From first generation to hyperscale: the evolution of data centres

UK Property Forums partner Vail Williams, explores the whirlwind evolution of data centres from how they started and how they are evolving, to what the future holds for this fast-evolving sub-sector of the industrial property market.

The world’s first data centre can be traced back to 1940s America, when the innovative programmable computer – the Electronic Numerical Integrator and Computer (ENIAC) – was developed.

With this new technology came a requirement to house it in what was soon to become known as the data centre. From the first intelligence-led data centres, it wasn’t long before rapid innovation in computing technology by IT innovators such as IBM, saw the arrival of personal computing in the 1980s.

A new technological era had been born and with it came an increasing requirement to house more and more data – a thirst for data which has increased exponentially in recent years.

David Barden, regional managing partner for Vail Williams in the Thames Valley region, where much of the UK’s data centre supply resides, explains: “Everything we do today, every interaction we have, everything we watch, involves a breathtaking amount of data which has to be stored somewhere.

“In the UK, this is predominantly in the South East – specifically in Docklands, West London and the Thames Valley – which is where some of the very first generation data centres evolved. But truth be told, data centres haven’t always been so unique. From my first instruction on a single-storey data centre in Slough to the hyperscales we see today, a lot has changed.”

According to David, to begin with, data centres were primitive buildings which, for the most part, didn’t have windows but did possess large vents and fans to cool the various components and wires needed to generate data.

“Data centres started out much like any other industrial asset but, today, have completely evolved at a tremendous pace – from the assets themselves, to the leasing models that the landlords deploy.”

First generation: single-storey data centres

Many of the first-generation data centres were relatively small by today’s standards and converted for use.

Aside from the security that surrounded them, there wasn’t initially a great deal to differentiate them from existing industrial stock, in terms of specification. They had the advantage of location, power and connectivity, which remains a key determinant for the market.

Whilst they had double-gated entrances and security cameras around their environs, specification-wise, there was nothing particularly different about them – the key was that they met the criteria for data storage and were accessible.

Back then, they varied in size but were industrial buildings which had been repurposed for data centre usage.

Second generation: double-stacked data centres

Then came the second generation of data centres which were largely purpose-built mid-big box warehouses, with an operator already lined up.

These buildings were generally eight – 12m high, portal frame cladded warehouses with mezzanines to allow double-stacking of data halls. Again, the main differentiator was the fact that these were high security buildings, with low activity around them.

What made them different was the availability of multiple power and connectivity sources, as well as the fact that they were generally low risk sites. This remains a key determinant of a data centre today.

Third generation: hyperscalers

As demand for data centres has exploded, we have seen the development of the hyperscale data centre which is a multi-storey purpose-built unique product in the commercial property market.

The hyperscale data centre is a business-critical facility designed to efficiently support robust, scalable applications. They are often associated with big data-producing companies such as IBM, Google and Amazon.

Describing the differences between hyperscale data centres and their predecessors, David says: “These buildings provide a much higher density of data storage across a high site cover for maximum use of space, which can span from 100,000 sq ft-plus over multiple floors. And whilst the specification of the buildings has changed, what the landlord needs to provide for the occupier has not.

“Developers and landlords are essentially providing occupiers with a base shell, and it is the operator who brings the power and connectivity to the site. If a landlord wants to build for data centre use today, they have to ensure that the necessary power is available.

Next generation: what does the future hold?

With the needs of occupiers evolving so rapidly, to date, data centre design has evolved quickly, without any great consistency.

As artificial intelligence (AI), the Internet of Things (IoT) and data requirements explode, now is the time to plan the next generation data centre to ensure we are on the supply front foot.

But what can we learn from third generation design and potential occupier needs in the future? What does ‘good’ look like for the next generation of data centre?

Philanthropic data centres

“Data centres have come a long way from their war-time roots, built essentially to protect and benefit our communities through intelligence gathering. It would seem fitting, therefore, if the next generation of data centre does the same, perhaps through more of a focus on sustainable design,” added David.

So, could we see more philanthropic data centres which feed into the local communities that surround them?

In some areas, this is already happening, including in West London where The Department of Energy’s Green Heat Network Fund (GHNF) has funded the Old Oak and Park Royal Development Corporation (OPDC), enabling them to harness waste heat to heat some 10,000 homes.

In Lincolnshire, a planning application has just gone in to North Lincolnshire Council for the development of a £3 billion data centre at Humber Tech Park in Lincolnshire. The 278,000 sq m data centre campus could capture waste heat for potential use in a similar district heating system.

Meanwhile, in a first for Google, the internet giant has just announced (in May) that it plans to grapple with the environmental impact of its AI ambitions by reusing heat from an expanding data centre in Finland to warm nearby homes, schools and public buildings.

David concluded: “Whatever the next generation of data centre delivers, we will continue to see its whirlwind evolution sweep the UK. The challenge for landlords will be keeping up with demand through sufficient and sustainable supply.”

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