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 John Sabey of Sabey Corporation.
JOHN SABEY, Sabey Corporation
As CEO of Sabey Corporation, John Sabey heads up a company of 150 driven people in the acquisition and development of a 5.4 million square foot commercial real estate portfolio comprising primarily office and medical technology space. Sabey has long developed specialty technology properties for the medical/life sciences, communications, government, and military sectors. As Big Data emerges as an essential component of hyper-scaled products and services, the company’s leadership has been quick to realize their critical reliance on robust, highly reliable data centers. As Executive Director of Sabey Data Centers, one of the world’s largest, privately-owned designer/builder/operator data center companies, John Sabey has helped to assemble an enviable customer portfolio that includes globally-known enterprises in financial services, content delivery, life science research, entertainment, technology innovation and health care. In 1995, after a successful career in Chicago with Prudential Real Estate Investors, Mr. Sabey joined the family business. He holds a BA from the University of Notre Dame and an MBA from Northwestern’s Kellogg Graduate School of Management.
Here’s the full text of John Sabey’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?
John Sabey: Of the many changes necessitated by the pandemic in 2020, the one most likely to “stick” happens to also be the one most likely to having a lasting effect on our industry: the near global transition to a distributed workforce.
Even as vaccines roll out, restrictions subside, and employees return to workplaces on a more regular basis, the habits we formed and adaptations we made during the lockdowns will continue to shape the modern workforce for the foreseeable future. Ultimately, this massive transition of business toward workplace flexibility was enabled by digital connectivity and the massive adoption of new technologies, both of which drive data center demand.
We have all developed new habits this year, even in our personal lives – online shopping, meal delivery, less travel, meeting virtually, video streaming – that won’t be easily broken, and whose growth has and will rely on the expansion of the data center industry.
Another COVID-driven innovation that is particularly near and dear to the hearts of us at Sabey are the vaccines themselves. Due to our company’s unique position at the intersection of life sciences and technology, we watched with great interest as high performance compute (HPC) and global collaboration enabled such an accelerated vaccine development cycle, particularly for the first-ever vaccines based on messenger RNA. If mRNA proves to be the key to unlocking an entirely new platform for preventing and eradicating disease, this pandemic will have provided yet another test case for HPC, driving future data center capacity demand.
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?
John Sabey: As a data center company, we don’t share Gartner’s vantage point; from our perspective, enterprise demand for data center space was either unaffected or stimulated by the pandemic, or perhaps simply shifted from certain verticals to others.
While the service industries were significantly affected by COVID policies, less affected industries saw surging IT budgets as they flexed their entire workforces to a work-from-home model within weeks. Spending on hardware, software, connectivity, and network security all rapidly increased, and I would think that the infrastructure “retooling” has already largely taken place.
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?
John Sabey: When it comes to the push toward sustainability, the momentum that exists will only continue to build. As global awareness rises, consumers increasingly make purchasing decisions based on their values; the companies vying for consumer business look to their vendors, including hyperscalers, to help them solidify their environmental bonafides.
As energy-intensive as data center deployments are, it stands to reason that corporations will turn a critical eye toward them with regards to sustainability. Data center providers will naturally respond with efforts to increase efficiency, adjustments to their energy mixes, and new options to help their customers meet these sustainability initiatives.
Headquartered in the Pacific Northwest, Sabey Data Centers enjoys inexpensive, renewable hydroelectric power that positioning us well to supply abundant, low-cost green energy to our data centers in the region. We look to bring in renewable sources into our energy mix at our other campuses to both offer our customers and meet our own goals.
We continue to seek other renewable energy opportunities in locations that our customers need to be, and look forward to announcing some exciting plans surrounding sustainability and renewable power in 2021.
Data Center Frontier: What will we be surprised by in 2021? What are the trends you’re following that will make an outsized impact?
John Sabey: I think we’ve all had enough negative surprises in 2020, so I’m looking to 2021 with great optimism!
One trend that I am watching closely, from a data center perspective, is interest rates. Financial decisions made in the US and globally in 2020 to mitigate the effects of the pandemic will eventually be reflected in the market, and likely in the form of an interest rate increase. Already on the rise, surging interest rates in 2021 would have a significant impact on data center pricing, both for end users and developers. I’m hoping that this doesn’t come to pass, but it’s only prudent to keep it in mind while making plans for the new year.