Last year was the year that Jones Lang LaSalle Inc (JLL), the global property firm, properly marked its territory as a go-to provider in data centre services.
In January, it appointed Mike Harrington as its new head of data centre facilities management and Tom Glover as its head of data centre transactions, EMEA, in February.
Twelve months later, Chris Street was appointed to the newly created role of managing director for Asia-Pacific, which will see the firm provide integrated data centre client solutions.
According to Jonathan Kinsey, JLL’s head of EMEA data centre services, these investments come in line with growing opportunities in the space.
“The industry, from a data centre perspective, is seeing some material growth as well as lot of change which is creating opportunity for service providers like JLL,” he says.
For years JLL has operated in this space in various capacities such as providing capital and investment, transactional activity around securing sites for people to build data centres, as well as a few projects that saw it operate data centres for clients.
“What we hadn’t done is aggregate that team as a genuine vertical to go to market as the specialists to service the data centre space,” he adds.
That factor, combined with the clear growth in the space, the need for a strong international player (which JLL had identified through its market research), and its existing relationships, led JLL to invest in this new vertical, which started with Kinsey’s role that aggregates leadership across the EMEA region.
In addition to the aforementioned regional appointments, Kinsey shares that the EMEA team has also welcomed Mark Heard who, as head of PDS data centres, will effectively lead “project management and construction”.
Meanwhile, in the Americas, Steven Holland was recently appointed principal of data centre solutions and strategy, reflecting a truly global approach to this burgeoning vertical.
“We’ve got advisory capabilities: ex-IBM engineers and data scientists that advise both investors and operators as they enter new markets,” says Kinsey.
Going a step further, Kinsey shares that the firm is venturing into managed services, noting that in the Americas JLL has a global IT services lead.
“So, we’re stepping beyond the traditional, mechanical, electrical, what we call ‘hard services’ in the grey space of a data centre, to expand our capability to support clients’ customers into what we call the ‘whitespace’,” he explains.
Growth in broadest sense, continues to be top of the list for JLL clients, hand-in-hand with speed to market. There used to be only a few players that were seeing the growth to warrant this, but Kinsey says “now it’s for everyone, from industrial and logistics developers to cloud service providers who are buying their own sites to create a self-build and increasingly, private equity backed real estate people going into new markets”.
The drivers of the growth come from a combination of places, from new international connectivity projects reaching completion, to hyperscaler and cloud service providers, all the way to increasing digitisation.
“Where these new cables are coming on board, there’ll be activity,” he says. “The hyperscalers and cloud service providers are the major drivers to where we’re seeing demand into the property side of things. Then there is the accelerator, which is digitalisation of government activity and digitisation of enterprise in markets with critical mass of GDP.”
Kinsey uses the gaming industry as an example of digitalisation of enterprises, saying “esports becoming a billion-dollar industry last year” is just one example within that space, but that it is also an example of industries “that are putting new demand and new types of scale demand onto the data centre industry”.
The Covid-19 pandemic played its part, as global lockdowns meant that all types of content were in demand and that remote connectivity was paramount.
“In the eye of the storm, it caused delays in decision making, delays in construction and bringing new capacity, delays in pre-planned transitions or relocations, and supply chain issues that have been well documented,” says Kinsey.
One interesting outcome of the pandemic was that it “accentuated investor interest” in data centre infrastructure and saw the demand profile for enterprise or cloud providers go up, to further “reconfirm their drive for growth”.
The biggest trend during this time was a shift in business, operating and working models, which led to “different requirements around infrastructure and IT service platforms”.
One of those was automation in the data centre space, although Kinsey acknowledges this trend was “already there” but was brought forward and magnified by the pandemic.
“As we look to support new entrants to market and existing data centre operators, a lot of what we’re talking to them about is the technology solutions around ensuring the quality, robustness and reliance of data centre operations, with maybe a slightly different view on staffing models,” says Kinsey.
In its latest sustainability report, Powering Change: Sustainability in the European Data Centre Sector, JLL wrote that data centre sustainability is now at the top of the agenda for operators, customers and stakeholders.
Specifically, 30% of all JLL customers want to see contractually binding strong efficiency and sustainability commitments, with a further 43% expecting efficiency and sustainability clauses in contracts.
“One of the reasons I joined JLL is because, even at an introductory management level, sustainability was very clear priority. Even at our board representation at global and country levels, you see stainability represented.
“For example, our previous EMEA CEO is now our global head of sustainability – that’s a powerful statement. We are threading sustainability capabilities through everything that we do,” he says.
One key part of this conversation is around metrics, because you cannot change what is not measured. “A lot of companies are increasingly using targets, but often you lift the lid and they haven’t got a plan on how to deliver on those targets,” says Kinsey.
“That’s where we talk about the metrics that matter, because there are still a lot of measurements the industry have to put in plans to improve or meet the criteria and requirements our customers are demanding.”
Emerging technologies such as quantum will ultimately play their part in the data centre space.
“Higher compute means higher power requirements, higher rack density, higher heat production, therefore more challenges around design, and sustainability,” which the industry must prepare for, warns Kinsey.
Another popular development that has the industry ablaze is the metaverse. But this is one trend that has not made its way to Kinsey and his team.
“We’ve had no meaningful conversations as of yet,” he says. “At least not at the business level. At this stage, it’s more of a general industry or interest conversation dialogue.”
He does say that society “adopting that type of technology” is “inevitable” and its impact on digital infrastructure as a whole will be “material”.
As we round out the conversation, the roadmap for Kinsey and his team is as one would expect: continuing to support its customers with its newly bolstered vertical, leveraging the company’s investment in strategy of JLL Technologies and continuing the energy and sustainability part of the conversation.
What is most interesting is that Kinsey’s believes that every player in JLL’s space needs to inspire new people to come into the business and the wider industry.
“It’s a growth industry and it’s going to be an increased employer in a number of markets, but the supply and demand equation needs addressing as it’s placing some pressures on our industry. We need to do that by inspiring new entrants at all kinds of levels and in new and different roles. This is a priority for me,” he says.
The biggest reasons for this talent shortage, and the loss of young entrants to the likes of Meta and Google, are around the industry’s profile and communication.
“Get people out there to inspire and go out there and preach it to a certain extent. Your average person doesn’t know what a data centre is and that it underpins everything in the data world, from mobile phones to computing and the internet.”
He says the starting point will be to “find ways to market our industry, so that you raise the profile in a way that connects it with the why”.
In Kinsey’s words, once you get into the ‘why’ of this infrastructure, you begin to understand it enables “social groups and populations to leapfrog stages of technology development and stages of economic development by giving them access to all that can be found on the cloud. It can fast track the economic development, maturity, sustainability, health and wealth of societies. The data centre industry is critical to all that.”
