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The Impact of COVID-19 on Digital Infrastructure

If someone had told you on New Year’s Eve that the first quarter of 2020 would see an online meeting service become more valuable than three of the travel industry’s top companies combined, that traffic on one key internet exchange would top 8 terabits per second, and that demand for one company’s VPN would increase 700% – you would have assumed they’d had far too much to drink.

Yet this is the reality of the COVID-19 pandemic. And it has put global digital infrastructure – and the individuals who build and operate it – to the test.

This is the first in a series of blog posts reflecting the top-of-mind issues discussed during the Spring 2020 Infrastructure Masons Advisory Council meeting and Global Member Summit. Attendees included senior-level end users and partners from across the digital infrastructure ecosystem. The Advisory Council meetings are private, closed door affairs and comments made there aren’t attributed publicly. The Global Member Summits are open to all iMasons and comments made there are publicly attributed.

“The importance of digital infrastructure is being proven out now during this pandemic,” said Joe Kava, vice president of Data Centers at Google.

Noelle Walsh, Corporate VP at Microsoft, agreed. “We’re being counted on a lot more now as business essential. Microsoft Teams, for example, supported 44 million users and 4 billion meeting minutes in a single day. Healthcare providers, education systems, and others all around the world are clamoring to use this capability. We’ve seen a huge spike in demand.”

“The importance of digital infrastructure is being proven out now during this pandemic.” Click to tweet

Will working from home increase demand for edge capacity?

A significant proportion of the workforce is now working from home. That massive shift has affected life in myriad ways – from reducing pollution to inspiring new traditions, and of course, increasing demand on digital infrastructure.

“Data center demand has increased particularly from service providers and telcos,” explained one industry partner. “Companies that were going through digital transformation as part of a longer term journey have accelerated their efforts. That will continue as companies build out their capabilities to support their employees and continue doing business in situations like this.”

Asked whether the edge now means the home, Kate Brandt, Sustainability Officer at Google, said that it’s too early to draw any conclusions about the permanency of these shifts. She said one of the reasons working from home works for Google now is that employees had built relationships based on face-to-face time. “Can we be more flexible? Absolutely, but we’ll have to find a balance,” she said. “It’ll balance out but this will undoubtedly change the way we work.”

iMasons founder Dean Nelson said, “Before, people said ‘Work-from-home won’t work.’ But now we’re experiencing a forcing function that has made it work.”

Does that change the approach to data center construction? “We’re doing both – hyperscale and smaller at the edge,” explained Microsoft’s Noelle Walsh. “In newer geographies we are going with smaller footprints. There is a big push to edge. Latency is important, and being closer to our customer base. We’re developing templates for small data center footprints – even modular units.”

“Work-from-home does change the approach to data center construction. It’s about doing both hyperscale and smaller at the edge.”  Click to tweet

Building and operating digital infrastructure in a COVID-19 world

“I have spent the entire time figuring out how the hell you build and operate in a COVID-19 world,” explained one hyperscale end user. “There are things we can’t do and things we have to do differently.”

But companies are figuring it out. “From an infrastructure delivery perspective we had our best week ever with new capacity we were able to bring online,” explained Noelle Walsh. “We hit about 100 MW of new capacity globally within a couple of weeks. Even given social distancing and other protective measures at construction sites. It was a cheer-me-up moment that we could deliver.”

For many leaders, maintaining a safe environment for employees and delivering for the business is a balancing act. “For those of us who have operations and capital programs, it’s complicated to make sure we’re doing the right things for contractors and employees and also for the company. That’s mostly what I’m worried about,” explained one hyperscale end user.

Like enterprises, digital infrastructure providers have had to figure out how to do more digitally. One company is hosting virtual tours for prospective customers. “Making sure customers can get the capacity they need as quickly as possible is our second priority, right after ensuring employee safety,” explained one colocation provider. The tours have gone well. “Prospective customers are able to see the ins and outs of the site in sufficient detail that they don’t need to see in person.”

“We’ve done virtual factory witness tests,” explained one partner. A colocation provider shared, “For site finding, we’re hiring local photographers to do remote video sessions with a drone and a camera instead of flying our engineers all over the world. That cuts down on traveling for our key engineering team.”

Some of these different ways of operating may stick around even after everyone returns to the office (or the data center, as it were). “There are other things, like virtual commissioning, that we hope to make mainstream,” explained one colocation provider. There are added benefits. “Doing more with less will help with talent constraints.”

“Like enterprises, digital infrastructure providers have had to figure out how to do more digitally.” Click to tweet

Is this the new normal?

With regard to doing more digitally, “Everyone is adapting to this forcing function,” Dean Nelson said. “But there has to be a breaking point with the supply chain. There has been a huge lull in China that is bound to have an impact.”

Some Infrastructure Masons agreed, and also see a looming supply chain crisis. Others don’t. But most agreed that the status quo is not sustainable for the long term.

“We have a reasonably defensible position that allows us to have a reasonably safe working environment and still move critical projects,” explained one hyperscale end user. “But I can’t do this forever because the demand curve ahead of me says I need to ramp back up and deliver capacity. Supply chains seem to be okay right now. I assume a quarter delay and another quarter of half productivity before we get back to normal productivity.”

But how much of this is a new normal that will have to be sustainable for the long term?

“My big question right now is whether this is a new normal,” said one industry partner. “I don’t think it is, but I also don’t think we’ll go all the way back to the way things were. So how does that fundamentally change the network [and other digital infrastructure]? People are doing e-learning, watching Tiger King, etc. and doing video calls all day long. Assuming we keep at least a portion of these things, what are the ramifications on the network [and other digital infrastructure]?”

“Some Infrastructure Masons see a looming supply chain crisis. Others don’t. But most agreed that the status quo is not sustainable for the long term.”  Click to tweet

Check back here soon for more insights from the Spring 2020 Infrastructure Masons Advisory Council meeting and Global Member Summit.

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