With New Funding, Salute Tackles the Data Center Staffing Challenge

In a future filled with servers, there is a growing business opportunity in supplying trained staff to support the world’s data centers.

Salute Mission Critical is a leader in addressing the staffing gap in IT facilities by recruiting and training military veterans to become data center technicians. Private equity firm LLR Partners has made an investment in Salute to bring more job opportunities to veterans and scale its operations to support leading data center providers.

Salute co-founder and Chairman Lee Kirby says the partnership with LLR “will help us make an even greater impact for the industry and the lives of veterans and military spouses, proving that a triple bottom line approach is good for business and for the world.”

Staffing firms like Salute fill an increasingly important role in the data center industry, helping offset a “grey tsunami” of experienced workers approaching retirement age, even as the explosive growth of cloud computing and artificial intelligence drives demand for more data centers and more skilled labor to staff them. Data center staff requirements are forecast to grow globally from about 2 million full-time employees in 2019 to nearly 2.3 million by 2025, according to research from The Uptime Institute.

Filling that gap has proven to be a strong niche for Salute, which had revenue growth of 375 percent over the last five years, placing it on the Deloitte Technology Fast 500 list in 2020. LLR Partners, a private equity firm focused on “high impact” companies, sees a growth opportunity in Salute, which has introduced more than 2,000 veterans to the data center industry.

“For many years our industry has talked about the talent shortage,” said Kirby. “Salute Mission Critical has shown that an effective workforce development strategy that is executed well can be enormously successful. It seems that this move should be the first of many from the investor community in general because the talent shortage is an enormous issue and is becoming critical as the industry continues to grow at a rapid pace.”

Profit With A Purpose

Kirby and CEO Jason Okroy founded Salute Mission Critical in 2012 to pursue “profit with a purpose” in supporting both the veteran community and technology firms. Salute has approached the data center staffing challenge in two ways – creating training programs to provide veterans with essential knowledge, and contracting to provide services to data center operators.

The company now operates in 25 countries and supports about 250 data centers for clients including Compass Datacenters, Aligned, Cloudflare, EdgeConneX, Digital Realty, CyrusOne and ServerFarm.

“This (funding) should be the first of many from the investor community, because the talent shortage is an enormous issue and is becoming critical as the industry continues to grow at a rapid pace.”
Lee Kirby, Salute Mission Critical

Military veterans often struggle to find meaningful work after completing their active duty. Salute believes military veterans are well equipped for work in mission-critical facilities, which provide a good income and sense of purpose in a growing field. Salute works with the Department of Defense, the Veterans Administration and state-level veterans’ groups to identify candidates and introduce them to the company and data center industry.

“Salute Mission Critical is small business that is quickly growing into a medium enterprise,” said Kirby. “As would be expected at this point in our growth, we will invest in infrastructure required to grow even larger. New systems and processes will allow us to move from a 400-strong workforce to whatever the market will bear. With this growth will come many new challenges that can be best addressed from a team with a proven track record so the relationship is much more than capital and why we consider it a strategic partnership.”

“As our partner, LLR will not only provide the capital but also the experience helping businesses like ours continue to scale operations, teams and processes,” said Okroy. “This will enable Salute to capture more of this quickly growing market opportunity.”

Seeking 325,000 Staffers

The data center industry’s staffing challenges are not new, as DCF noted in our 2019 Eight Trends forecast. The urgency of the dilemma was highlighted by a recent Uptime report that quantified the staffing gap.

“Our research shows that while many managers are already struggling to fill open job positions, more than 325,000 net new FTE equivalent positions will be needed between 2019 and 2025 globally,” Uptime writes in a report led by VP of Research Rhonda Ascierto. “”Demand for different types of data centers mirrors the long-term, fundamental and structural tilt toward ever-greater use of outsourced data center services, such as colo and cloud, and a relative decline in enterprise data center demand.”

In addition to the growth in cloud and colo, the emergence of edge computing will bring more data centers that are distributed and operate with minimal or no staff. That figured to provide opportunity for companies that provide staff for the data center industry. with “lights out” data centers that are typically unmanned, but need periodic smart hands services for customer support. Salute has relevant experience, providing support for EdgeConneX data centers that are typically unstaffed but need on-call maintenance and support.

Amid the data center boom, global investors are raising billions of dollars to invest in digital infrastructure, citing extraordinary demand for capital to fuel the data economy. Most of this capital has focused on opportunities in data center real estate, especially developers targeting hyperscale deals for large cloud and video companies.

Staffing as an Investment Opportunity

With its investment in Salute, LLR anticipates there is also upside in funding the growth of staffing.

“The proliferation of connected devices, rising volumes of data capture and data interactions, and cloud adoption are just a few of the underlying trends driving global growth in the data center market,” says Mike Levenberg, Partner at LLR Partners. “Salute answers this rising market demand with best-in-class operational services for hyperscale and colocation facilities and a unique ability to grow quickly and globally with customers.”

“Salute has been able to capitalize on strong tailwinds by maintaining a best-in-class recruiting and training program, consistently delivering high quality services and building strong customer relationships,” says Katie Lankalis, Vice President at LLR Partners. “We’re excited to partner with Jason and his team to help focus on the next stage of growth and global expansion for Salute.”

Data center staffing will be a long-term opportunity, according to Kirby.

“The exciting thing about a strategic partnership like this is not the initial investment but the commitment to an aggressive growth strategy that will drive even greater value to the industry and benefits for veterans and their families,” he said. “Our business model solves the talent shortage in the industry but also brings a new service delivery model to the industry that drives even greater benefit. With Salute Mission Critical, you can operate your data center sites more effectively and drive bottom line results. In addition to the world class global services delivery Salute’s diversity fuels innovation and change as a competitive advantage.”