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M I S S I O N C R I T I C A L
I N D U S T R Y A N D C O N S T R U C T I O N T R E N D S
Professionals at the 7x24 Exchange Conference share their views on the
state of the U.S. Mission Critical Industry and the outlook for the future.
F E B R U A R Y 2 0 1 2
Photo by Joe Kay, Joe Kay Studios
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Foreword
The importance of mission critical facilities to corporate and
public infrastructure continues to grow, and Mortenson will
continue to bring ingenuity, industry knowledge, and technical
expertise to bear on advancements shaping the industry.
To that end, we are pleased to share with you the following
insights and perspective.
The current dynamics in the U.S. mission critical industry rival that o
industries like tablet computers and smart phones. Excitement or the
industry could be seen at the Fall 2011 7x24 Exchange Conerence where
a record-breaking number o data center and acilities proessionals
gathered at the Arizona Biltmore Hotel.
We gathered eedback rom 90 proessionals at the conerence to
conduct this study. Respondents described a market that is strong
despite the struggling economy, where transormational changes are
taking place across a broad array o operational areas.
Optimism or the uture is high, with no obvious end in sight to either
the strong expansion o mission critical capacity or the underlying orces
necessitating this growth. Indeed, perhaps the greatest challenge acing
industry participants is which o the many promising technologies and
design trends will defne the uture o the industry.
ContentsStrong, Shiting Market _______________________________________1
Staying Power _______________________________________________2
Potential Threats _____________________________________________3
Hot and Dense ______________________________________________4
Cool and E cient ____________________________________________5
Better and Faster ____________________________________________6
Tranditonal vs. Collaborative Delivery ____________________________7
Where Can Contractors Help? __________________________________8
Mortenson is Listening ________________________________________9
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1
A full 83 percent of colocation provider respondents and 60
percent of corporate and public entity respondents will likely
make mission critical investments in the next 12-24 months.
New internal data center
Internal data center retroft/ expansion
Colocation or expansion o thirdparty commitments
At least one o the above
Current investment plans o mission critical stakeholders reect the likely
growth o the market.
Over two-thirds of respondents reported that overall market
preference is shifting toward co-location facility capacity, with morethan a quarter describing the growth in preference as significant.
The act that more colocation respondents are planning new investments
than corporate or public entities may indicate a shit away rom internal
data center ownership toward colocation acilities. Another sign o this
potential shit: 33 percent o all corporate and public entity respondents
who manage their data center capacity internally are nonetheless planning
to make new colocation acility commitments in the next 12-24 months.
Will your company make any of the following data center
investments in the next 12-24 months?
Design, engineering, and supplier respondents anticipate healthy
volumes o uture activity as well. A ull 89 percent believe their data
center workload will increase over the next two years, with a quarter
anticipating substantially higher volumes.
Strong, Shifting Market
Colocation provider respondents
Defnitely will Probably will Probablywill not
Defnitelywill not
New internal data center
Internal data center retroft/ expansion
Colocation or expansion o thirdparty commitments
At least one o the above
48% 24% 5% 23%
32% 32% 16% 21%
35% 25% 15% 25%
63% 20% 17%
20% 60% 20%
40% 40% 20%
20% 20% 20% 40%
60% 20% 20%
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Staying Power
Participants were asked which two sectors o the economy will have the
greatest need or new data center investments over the next fve years.
Healthcare was ranked as one o the top two sectors by nearly every
participant (92 percent), receiving signifcantly more votes than the next
highest sectors--technology companies (53 percent) and government
(30 percent).
Please select the two sectors you think will have the greatest
need for new data center capacity over the next five years:
Solid data center growth is seen continuing well into the uture.
All respondents
Eighty-two percent of participants believe the current strong
growth of data center construction will continue for at least
the next five years, with 25 percent believing the growth will
last at least 10 years.
Greater digitization of information is seen as the most important
factor driving data center growth, followed by growth in cloud-based
services and applications (Saas, Iaas, etc.).
Please rank from one to five the following items in terms of
what is driving strong data center growth at this time:
All respondents
Greater digitization o inormation
Growth in cloud-based services / applications
Growth o new devices
Growth in other applications / services
Corporate legal requirements to maintain data
Driving growth the most
(2.0)
(2.2)
(2.4)
(2.8)
(2.9)
A 2011 study by Gartner shows that the volume o storage data isgrowing at a rate o 40 percent to 60 percent each year. Not only
is dramatic growth continuing in established mediums such as
corporate email, but new media ormats such as video recordings
are now being stored.
Cisco recently released a study stating that by 2015 data center space
devoted to cloud computing will grow an astonishing 12 times romwhere it was in 2010.
Driving growth the least
AverageRank
ing
Received
Healthcare
Technology companies
Government
Goods companies (e.g. consumergoods, manuacturers)
Education
92%
53%
30%
Services companies (e.g. lawfrms, fnancial organizations)
7%
10%
13%
% o Top Two Votes Received
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Potential Threats
What are the one or two greatest threats to the data center
market that could end current growth?
We asked respondents to write down the one or two biggest threats that
could end the data center boom. Their grouped responses are shown below.
All respondents
These responses suggest that for many it would take a
major economic or political event of a scale much greater
than exists todaysuch as a global economic collapse or
the passage of sweeping new CO2 regulationsto bring
down the mission critical market.
Although the weak economy o the past several years has ailed to stop
the expansion o data centers, the top threat identifed by 27 percent o
respondents was the economy and the potential or a double dip reces-sion. Likewise, although government policies today do not signifcantly
hinder the market, regulations received the second highest mentions.
Recession / economy
Regulations / government
Price / cost
Financing / banking industry problems
OverbuildingNew technologies / designs
Nothing
OtherThe cloud
27%
16%
11%
11%
8%
8%
6%3%
10%
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Hot and Dense
Which does your current data center operations include?
A high majority of respondents currently utilizing the above
features were colocation providers, which suggests theseproviders are early adopters of new practices.
Corporate, public, and colocation participants were asked whether
their current mission critical operations include emerging data center
characteristics such as modular data centers. Approximately 30 percent
said high-density and high-temperature operations were a major part o
their operations, with another 42% reporting these characteristics were a
minor part o operations.
Corporate, public entity, and
colocation provider respondents
Similar to current operations, more participants see high-temperature
and high-density data centers as playing a major role in the uture than
other characteristics such as remote, containerized, or renewable energy
data centers.
How much of a future trend will the following be?
All respondents
Equipment / data centers thatcan operate at high temperatures
High-density data centers(>250 watts / square oot)
Containerized or modulardata centers
Data centers outside o the U.S.
Major part oooperations
Minor part ooperations
Not part o currentoperations
31% 42% 27%
27% 42% 31%
23%
25% 15% 25%
23% 23% 54%
65%12%
39% 53%8%Remote / non-urban data centers
Equipment / data centers thatcan operate at high temperatures
High-density data centers(>250 watts / square oot)
Containerized or modulardata centers
Data centers outside o the U.S.
Major uture trend Minor uture trend Will not be a uture trend
70% 24% 6%
68% 28% 4%
43%
25% 15% 25%
43% 52% 5%
23%34%
48% 19%33%
Remote / non-urban data centers
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Cool and Efficient
Rank the following factors in terms of which most influence
where you locate new data center investments:
The large number of promising technologies and areas
participants identified reflects the tremendous advancements
currently taking place, and also suggests a lack of agreement
as to which offer the most promise.
Respondents were asked to write down the most promising new
technologies they see or data centers. Their grouped responses are
shown below.
Respondents did not consider proximity to their existing business to be
one o the top fve actors driving new data center location decisions.
However, respondents participating in this survey also have not rushed
outside o cities to construct mission critical acilities. Only eight percent
o participants stated that remote or non-urban data centers were a
major part o their operations.
Energy and cooling costs receive top consideration
when making data center location decisions, which is
understandable given the cost of these factors to facilities
that operate 7x24x365.
What are the most promising new technologies
you see for data centers?
Corporate, pubic entity, and
colocation provider respondents
Cost o energyCost o cooling/potential or ree cooling
Proximity to fber
Little or no threat o natural disasters
Cost o real estate
Proximity to transportation
Proximity to your existing business
Greater Influence on Location
(2.0)(2.2)
(2.3)
(3.3)
(3.4)
(4.4)
(4.9)
Lesser Influence on Location
AverageRanking
Received
Many technologies/areas mentioned relate directly to energy and energy
e ciency. The number one response o alternative, on-site energy
generation is promising to many even though certain challengessuch
as initial build cost premiumsremain to making on-site generation a
reality. Many responses also relate to reducing cooling costs, includinghigher operating temperatures, designs that optimize the use o
ventilation and evaporative cooling techniques.
All respondents
Alternative energy / on-site energy
Higher energy e ciency
Modular / exible designs
Airside economizing / better use o air
Evaporative cooling
New cloud services / applications
Other cooling technologies
Other
High density data centers
15%
13%
10%
8%
8%
6%
6%
6%
4%
Higher operating temperatures13%
Better voltage distribution
12%
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Better and Faster
Participants were optimistic that the e ciency o mission critical
acilities would continue to improve.
What speed to market is reasonably achievable over the
next five years for a new Tier III, two megawatt data center?All respondents
In your opinion, what data center efficiency level will be
considered average over the next five years?
70%
Fifty-eight percent of participants believe an average PUE levelof at least 1.3 is achievable over the next five years, which is a
30 percent improvement over the 1.8 average PUE level
reported in May by the Uptime Institute.
Power Usage Efficiency (PUE) Level
All respondents
What will drive greater data center efficiency?
Speed to Market in Months
All respondents
About half of participants believe a 10-12 month speed to
market can be achieved for a new Tier III, two megawatt
data center, with another 38 percent believing a six to nine
month timeframeor even shorteris possible.
When asked to write down the actors that will drive greater data
center e ciency, higher operating temperatures and better cooling
technologies were mentioned the most. Several others mentionedtheir belie that external actors will orce data e ciencies, such as
higher energy prices and potential government policy actions. A ew
participants even expressed a belie that a new carbon tax will be
implemented in the uture.
Respondents were also asked what uture speed to market is
achievable over the next fve years.
This represents a signifcant improvement rom today, where Tier III
data centers can oten take well over a year to construct.
1.2 PUE 1.2 - 1.3 PUE 1.4 - 1.5 PUE 1.6 - 1.8 PUE >1.8 PUE
4% 54% 15%26% 1%
Better cooling technologies
(airside economizing was 7% o the 21%)
Pressure / actions rom government and
utilities
Energy costs
Better understanding / educationR&D / better designs / peopleSustainability concernsOther
21%
16%
12%
5%
5%
3%
17%
Higher operating temperatures21%
< 6months 6 - 9months 10 - 12months 13 - 18months
2% 36% 13%49%
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Traditional vs.
Collaborative Delivery
A number o delivery methods are utilized to construct new
mission critical acilities, ranging rom the traditional design-bid-
build approach to collaborative solutions such as design-build andintegrated project delivery (IPD).
The majority o corporate, public entity, and colocation providers
believe that preerence or design-bid-build is growing at this time.
A couple o respondents stated that the current economy has made
this approach more attractive rom an overall cost standpoint.
These sentiments contrast with the majority o engineering, design,
and supplier respondents, who believe preerence in design-duild
and integrated project delivery is growing. It was not clear rom the
written responses why A/E and supplier respondents would perceive
more growth in collaborative solutions than owner respondents do.
Integrated approaches can ensure desired results when executingcomplex projects. The growing sophistication o mission critical
acilities may be driving greater interest in design-duild and IPD
within design and contractor communities. Owners who are less
amiliar with these methodologies may still need more inormation
regarding their advantages.
It should be noted that only a small minority o respondents
elt preerence or any particular delivery method was growing
signifcantly, suggesting relative stability in delivery preerences at
this time.
What is the trend in preference across the industry for the
following project delivery methods?
Corporate, Public Entity, andColocation Provider Respondents
Engineering, Design, and
Supplier Respondents
Design-Bid-Build
Integrated ProjectDelivery (IPD)
Design-Build
CM at Risk
15% 56% 22% 7%
12% 12% 73% 3%
18% 35% 54% 3%
21% 25% 46% 8%
Design-Bid-Build
Integrated ProjectDelivery (IPD)
Design-Build
CM at Risk
6% 28% 35% 31%
3% 32% 53% 12%
18% 48% 23% 11%
15% 57% 20% 8%
Growingsignifcantly
Growing Stayingthe same
Shrinking
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Where Can
Contractors Help?
Educate and help the client understand the impacts of
their decisions, said one respondent.
Participants wrote down the ways they elt builders can most help new
mission critical projects be successul. Their grouped responses can be
seen to the right.
Owners o data centers such as corporations and colocation providers
emphasized the importance o builders to eectively educate, listen, and
communicate with them.
One important way contractors can help clients understand the
impact o their decisions is through the use o advanced technolo-
gies such as BIM/VDC. These technologies improve the coordinationand exchange o inormation between project stakeholders and
allow or the early identifcation o issues that could prove to be
costly during the construction phase.
Owner responses point to a potential larger role or alternative delivery
methods such as design-build. Alternative methods aord builders the
opportunity to advise owners early in the process beore key design and
investment decisions are fnalized.
Engineering and design respondents ocused on the need or builders
to be involved early in the process, collaborate with others, and bring a
strong team to the project.
What is the most important thing(s) a builder can do
to ensure a successful mission critical project?
Engage early to ensure that designs and speed to market
demands can be achieved, said one A/E respondent.
GCs who bring the best collaboration and communication
skills ensure the most successful project, stated another.
Corporate, public entity, andcolocation provider respondents
Educate and inorm
Listen / understand customer needs
Communicate
Ensure the best price
Be involved early in the process
Other
34%
23%
11%
11%
11%
10%
Engineering and designer
respondents
Be involved early
Collaborate, integrate
Support design-build
Listen / understand needs
Accurate pricing
Other
26%
22%
8%
6%
6%
14%
Have a great team12%
Communicate6%
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Mortenson
is Listening
We sincerely thank the proessionals who oered their time to participate
in this study. Input rom studies like this and active listening to our
customers and business partners in day-to-day dialogue orm the basis
or the strategic direction o Mortenson Construction. Our aim is to bein lockstep with our customers and partners, resulting in a construction
experience thats second-to-none.
In todays dynamic mission critical industry, we are continually examining
our procedures with an eye to streamlining processes and creating
e ciencies. Our goal is to deliver e cient, high quality structures
that provide our customers the lowest liecycle cost o ownership. We
invite our customers to explore our industry-leading alternative energy
solutions and sustainability capabilities. We are dedicated to working
in an open and integrated manner with all o our business partners and
customers.
We welcome the opportunity to share more with you about Mortensons
mission critical expertise, delivery methods and unique capabilities to
provide world-class quality, innovation, and service to our customers.
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To learn more about Mortensons mission critical capabilities, contact the office nearest to you:
Chicago, IL Denver, CO Madison, WI Milwaukee, WIHansel Bradley Courtney Ryan Je Madden Alicia Dupies847.472.8104 720.259.4823 608.287.5949 262.879.2537
Minneapolis, MN Phoenix, AZ Seattle, WA Toronto, Canada Shanghai, ChinaScott Ganske Ron Vokoun Chuck Haigh Brent Bergland Mike Koalska763.287.5147 480.339.7835 206.795.1096 763.287.5649 763-287-3545
Mortenson Offi ces and Mission Critical Project Locations:
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A U.S.-based, amily-owned business since 1954, Mortenson Construction is a leading builder
in North America and one o the only domestic builders with capabilities in Asia. Mortenson has
more than 11 million square eet o mission critical construction and renovations nationwide
on our resume. Eighty percent o our mission critical experience is with repeat customers.
With services in general contracting, construction management, design-build, EPC/BOP and
project development, Mortenson is capable o delivering projects o any scope and size in
North America and abroad. From cutting-edge stadiums and state-o-the-art, LEED-certifed
mission critical projects to some o the most innovative renewable energy projects on the
planet, Mortenson is building structures and acilities or the advancement o modern society.
With o ces across the U.S. and operations in Canada and China, Mortenson is a global company
poised to continue building whats next.
w w w . m o r t e n s o n . c o m
2012 M. A. Mortenson Company. Mortenson is a registered trademark o M. A. Mortenson Company.
For questions regarding this survey, contact:
Steve Pekala, Manager o Market Intelligence | 763-287-5337