Partnership aims to accelerate datacenter construction

Data Center Server Room
Sheila Zabeu -

August 01, 2023

A partnership between Schneider Electric  and Compass Datacenters has been formed to accelerate the construction of datacenters using prefabricated modules. A facility near Compass’ campus in Texas (US) will allow the two companies to integrate their supply chains in response to growing demand for datacenters.

The facility is designed to integrate modular datacenter solutions and build a prefabricated IT infrastructure that will be delivered to Schneider’s customers in the United States. Relying on an optimized supply network, Schneider will be able to streamline processes, eliminate upfront engineering and design work, and deliver high-quality finished solutions. According to the companies, this model extends their competitive advantages in terms of agility and cost savings and will serve customers in all areas of activity, from cloud and service providers to the healthcare, education, telecommunications, and mining sectors.

“This is an industry first collaboration and reflects the new dynamics of datacenter supply chains and the need for closer supplier relationships. The new facility will power centers for Compass installations and will increase the reliability of our supply chain, accelerate our time-to-market and improve the integrity of our delivery schedule,” says Chris Crosby, CEO of Compass Datacenters.

For Aamir Paul, president of Schneider Electric in North America, the company is an industry leader because its manufacturing facilities provide the space, technology and agility to accelerate production and support new business models, such as this partnership with Compass. “This approach we are pursuing supports the goals of both companies and serves as a guide for suppliers and relationships that others in the industry can follow,” Paul adds.

Tsunami of AI demand

Although we have covered almost half the year, 2023 already ranks as the second busiest in terms of datacenter take-up, i.e. capacity rented by customers for a specific period.In recent months, the huge interest in Artificial Intelligence (AI) technologies has heated up the datacenter real estate sector. surpassing even the peak demand during the Covid-19 pandemic.

According to a study by research firm DatacenterHawk, the demand seen over the past 12 months is leading to power supply issues in many of the world’s major markets. For example, North America experienced in the second quarter the longest period of absorption ever, reaching almost 850 MW in major markets. Five of them (Phoenix, Northern Virginia, Dallas, Atlanta and Portland) had more than 50 MW of absorption, which had occurred only once before, in the first quarter of 2022.

Latin America, meanwhile, currently has an asset stock of 675 MW spread across several datacenters in the region. The top five markets – São Paulo, Querétaro, Santiago, Bogotá, and Mexico City – account for 74% of the available capacity (505 MW). São Paulo continues to lead with 256 MW, but a planned 5X growth in Querétaro based on current and announced construction projects could equalize these two markets in the next five years. An emerging market is Bogota, where 130 MW in projects have already been announced, 4X the current stock. However, there has been very little construction activity so far, the study highlights.

Over the past two years in Europe, the markets known as FLAPD (Frankfurt, London, Amsterdam, Paris, and Dublin) have averaged around 150 MW of combined utilization per quarter. According to DatacenterHawk’s report, the consistency is generally the result of power supply and regulations in the main markets, which limit utilization to those markets that can accommodate the needs at that time.

In the Asia-Pacific region, Hong Kong, Singapore and Sydney reported a combined take-up of over 50 MW in Q2 2023, the highest since Q1 2022. Hong Kong and Singapore are markets with little available supply or room for future growth. Interest in the region as a whole remains high, with consistent development and more capital invested frequently.

This growing demand for datacenters is already being called the AI tsunami. Investment bank TD Cowen expects the year 2023 to set a record in terms of leasing for datacenter facilities. The financial institution claims that it has increased not only the number of hyperscale agreements signed or in progress, but also the volume of the deals. These large deals include Google (600 MW contract in Texas) and Microsoft (420 MW contract in Virginia, 360 MW contract in Dallas, 300 MW contract in Chicago).