to be tendered, everything’s got to be fought over. It doesn’t give the supply chain forward visibility, an understanding of where the next job is coming from, and to be able to invest with any certainty in increasing production capability.
“What we tend to find is that a project gets tendered six months ahead of time but is only awarded 16 weeks before the kit is due on site and everybody is then in a fight to try to do it. We and our supply chain are then under pressure to meet the delivery dates.”
Clearly, a booming market is a good problem to have. It certainly beats a depressed one. Yet scaling up the supply to meet a booming demand is not a straightforward task, with multiple components playing into this.
‘New Year resolutioners’ – those that take up memberships in January but cancel by February are a common sight in gyms and health clubs across the country. While the supply chain won’t collapse in two months, it’s clear long-term efforts are needed by multiple stakeholders to ensure the industry can scale up to meet demand.
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