Mission Critical magazine conducted a series of conversations with leaders in the mission critical industry to provide readers with insights into the trends that will shape the way the data center and IT infrastructure industry evolves in the coming years. For the latest installment of the State of the Mission Critical Industry series, we sat down with Chris Crosby, CEO of Compass Datacenters.
The mission critical industry has been growing rapidly the last few years and is expected to continue strong for the foreseeable future. To what do you attribute that growth and how long might it continue?
Crosby: I see two main drivers for the growth of the industry: technological innovation and user expectation. The combination of these elements is historic and symbiotic, with both driving demand for computing infrastructure to levels that are unprecedented.
That dynamic hasn’t changed since the development of Morse’s telegraph. It has simply accelerated, with innovation creating capabilities that lead to end-user demand, which leads to higher end-user expectations, which drive innovation. It’s a cycle that continues to shape our industry. A perfect example is the proliferation of connected devices across the globe. That has led to exponentially increasing volumes of data produced every year. The need for compute and storage capacity shows no signs of abating any time in the next five years or more.
How do you feel the tariffs imposed by President Donald Trump will affect the industry? Or, will they have no effect at all?
Crosby: Certainly some elements of the industry will feel the effect of the tariffs, but the sophistication of supply chains and double-digit annual demand growth should more than offset the relatively limited impact of any specific tariffed components.
If you were talking to a data center owner who wanted/needed to grow, what one piece of advice would you offer?
Crosby: Find a financial partner. As evidenced by new financial arrangements like Azrieli’s recent acquisition of 20% of Compass, there are a number of investment firms interested in entering the data center marketplace, and having a strong financial partner provides a foundation for both scale and speed.
How does this industry solve the workforce development problem?
Crosby: There isn’t a readily apparent quick fix to the problem regardless of what industry you look at. The real solution will be a longer-term one involving consortiums and other entities working STEM-related departments on the college level to increase the level of exposure and opportunity the industry offers to new graduates. I also think companies will take the initiative on this with grassroots efforts involving scholarship, apprenticeship, and internship programs that will provide students and other interested individuals the ability to learn required skills in return for some reciprocal work commitment.
Besides workforce development, what is the biggest issue affecting the mission critical industry?
Crosby: The primary issue that is beginning to emerge for competitors within the industry is, “How do I continue to profitably grow in an industry that is effectively commoditized?” In order to keep pace with demand, providers have had to develop facility designs and supply chains that can deliver new facilities in less than a year. In fact, six months seems to be the new benchmark. This enhanced emphasis on speed of delivery is good from a demand perspective, but it also means there is little differentiation between product A and B. As a result, providers will need to place an exacting focus on driving cost out of their design and construction efforts to maintain effective margins and competitive pricing flexibility.
What is the most important trend (two- to five-year view) you see coming toward facilities managers/owners/IT executives?
Crosby: The sheer volumes of data, combined with the need to process it in increasingly smaller timeframes, is a trend that is going to place a greater premium on the need to automate processes and functionality with facilities.
In many cases, human intervention cannot keep up with instances like unauthorized intrusions, dynamic networking, or even doing things like optimizing energy usage. AI-enabled technology will help and become more effective over time, but, like any capability, it will only be as effective as its implementation.
Will the edge find a final destination?
Crosby: The edge will be wherever it needs to be. Rather than a single definition, the edge will be defined by the varied needs of end users and applications. Ultimately, edge “boundaries” will be defined by the applications and the technology (5G, etc.) required to support them.
How fast is change happening today?
Crosby: I don’t think there is any governor on the rapidity of change. The key issue will always be how fast organizations can adapt to it. We started Compass in 2011, building dedicated data centers in Tier II markets. But we now have major campuses in locations like Phoenix, northern Virginia, and Montreal, and we compete in both the hyperscale and edge marketplaces — changing our standard components multiple times based on new innovations. That evolution of our company is a reflection of how fast the industry has evolved, and the speed of change is only going to continue to accelerate.
The same is true for both providers like Compass and for end users: The speed of change makes it critical to retain your organization’s nimbleness and adapt accordingly.
How do you see your own company as an important cog in this growing industry?
Crosby: I think Compass has had an impact on the industry by disrupting the tradition paradox that existed in the past, where there was a tension between speed of delivery, quality of the solution, and price. Typically, companies had to choose either one or two of those three — but couldn’t have all three. For example, you could have a high-quality facility on a rapid timeframe, but it was going to cost you a heck of a lot. Or you could have a facility built at a breakneck pace, but quality and performance would suffer. Compass was the first company that made all three possible at once.
We accomplished that with a standard design that is easily customizable, combined with a supply chain that relied heavily on the use of prefabricated components that could be implemented using repeatable processes and procedures. We’ve expanded these principles to provide solutions for everyone from hyperscalers to edge applications. Our goal is to continue to lead the industry in incorporating the latest technological capabilities into our design and construction activities.
Any concerns about regulations for this industry?
Crosby: The industry has done a good job of preempting government intrusion through self-regulation. The continued emphasis on energy efficiency and renewable power is a good example of that. We’re capable of continuing to avoid the need for regulation based on the fact that we’re all in the business of maintaining profitability through increasing our efficiencies. Green strategies, for example, are good for the environment, but they also require us to continually enhance everything from our components to our processes and procedures.