The Evolution of Data
What’s changed in the European data center market since IBM opened its first international office in 1956? On this episode, join Jason Monks, Structure Tone Dublin’s in-house data center expert, and Garry Connolly, president and founder of Host in Ireland, as they discuss the evolution of data and data centers, the benefits of hosting digital assets in Ireland, and why Irish contractors are the top choice when it comes to designing, building, and operating data centers across Europe.
TRANSCRIPT
Jason Monks:
All right, Jason Monks here from Structure Tone Ireland and I am part of the STO Building Group. I’m in my thirteenth year with Structure Tone, and now specializing in data centres and just leading up as the director for mission critical here in Ireland, part of the international brand, leading into the STO headquarters back in New York. This morning we have a very esteemed guest, Mr. Garry Connolly, from Host in Ireland, he’s going to introduce himself.
Garry Connolly:
Hi Jason. Thank you so much. As Jason said, Garry Connolly. I’m founder of Host in Ireland. I’m a failed COBOL programmer if the truth be known. I came out of college to be a programmer. I realized very quickly that um, I was really rubbish as an engineer but one of the things I realized was, uh, not all great engineers are great communicators and not all great engineers, as probably many of you and your listeners know, actually listened to what the end user wants. And so I was that sort of, meat in the middle of the sandwich, taking the buffer off the guy wanted and what the engineers were listening to. And that got me on my journey with data. I’ve been fascinated with data. In fact, I’ve been often called a digital optimist. When all others are looking at the negatives associated with data, I say, well, let’s be optimistic about it. I’ll see that for instance, today to where we are discussing the centres, which is obviously the location that the data sits and gets distributed from. So thank you so much to STO and thank you to Structure Tone for the opportunity to talk about data. Hopefully you’ve got a bit to say about centres and, when you’re joining them together, we’ll talk about data centres.
Jason Monks:
Garry, fabulous introduction. Thank you very much. A bit like myself, I didn’t start in data centre industry. Started off doing comms rooms for one of the large US financial institutions, which then developed into data centres providing services or same. Can you tell me a little bit about how you got into the data centre market?
Garry Connolly:
As I said earlier, I came out of the college as a programmer, but essentially my love was with data, the power of what it could do and what it couldn’t do. Um, and you know, at that stage though, um, it was on floppy disks. We stored on floppy disks, we saved on floppy, then hard disks were developed, then personal computers, then we connected all the personal computers together and we called them LANs or networks and we decided that wasn’t such a great idea and we developed the cloud and the cloud really is just a matter of moving those servers that you used to have in your premises to somewhere else because it would possibly more secure. So that’s the evolution if you track data and how we look at it and how we use it and how it becomes part of our day-to-day lives. Really, I just see where I am now as the evolution from floppy disks to hard disks to data centres and where they live and where the servers live is obviously now predominantly in a custom-built data centre. And as we move forward, those data centres will be either your own, somebody else’s or a public cloud location.
Jason Monks:
So you approached from–the data is what got you involved in this and it’s really interesting and challenging, but hugely rewarding sector of the industry. And I’ve come from, from more of the centre side, which is the design, the construction, the commissioning, and sometimes it’s operating, but you can’t have one without the other. On something you said earlier, without data the centres that we build are simply glorified logistic warehouses, so it’s an intricate operation to manage the two entities here, data and the centre. And what Ireland is now world-known for is the data centre development.
Garry Connolly:
Just before we go onto Ireland, I guess, one of the important things to remember is that data centres are the manifestation today holding data, which is the fulcrum part of industrial revolution part for this era. And I think that is part of “the why.” Most people don’t understand the industrial revolution one and two and three. So when we stand up, we say the industrial revolution four, which is the oxygenous data – data is today what steam was in the first industrial revolution. So when we consider, so, “Oh, it’s only a dot-com bubble, it’s going to go away, we’ve had this before,” and all the rest, the fundamentals and what we have to be mindful of is data is steam. It’s the actual part of everything to do with every industry. And we often then think, as you know about the, the Facebooks and the Googles and the Microsofts and all these types of companies and every industry and every sector now from agriculture to life sciences to bio sciences, to everything, is driven by data. And therefore as we look forward, you know, IDC have recently called it that of the 100% of data that will be on the planet in 2025, there’s only 7% of it right now. So that gives you a sense that data is creating data to get out more data. When we talk about some of the positives and the negatives of that, but it’s so important to realize that it is basically the oxygen of the digital universe.
Jason Monks:
Now, I’m really interested that you touched on to the new industrial revolution–it’s not new, it’s here. It’s developing, isn’t it?
Garry Connolly:
Well, it’s just evolving, you know? And that’s the key thing is that I read a lot about industry sectors that are about to embrace digitization. You know, when I think about the last decade, like we’re nearly into the next decade, the last decade, digitization has already happened. And if you’re only learning about it now, you’re probably way behind. And when you consider small things like the largest taxi company in the world doesn’t own a single taxi and it’s called Uber, the largest advertising and marketing company on the planet bar none is Facebook and it doesn’t actually have an agency, the largest retailer that ever was, doesn’t have any shopfronts or very few and that’s Amazon. I mean it goes on and on and on. Airbnb, the largest hotel group in the world, they don’t own any hotels. So when you think about, well what is the common denominator of them? Data, access to data, access to smart devices. But, fundamentally the back is data, analytics of data, distribution of data, always on, always the same quality of service. So that’s the key thing that we should remember. It’s an evolution of our relationship with data. Whereas 20 years ago, you went to interface with data in your office and then you came home. Now people interface with data all the time, from the start to the middle to the end.
Jason Monks:
Excellent. Cause we know a lot of centres–data and centres–they’re global. They’re ever expanding. And it seems like it’s an unstoppable force, but an unstoppable force created by people, their habits, what they do for fun, what to do for work, how things are managed. And Ireland seems to have a really large piece of that sector. Totally disproportionate to the size of Ireland, the size of our population, the size of your GDP – if you look at GDP and just what we were produce in hard goods, not just soft goods. So, what makes Ireland such a great market data centres, both the data to transfer the storage and generation of it, and the centres to accommodate it. Is it the location, the workforce, tax incentives, other factors? What’s your opinion on it, Garry?
Garry Connolly:
I think um, foreign direct investment is complex and data centres are the data and the value is, is this just another form of foreign direct investment for Ireland. Ireland now is sort of in the shadow of a very large Oak tree that was planted 65 years ago when IBM decided to establish its very first, non-North American operation in Dublin. Um, you know, and actually we think we’ve got some challenges around the world for office space. They took the top floor of the Shelbourne Hotel, which was one of the five-star hotels to call their first office home outside of North America.
So as you can imagine, that trust by IBM with Ireland started and that spawned then digital equipment corporation, Nixdorf, Wang. All these companies that are subsequently gone. But they were the Googles, Microsofts, and Amazon of their era. They went away and they were replaced then with the likes of Informix, Oracle, BAND, SuperCar, Lotus, software companies. They morphed then, they were replaced by Gateway 2000, Dell, ASD. And then we went to the cloud. So really what we’re seeing now is the 60 years of continuous trust in Ireland to understand the question. Because the key thing is do you understand the question? And if you understand the question as a person, as an industry, or as a country, then you’re able to actually get an answer and Ireland realized that North American companies, if they wanted to globalize, needed a place to put down roots and, therefore, when IBM put down roots in 1956, it made it much easier. And we’re seeing it today that the guys join IBM, they’ve got great discipline, great skills. Then they say, okay, I’m ready for my next senior position and therefore there are available skills for the next guy, Deck comes in. We’re looking for senior people, you know? And so therefore really what we’re seeing different to some similar markets, Ireland’s status as the largest single group cluster of data centres in Europe is actually just an evolution from when IBM came here 60 years ago.
But more to the point I think, um, as a general umbrella, the real, to me, and it’s really timely because Intel have amassed another four to five billion capital investment into Ireland. Their first investment was exactly 30 years ago. Now when you talk about data centres and you talk about clean rooms and you talk about mission critical, the skills and services that companies, indigenous Irish companies, mechanical, electrical, construction, right the way down to sprinkler systems, we learned 30 years ago when data centres weren’t even an asset class of note. That skills and services were ingrained, health and safety, how to do things, how to proceduralise things, how to actually document and go again. So all of the companies now that I could write down, a lot of the employees, even probably with yourself at Structure Tone, worked on Intel, or worked on Pfizer down in Cork, or worked on other mission critical assets.
When data centres then arrived around 2000, we were ready, ready for action. We understood the question, we understood that, okay floppy disks are going now you’re going to go to the cloud. Just a different way delivering software. But the guys didn’t have to scratch their heads and say, oh I don’t understand how you proceduralise things, I don’t understand what health and safety is. So now you’re starting to see the dividend, both here and with yourselves, where you are now, in yourselves based in Ireland exporting skills. It’s incredible to see that you’re using Ireland as this nexus in this sort of centre of the spoke to export those skills to other geographic locations, Frankfurt, London, Amsterdam. So, effectively Ireland now is, and always has been, an optimal place to rest data. Whether it’s on a floppy disc or even a punch card, for your older listeners, floppy disks, hard disks, or the cloud. So the same way Structure Tone are an evolved company, you now have global trust reputations, not based on what you did last week but probably what you did 50 years ago. And everything evolves, and I think most people are realizing trust is probably the key thing and you only gain trust through time. You don’t get, you earn it.
Jason Monks:
Really giving them the point there. It’s not so much because Ireland attracts data centre companies or vice versa, via the tech. It’s an evolution. And what we see as an evolution on the contracting side here specifically, is the evolution of what we provide as a service. So companies that we started servicing in the early 2000s, dot-com, at the time, I think STO had 10 to 12 offices in Europe. We were building data centres when people didn’t realize they needed a data centre. But they wanted one, so we built it. Whether it was for a financial house, our Yahoo back in the day, or any of the other ones. But, what we really see as the evolution now on the construction side, it’s not just what we’re doing here in Ireland, but what a lot of companies–a lot of our competitors, our peers, our clients our subcontractors, and you alluded to earlier, specialist mechanical/electrical companies, the specialist logistics companies, the sprinklers, the fire alarm guys who started off doing Intel work, then into the dot-com–they are now one of the most sought after trades in mainland Europe. It’s Irish contractors, are leading the way. And it’s great, it’s an evolution of where the contracting has gone from Intel onto the data centres. It’s we’ve been doing this, we want to do it, we want to improve our process. We want to bring that service that we’ve done for you in Ireland all across Europe.
Garry Connolly:
I’m getting back to your initial question, you know, is it tax, is it this or the other. Foreign direct investment is a really difficult thing to put a finger on, but my sense is after working in it for 30-odd years now is it’s relationships. But I mean that’s no surprise to anybody is that relationships are everything in sport, in business. You know, you see this in Europe in particular in Britain now you’ve got all these soccer coaches that go, but when a soccer coach comes in, he doesn’t just come on his own. He brings in a whole team that trust him and all the rest. And that’s the same now that we’re starting to see not just US companies looking at Europe or looking at APAC companies that are coming in, whether they’re going to host data in Ireland or not, they’re looking at Irish contractors to navigate them through the geography of Europe. Which to me and my age, is something that I am so proud of our Ireland on because our generation, and you’re much younger than I but, our generation, you have one option and that was a boat or a plane to go when you graduate. Now you can do that. You can learn but you can come back and work, or you can stay here and actually you have an option. Whether you want to or not, the option is there now or with some of the companies you’ve mentioned, you can double dip. You could be working for an Irish company located in Europe. Repatriating in those sorts of forms. We’ve always been ridiculed for this platform, for a lot of external companies using Ireland as a base to repatriate. Now we’re doing that.
Jason Monks:
That’ll lead us on to something I want to talk about, which is Host in Ireland. As an outsider to the industry, you look at Irish data centres, Host in Ireland is one of the most predominant platforms you’re going to see out there for putting up the message of what Host in Ireland can do, what the data industry can do. But one thing you said earlier when we were having our chat offline was, it’s competition. It’s cooperation. What Host in Ireland seems to have done, and it’s very evident from all of the social media platforms, you’ve brought together people that you would not normally expect to be sitting around in the circle, exchanging ideas, having a free expression on the challenges that they’re having. So why did you start Host in Ireland and how has it evolved into what it is now?
Garry Connolly:
It’s a great question because it was a bet. It was an actual bet because I was on an iron out at the time and I couldn’t work in the industry, so I had to work on it. And so, I called a few friends, who happened to be the head of Savvy City in Ireland, the head of Sun Guard in Ireland, the head of Digital Reality, the head of Via-Tele, who are data centre or transit or telecoms companies. I effectively said what I truly believed. I think that governments as an institution should support industry, not the other way around. I think because they’re in the industry, all governments and anybody else are on the industry. And I thought that maybe if we could get those competitors to not look at each other when they came to sit around a table as competitors, co-opetition people. There’s an opportunity here at money levels to have a constant common voice.
I used actually at the time, Tony O’Reilly, who was a very famous Irish rugby player who had just been appointed in 1971 as the first CEO of Bord Bia. And up to that point with common agricultural policy in Europe, you had Irish butter being sold at the same price as all other butters, whether it was from Greece, whether it was from Spain, whether it was–and nothing disingenuous to any of those, but I believe from those that are in agriculture, Irish butter is actually is a bit better. What he did was he said, this is nuts. We’ve got to sell a load of it to the common agricultural policy with restrictions, but let’s hold a little bit back, put a gold bar on it, call it “Kerry Gold,” and the tagline should be: Kerry Gold, Irish butter, the best butter in the world. And as a result of that, him declaring clearly a message, every single dairy creamery in Ireland was suddenly lifted up by just the association with this small gold bar. What I wanted to do was to say to people, if you’re sort of beating each other up on a dairy level, in that comparison, you’re not really differentiating yourself from others. So I wanted the guys just to come together and say, Host in Ireland. That’s really clear. Find common ground, that you’re not beating each other up by your features and benefits and then clearly communicate that all of you in a clear message. Because if I’m buying an Audi car and four dealerships are telling me four different things about the same car, I probably don’t buy a BMW cause you lost trust with the brand. So we just basically got the guys to trust that if we had our whole philosophy was going to be, Why would you rest data in Ireland? We didn’t even talk about the centres because the centres are the how you host. They’re not the why you host. So, if you can get somebody to believe that data should be sitting in Ireland, then whether you have a big centre, a small centre, or blue or green or yellow one, by the brands, it’s secondary. So you buy into the fact that it’s because of policies, pedigree, people, power, and pipes, the Five P’s. And that was basically the five P message that all these guys went out to say and suddenly you had people say, okay, I get the Ireland thing, now who’s there that I could use? And it’s Morris, Tanya, etc., etc.
So it was all based on, on the premise that they had to leave their ego and their own balance sheet at the door. And it’s still that way. And through that, what happens is competitors sat down in a room and having stones and coffee. Ready to learn, and realized that they bleed all of them, they get colds all of them, they all have kids, they’re human. And suddenly now, you’ve got a group of people who are actually don’t even see each other as competitors. And Host in Ireland as a platform now has changed so significantly from just bring your data to Ireland to also look at the quality of the Irish contractors that’ll export. So, it’s built to a community of companies that host data, design, build, operate centres. And now what we’re bringing in, and I guess you always know the master classes here for the long run, is the professional services companies are coming in. The legal and the fiscal. So it’s now a community, not just those original five. And, and I think also it’s a, I think you might’ve alluded to, we’d like to, we now rather than me, we’d like to build a relationship with a person, irrespective of your brand you’re representing. If we really like the person and they get ethos and they get the whole thing of the more we promote and help each other or pat each other on the back, the more we can grow can grow. And even if you get 2% of a very large market, it’s better than 100% of a very small one. That’s the key ingredient. And often we joked earlier, often you have people that have a 15-month probation period to come in to Host in Irelandbut no, it not about that. It’s about the people and then it’s about the brands. Um, and it’s about community and an ecosystem or important data and exporting skills and services like yourselves. Um, your partner here in Ireland but I would see Host in Irelandacting as a platform for you also and the other partners, your peers, to be other countries and people from countries through the platform which is Host in Ireland.
Jason Monks:
Absolutely. You can see Host as a platform that will help Structure Tone by cooperating in competition with some of the guys that have been there with you for years, guys that we respect and do a great job. Well, the strength of the brand of Host in Ireland. If you look at that one there, and I know you’ve given me a little grimace on it. You can use that for greater good, particularly in the data centre market, whether it’s design, operating, even the construction elements of it. One interesting drive that host is involved in is the biodiversity, ecology. When you guys are given out there is a message, whether it’s planting saplings up in the Dublin mountains in the depths of winter, but the bees is a really interesting one because without bees you probably wouldn’t be sitting around this table.
Garry Connolly:
Yeah. Well isn’t it interesting where you get these ideas and how you’re setting your mind to be open to be taught by 10-year-olds or 12-year-olds, and they’re my children. I have a 10-year-old and a 16-year-old and within three months of each other one of them came back and cited the Barack Obama statement. That was a, we’re the first generation to know all the facts about how bad the planet’s going, and the last generation to be able to make any meaningful change to it. And that was a staggering lot of words. And then my other child came home one day and as she just told me, do you know that that 38% of all the bees in Ireland face extinction for 2050. And that was really more tangible. And then you think, well what’s that? What’s that an indication of? Well, that’s actually – the bees are just an outward looking of our biodiversity. Biodiversity is really just how planet Earth is breathing in and all the rest. So that was the actual driver, my children. Then we looked at the great community we had, that actually the community was saying to us, we need to have more purpose. You know, what should we be doing? What else can we do? We realized that we were just enthusiastic amateurs. You need to wrap yourself around people that know what they’re doing. So then we went to the National Biodiversity Centre. We built on this idea of well what are your challenges? You know, understanding the question, what are your challenges? And they said, messaging, and we’re messaging platform. Getting it more out there that these lads are responsible for 70% of our food sources, national pollination, etc.
So, working with them, we have a launching this year with yourself and the other partners, we’re actually going to launch a data centre-specific pollinator plant. So it would be for the data centre industry and all sectors of the industry, whether you’ve got 40 acres of the campus and you want to leave 20 acres of land and wildflower or you have an office in town and you want a bee hotel, it’ll be a 1-0-1, one book for the data centre industry and already, because we’re concerned with it, other industries now say, Oh, we’d like a piece of that, it can’t be so difficult. So you just act as this catalyst to actually be more mindful of it. And, and in our own little way, I guess we’re trying to help Ireland and by inclination then we carry the message to the places that, that if we all plant one tree, we all don’t cut our grass twice a week, maybe every three weeks. But there are consequences of those actions. So yeah, that was that was easiest for bees and, and uh, it was bloody awful up mountain though when we were planting the trees. It was the most rainy day in Ireland in about seven years. And uh, but it was memorable and again, about the people and there were “mighty with a shovel” is what they say in Ireland.
Jason Monks:
It’s an interesting part that I think I’ll just jumped in on. I think it’s really the DC designers, the professional services that are there, whether it’s the environment impact guys, transport guys. With the pressure’s that are being put on and have been put on data centres, because of the green credential, it seems that if you’re a designer or a builder or an operator on the data centre, you’d be forced down this road for a while. So it’s been embraced early days and it’s evolving. You can see a bunch of the projects we’re doing now, we’re putting in natural wetlands as part of a data centre.
Garry Connolly:
Yeah. It’s wonderful.
Jason Monks:
Our biggest challenges is, how do you make it national because it has to be man-made. It sounds contradictory, but the benefits is it will bring out another seven acres of what previously wasn’t there, natural wetlands, 100 years ago was on the natural watercourses running through it or a green wall that’s 20 meters tall and 60 meters wide.
Garry Connolly:
Because I think the world is full of advocacy and awareness now, because we need to move individually, collectively, sector, into action in whatever capacity that is. And, and you know you probably have your own sayings for it, but if you want to get something done, ask people that are busy and you’ll get it done. And the data centre industry right now is running at such a clip that if you want ideas, ask them.
Jason Monks:
Well alongside that, hope to see our biggest challenges facing the data centre industry over the next five to ten years – what do you see as the main challenges there?
Garry Connolly:
Well when I look at and listen to people like yourselves, and you look at the run-rate, and we also, as we said in this call earlier, 7% of data now versus 100% in 2025. Just the amount of delivery that has to be executed to the same standard that unless the industry moves more towards potentially sort of like a hotel industry where there’s a lot of prefab and there’s a lot of that type of stuff. It could be just the pure nature of manpower, the amount of man and women that are available to deliver the capacity that’s required. And I think that the, there is a duty of care also on the four to five companies that are driving about 80%, which are the data companies and I think they have a huge duty to both the industry and the planet to not squeeze out every last cent of profit for the efficiency of getting it done.
There has to be a sense of we are together as a community to deliver this run rate, but there seems to be from some sources saying they want what they got last year, but they want it quicker and they want it cheaper. Something will break. That’s a real risk. Whether it’s the data centre industry or whether it’s any industry, something generally breaks. So I think that will happen. And how will that happen? What we’re starting to see a lot of people moving across from the data centre data people and moving into the sub supply and then eventually we’ll find a common ground where what’s possible and what’s real within the budget and the timeline becomes the normal. But there will be challenges. But you know, again, as your listeners will know, challenges of success, at least have a positive outcome. Challenges of failure, i.e., the economy is going the other way, is all the same challenges and work around, but you just have a bad result. It’s like starting a football match going in 3-nil down, and it’s already 6-nil by the time you start. And you got to put through the 90 minutes. Of course that’s very sour, whatever it is in American football, four hours and 28 minutes I guess with two minutes of play. But there are challenges though, but there’s always challenges – we always see in industries where there’s crisis, we get through them. Industry finds a way.
Jason Monks:
With your engagement with the owners, what sort of trends are you seeing from particularly the US and Asia and to develop data centres in Ireland? Is it, the edge, we know about the box, hyper-scale, we know about getting bigger. But what do you see as the future of this?
Garry Connolly:
I guess like we started earlier and to me the data is the “why” and the centre is the “how.” So if you look at the trends in data, to me it’s like a Russian doll. You think of your Russian doll, a huge Russian dolls and then they feed into each other and into each other and into each other. And we’re finally entering – this decade, we’ll see it – where we have fit for purpose compute, what does that mean? We’re going to now have such a variety of options that the size and scale of the centre and the compute power of the storage will fit the application. So when we see the trends, and you don’t have to believe me, but when a child from Kurdistan wins $3.2M in Fortnite for the world championship versus Tiger Woods who wins $2.9M for the open. You know there’s a change taking place. So gaming, holograms, last mile at the edge, that stuff is quite intensive. So you’re going to see like you do at the moment, um, for your telecoms BNs and ANs and NBCs though jurisdiction and that’ll be fit for purpose. That’ll be optimal to whatever happens at that time.
You’ll have a 5G tenant into it because all has to work. There’s no point in having a box at the end of the antenna if it can’t capture the data. So 5G, just bigger bandwidth will draw edge, but it will be feeding into a municipality centre which will feed into a country centre, which will feed into a continent centre, which will subsequently feed then into bigger hyper scales. So it really is in your mind I often think is, if you think of the Russian doll, one’s feeding into the other and into the other and into the other. And so what I’m seeing is that word “fit for purpose.” We’ve got computed storage with 5G, I guess that’s the last piece. But there’s loads of hype cycles. I even heard yesterday, cloud computing was then fog computing and now we have mist computing. It’s probably just the same name for something else, but it’s marketing speak. And so I think fit for purpose is coming along the lines. They’ll only be more data and people are becoming more optimum with their data. I think big data is a term you hear everywhere. I think big companies are going to go with the little data. That’s hold only the amount of data we optimally need to, and that’s being driven by GDPR, data privacy, data protection, all that type of stuff. People are more mindful now – organizations – that they have that they have a duty of care to the citizens on two things: their environmental relationship, and their data relationship. And that’s what GDPR done is made those companies more accountable, and because of that you see that with your now that non-core data and then video – the video is just the biggie. All phones have video, AR, VR.
And we’re going to see more centres, small ones, medium, large ones, gigantic ones and we’re going to see them in locations that are fit for their purpose. And what’s the purpose? Whatever application they’re trying to service. But, the one thing is sure is that data is the oxygen of the industrial revolution. Bar that, zero. More data, more centres, more centres by size and scale. Ireland’s relationship with that? I think Ireland has a very solid relationship with data going forward. We’re a Tier 1 location. Therefore, when you consider that there are only maybe 10 other Tier 1 locations in the world, um, and we’re exporting all these skills, one will balance the other. We’ve been out of power for forever and we still keep going. But I’m sitting here with three Irish guys who are exporting their skills, New York, Dublin, and everywhere else. I think that’s what makes me proud to be in an industry, a part of an industry that is exporting skills and services rather than just exporting people.
Jason Monks:
Excellent.