Executive Insight: Kris Holla from Nortek Air Solutions

The Data Center Frontier Executive Roundtable features insights from industry executives with lengthy experience in the data center industry. Here’s a look at the insights from Kris Holla from Nortek Air Solutions.

Kris Holla is Group Vice President, Channel Sales, Nortek Data Center Cooling, a segment of Nortek, St. Louis. Nortek Data Center Cooling offers efficient, sustainable cooling solutions to fit the needs of any data center – from chip to plant. Holla has more than 27 years of global experience in a broad array of industries including datacenter, networking, computing, telecom, industrial, medical, and general electronics.

Here’s the full text of Kris Holla’s insights from our Executive Roundtable:

Data Center Frontier: The COVID-19 pandemic has defined much of 2020. As we enter 2021, what pandemic-related changes are likely to have lasting impact for the data center industry, and why?

Kris Holla: The workspace has been changed forever, because COVID-19 has accelerated the digital revolution. The data center has become the supportive backbone and pillar of this revolution. More than 40-percent of people who once worked 40-hour weeks in an office, are expected to continue home office working part or full time once COVID-19 declines in 2021. This might spell a future problem for office space leasing, but it is great news for the data center industry’s continued growth.

Parallel to this change in work environments is the transition from personal computers to working from the cloud. With this transformation, these workers will need proper data collection, increased data privacy and security, broader bandwidths, less latency and all the other needed home office tools and capabilities that require more data center power. Things that were unheard of five years ago will become the new normal, such as training and supplying the workforce to work in a virtual work environment.

All of these cultural changes mandate more capacity, especially with the emergence of the 5G network. Amid all of this change, the challenge facing operators is cooling equipment that must mitigate the additional heat generated from these cultural work trends, not to mention AI, autonomous vehicles, gaming and other oncoming power-consuming paradigms. Consequently, cooling capacity, efficiency, cost-effectiveness and sustainability will directly affect data center industry’s future profitability.

Data Center Frontier: Gartner says many enterprise customers are holding off on major IT spending during the pandemic. Will that continue in 2021? Or will the “digital shift” from COVID-19 prompt enterprises to invest in retooling their infrastructure?

Kris Holla: I’m not in total agreement with the Gartner study. Yes, enterprise customers have not recently invested in infrastructure as they have in the past. However, the digital revolution has still created demand for more capacity. Therefore, enterprise customers still have to upgrade their capacity, but the trend is to defer the investment to colocation facilities, versus investing in their own facilities. Infrastructure is still being upgraded, but enterprise customers are relying on colocation and cloud providers to invest in it.

COVID-19 has had a negative health and economic impact, but its positive effect on spurring the digital revolution is monumental. COVID-19 has accelerated the digital revolution that was predicted to progress over a 10-year period, but now it suddenly appears to have unfolded amazingly in just two years. COVID-19 has accelerated everything from facility space needs, equipment spending and cooling capacity, the latter which is becoming increasingly critical for the data center industry to maintain pace.

So, the enterprise customer still has more IT capacity demand, but infrastructure-wise they’re deferring the cost to colocation. Therefore, I see enterprise infrastructure investment shifting toward colocation and cloud service providers such as Microsoft Azure, Amazon AWS Cloud Services and Equinix Cloud Exchange. The investment is still there, because data center infrastructure is expected to grow to well over $200 billion in 2021.

Data Center Frontier: Hyperscale customers are more focused than ever on sustainability and climate change. Will this renewed focus drive meaningful change in the data center industry? If so, what might that look like?

Kris Holla: Data center operators and their customers are aligned on the issue of sustainability like never before. They both agree future infrastructures must reduce power and water usage to meet the public’s expectations and to reach their sustainability goals. The rise of hyperscale data centers by large cloud computing corporations, such as Google, Microsoft and Facebook have blazed the trail to sustainability capabilities. Colocation providers such as Equinix, Digital Realty and NTT are emulating the hyperscale centers’ sustainability measures.

Consequently, more colocation customers are evaluating their data center providers by sustainability, not just for cost savings that are passed down to them, but also to meet their own corporate environmental stewardship goals.

Innovations in liquid cooling the last couple of years are producing unprecedented power and water sustainability statistics. Statistics such as pPUE of 1.06 and WUE (L/kWh) as low as 0.09 have recently been recorded by hyperscale facilities using recently-developed variations on indirect evaporative cooling that abandon traditional energy and water-intensive direct expansion (DX) compressor and cooling tower technologies.

These statistics are only part of the solution toward reaching net-zero energy goals. New liquid cooling technology is also being combined with trends such as waste heat utilization (heat recovery), reclaimed water and renewable energy technologies of solar and wind as shown by Nortek StatePoint technology.

It’s an exciting time that the data center industry has never experienced before in terms of up to 20-percent power and 90-percent water conservation potential versus traditional liquid cooling technology.

Data Center Frontier: What will be surprised by in 2021? What are the trends you’re following that will make an outsized impact?

Kris Holla: Corporations will continue to be surprised at how much and how well their businesses can run in a virtual environment. COVID-19 has accelerated this process, but we’ve only scratched the surface in 2020. Face-to-face meetings will always be important for sales, but until business people start traveling regularly again, corporations are taking travel budgets and investing in virtual environment tools.

I think there will be more surprises with new companies that develop platforms, but have few physical assets. Uber, for example, is very profitable due to the platform it developed, but has no physical transportation assets. I think it will be surprising to see how many industries adapt similar virtual platforms. They will need to depend on the data center industry for their commerce. These platform companies will also depend on employees to work remotely and be provided work space tools in their home offices in 2021.

Digital companies will continue to disrupt traditional business models throughout 2021. An example is Amazon’s recent entry into medical drug distribution, which will take a toll on traditional wholesale and retail pharmaceutical channels. Another surprise coming in 2021 is data center operators taking the lead of the hyperscale companies on sustainability and the industry trend of transitioning to liquid cooling, which enables unprecedented water and power conservation, energy recovery, recycled water, solar, wind and other sustainable trends.