Riding the Tsunami

Mark Kidd, EVP and General Manager, Iron Mountain Data Centers

Just over a year ago I wrote about the AI Tsunami and the challenges it would bring. Now we are riding that wave. It’s exhilarating to be a participant in such a historic growth period. But the level of acceleration we have all experienced brings its own challenges and requires some improvisation to make it work.

2024 was an extremely productive year, and in the last few months of the year made some major progress in terms of delivery, and site and power acquisition. In the final quarter we completed construction of over 100 MW of capacity. We also announced a couple of major land and power deals in Virginia that would have multiplied our business size just a few years ago. Expanding our already significant presence in Manassas (which offers more than 2,000,000 ft2 of space and 280 MW of power spread across five operational data centers, with four more under construction) we added a new 40-acre site with 150 MW of capacity. And at almost the same time, in Richmond, we acquired a 66-acre site with the potential to scale to 200 MW and beyond.

Every business in the sector is doing its best to broaden its pipeline. The scale of the industry is changing as the world witnesses the largest ever wave of tech investment. Bigger, more power-hungry sites are now the norm, as our hyperscale customers in particular up the stakes for AI. Land and power acquisition strategies are adapting to meet this demand, accelerating investment scope, not just in North America but around the world.

The market is getting bigger, fast. We are growing at a quite exceptional rate of over 20% year-on-year, and new opportunities keep opening up in new areas as our total addressable market gets even larger, fed by the acceleration of the cloud and the remarkable surge towards AI.

Planning for future challenges

This is great for us, and for the industry as whole, but these levels of growth are not arrived at without some challenges. Getting the balance right between short-term problem solving and long-term capacity building is the key to sustainable success. This has always been a business where we have to plan far into the future, and today we need to be better planners than ever.

• Streamlining supply lines

  Across the industry, construction presents planning and supply line challenges as it picks up to meet demand. In many places, major mechanical and electrical components like generators and utility transformers now have lead times of two or more years. Every part of the chain needs to be tackled to address this, and in the year ahead we should see operators playing their part, by continuing to standardize design and developing deeper and more strategic relationships with their suppliers. Managed effectively, this will result in a more streamlined supply chain based on standardized scale and more competitive costs.

• Growing the talent pool

  Looking ahead, we should also be acting now to address a medium-term talent shortage in the industry. As this year’s AFCOM State of the Data Center Report pointed out, 85% of data center personnel are males, and 70% are 45 or older. To fix this effectively we need to look at the bigger picture. We don’t just have to grow the number of younger, and female, critical data center workers; we need to grow the whole tech pool, covering engineers, multi-skilled operators, cybersecurity specialists, and power and electrical technicians. The whole infrastructure equipment stack is growing, and everyone needs that talent. The answer is to engage continuously with our broader tech colleagues and governments, schools, universities and colleges to build large-scale entry gateways into the exciting new AI-driven world of data infrastructure. Good quality intern programs with senior mentoring are very effective for enhancing loyalty and building skills, and we should also keep investing in the communities where we operate, and in the development of existing staff to prepare them for more senior positions.

• Being better neighbors

  Tied to this, because we are growing so fast we need to become more of a people business and less about big grey boxes. It’s easy to forget that a lot of people don’t understand what we do or how it benefits them. For our part, we owe it to the communities where we operate to show them that we are a force for good. Some of this we can tackle with sustainable builds or smart power design, through local hires or or at the planning stage by e.g. offering community green spaces. But once we’re up and running there is no substitute for getting involved face to face. Because Iron Mountain has been going for over 70 years now, we have valuable long-term experience of working with communities, and every business has community service targets. Our Singapore team, who are particularly good at this, recently held a hugely successful charity run and also distributed hundreds of grocery packs for Ramadan. Earlier this year, in Miami, we built green machines for community. Data center staff need to get out more from behind the security perimeter, and they are sure to enjoy it and do the industry a favor at the same time.

• Getting creative with power

  Power availability is definitely the industry’s greatest challenge, with waiting times stretching out three to five years, or even more. Utilities are under pressure to adapt the grid for renewables while scaling up supply, upgrading interconnection and extending transmission. This is a global issue, covering wholesale electrification of everything from heating and industry to transport, but it creates specific challenges for us. We have helped to drive the growth of renewable power generation more than any industry, but it is now clear that renewables like wind and solar are too weather-dependent to provide consistent low-carbon power, and new sources like hydrogen, geothermals, nuclear, biofuels and large-scale storage are not yet available at sufficient scale.

  Over the next few years we need to invest in harnessing these new energy sources wherever possible, but during what is essentially an R&D phase we will need to be more creative than ever. We need to do the best we can, adding consistent renewable sources to balance peaks and troughs using solutions like hydro or tidal, or supporting the grid behind the meter where possible, as we are doing in collaboration with the DOE in Northern Virginia with a large battery storage project. But we also need to acknowledge that not all solutions will be zero carbon at the grid level, and overall emissions may rise in some areas in the short term. We are responsible for delivering the growing capacity requirements of customers in innovative, efficient and cost-effective ways, allowing them to scale up operations worldwide while meeting their clean energy goals, and complying with next generation reporting. At the same time we can help to decarbonize the markets that need it most, and maintain our focus on the incremental improvement frameworks we have established, as we gradually cover the distance between where we are now and our unchanging goal; zero-carbon computing.

• Leveraging AI in the DC

  Everyone is now familiar with the paradox of AI; on the one hand it drives up power usage, but on the other it holds the key to the problem. As new AI-driven applications go mainstream, 2025 is the year to start putting this promise into action in the data center. Last year, we ran a pilot for the DCverse AI-Powered Cognitive Digital Twin in Singapore. In just a couple of months it brought about a 3.5% improvement in energy efficiency. That’s an average reduction in energy usage of 204,600 kWh per month in that facility alone. So now we are rolling similar solutions out worldwide. I am sure there are more AI apps we can use to improve every aspect of the business. Let’s share what we learn, starting with energy efficiency and power usage.

Maintaining momentum

I am confident that 2025 will be another fast-paced and exciting year for our business and for the industry a whole. With everything that is going on it will be easy to be distracted from longer term goals by immediate challenges. But there are several areas where we need to invest now in order to earn dividends and avoid problems later. Focusing on the ones where we can make the biggest difference will be key; strengthening supply chains, growing future talent, and doing our level best to procure and manage space and power creatively and responsibly for our communities and our customers.