With a surge in digital transactions, unseen in the past, Asia has emerged as one of the hottest data centre locations. Take a look at the numbers- for the entire Asia Pacific, the market size for data centre investments were estimated to hit $94 billion by 2027, according to research firm Arizton. For Southeast Asia, the data centre market was expected to reach $12.34 billion by 2027, from $8.71 billion in 2021.
There are many reasons for this surge. Increased cloud adoption, advent of 5G in many parts of Asia and the adoption of technology such as AI, big data, and IoT have all resulted in the region witnessing increased investments from colocation and hyperscale operators.
Growth Brings Complexity
While growth brings along excitement, it adds a lot of complexity and pressure to the construction of data centres. “The desired just-in-time delivery at which data centres are demanded to be constructed naturally increases the risk and opportunity for mistakes to be made,” states Director of Solutions Consulting for APAC at Procore Technologies, Will Twomey. “With the advanced MEP (mechanical, electrical, and plumbing) fit outs, a high degree of integration and planning is necessary between contractors, subcontractors, system integrators and engineers.”
“This is particularly so, given the equipment being constructed is highly sensitive and costly. It has to be installed at the precise location in such a way to operate optimally. Again, at the desired speed of construction, this heightens operational and delivery risk,” added Twomey.
To achieve the desired outcomes, some in the construction industry have taken a prefabricated modular approach to ensure the construction can be delivered with a fast turnaround, without jeopardising the quality and its coordination. “This game-changing approach changes the entire construction, where pre-construction is being built entirely in a controlled environment before ship and installation at site,” points out Twomey.
This method not only optimises the construction process but also allows the operators to easily scale, and the mobility of the componentry allows businesses to relocate instead of destroying and rebuilding.
Importance of Construction Management Platform in Data Centres
It is critical for data centre developers to deploy a construction management platform for several reasons. However, the most important of these is to drive efficiency, as well as capture data to deliver insights to inform future operational decisions.
Data centres typically run quite a lean construction team. Construction management platforms can make project management and project delivery teams significantly more efficient, which in turn is an enormous advantage for that team, especially when under tight delivery deadlines. The efficiency gains are driven by access to information, mobility of the application as well as systematic automation to drive outcomes from interdependent parties when communicating or making decisions.
Economics of DC Construction
Given the speed at which data centres are demanded to be completed, there is often little time to review lessons learned or understand patterns before moving on to the next project. By consolidating all of the construction delivery processes into a single, integrated construction management platform, data centres companies can strategically plan based on actuals rather than assumptions.
“On average, data centres might take five years to pay themselves off, compared to normal development which might take 30-40 years. Data centre investors are often tied to completion deadlines, which means developers will need to compensate investors if the asset isn’t operational and providing returns by a certain date,” explains Twomey.
By leveraging a construction management platform to understand the areas in which companies can drive efficiencies, there is a much higher likelihood that the construction of the data centre will be completed on time, thus, providing returns for the developer and the investors sooner. Data centre developers typically allow a high contingency on projects, sometimes as high as 8 per cent for any errors during construction, as their main objective is to get the data centre operational as soon as possible. If a construction management platform can add rigour to the quality assurance processes, use analytics to identify patterns to reduce rework on future projects, then not only do the data centre companies save on contingency costs, they also reduce maintenance and operating costs for the future.
Usage in AI in construction
By running analytics across the construction project data, companies can start to identify areas of improvement across many facets of the operation. This can include worker safety data, which may require further training or certifications in a particular area. Importantly, the analytics can identify key focuses to drive efficiency gains, such as identifying particular consultants or trades who are constantly lagging in providing responses or decisions.
“One of the most valuable areas where analytics can deliver insights and returns for data centre developers is through diving into the quality of construction,” says Twomey. As the developers will own and maintain the asset ongoing, identifying patterns to drive construction quality to the highest standard will reduce maintenance costs long term. This then drives higher profitability for the years to come.
Lastly, construction analytics data drives more benefits for data centre developers when the analysed data from the construction operating platform is integrated into ERP systems. These insights combining accounting, cost controls and operations will give companies more insight, help future project profitability, and assist organisations to scale.
With increased demand for smarter construction, Procore is continuing its expansion into the Asia Pacific market, following the rapid growth across Australia and New Zealand, as business nearly doubled across the region in 2021. The expansion of Procore’s presence will uplift the business’s digital capabilities, providing value to all stakeholders in construction.
“To support Procore’s growth strategy, we opened a new Asia Pacific headquarters in Sydney; a 15,000 sqft office and plans to create over 100 new jobs across Australia and New Zealand. The investment in a new larger office and rapid hiring shows our ongoing commitment to the business in response to sustained customer growth across APAC,” Twomey explains. “At the same time, we have seen a significant pull effect into Asia, with greater demand for a construction management platform for better management of the construction lifecycle. The opening of our Singapore office, which serves as our Asia hub, marks our foray and expansion into the region.”
Learn more: Smarter Construction for Data Centres