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Podcast: Mission Critical in the Age of Social Distancing - Structure Tone
When the world transitioned to working, learning, and socializing from home in the blink of an eye, how did the internet—and its critical infrastructure—keep up? On this episode, we talk to Terence Deneny, VP of STO Mission Critical, about how internet providers, telecommunication firms, and social networking companies have handled the influx of traffic and how he thinks the pandemic will affect the future of mission critical real estate and construction.
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Podcast: Mission Critical in the Age of Social Distancing

When the world transitioned to working, learning, and socializing from home in the blink of an eye, how did the internet—and its critical infrastructure—keep up? On this episode, we talk to Terence Deneny, VP of STO Mission Critical, about how internet providers, telecommunication firms, and social networking companies have handled the influx of traffic and how he thinks the pandemic will affect the future of mission critical real estate and construction.

Narrator:
From mass shutdowns to job site safety concerns, the global pandemic has transformed construction as we know it. As the AEC community continues to navigate this unprecedented situation, we’re sitting down with construction leaders from around the globe to hear how they’re responding to these evolving circumstances. Welcome to STO Building Conversations and episode three of the COVID-19 series.

Alison Smith:
So, I’m here today virtually with Terence Deneny, who is one of the leaders of the STO Mission Critical division. And obviously mission critical has been a pretty important sector or area of business during this global pandemic. So, we wanted to hear from you, Terence, on how this has been affecting the mission critical sector and vice versa, how their work affects how our world has responded.

Terence Deneny:
Very good.

Alison Smith:
So, let’s start with just defining what we mean by mission critical. How do you describe this sector that you work with?

Terence Deneny:
So, the STO Mission Critical sector is part of the STO Building Group that deals with our clients’ critical facilities, in terms of the construction, engineering, and commissioning of those types of buildings. Uh, we’ve worked with our clients for over 35 years in the design, engineering, construction, and commissioning of them. So, a mission critical system is really defined as essential to the survival of a business or an enterprise. If the facility goes down or fails to operate at the proper time, it provides a significant impact to the overall business. So, although critical facilities take many forms in terms of facility types, the type that we traditionally work on here is data centers.

Alison Smith:
Okay. That’s a good transition to my next question, which is, um, as everybody transitioned to doing pretty much everything from home, you know, working, learning, having Zoom happy hours, in just a very short, condensed amount of time, was there a concern that those data centers wouldn’t be able to keep up with that spike in traffic?

Terence Deneny:
Uh, initially there was so as the whole global pandemic kind of worked its way from Asia into Europe, here in the US, a lot of network providers, content delivery networks, uh, telecom providers globally, all went on high alert in terms of looking at the networks to make sure that they were performing in the ways that they were supposed to. The one good thing about the way the network infrastructure and the way data centers are designed globally, they’re designed to be very elastic. So, if you think about, you know, think about a prime day or cyber Monday, where users go up—phone calls on Mother’s Day on the Verizon network, right? You go to peak. So, you design the networks, you design the infrastructure to handle the peaks. Uh, what this pandemic has kind of provided us is you’re running at peak now, which usually is a day or two at most. Now you’re running at peak for months. So, although there was a few outages that were dealt with pretty quickly, in most instances, on a global basis, overall, the internet and overall global networks and telecommunication networks held up well and continue to do so today.

Alison Smith:
Yeah. Cause it’s like a five, six-month peak, right?

Terence Deneny:
As an example of that, you know, you think about Microsoft Teams and how the world has changed, right? We’ve all been confined to our homes working from home, but we still strive for that human contact face to face, right? Microsoft Teams had about 22 million active users a day prior to COVID. They almost immediately went to 44 million users a day. And as of a couple of weeks ago, it was reported they were up to 77 million users per day. So, you think about the network capacity that takes to grow and the amount of infrastructure that needed to be put in place. The one good thing about that is the networks and the data centers are elastic, so it allowed Microsoft to be able to deploy a lot of servers, a lot of infrastructure into a lot of existing data centers globally and be able to manage that. And you saw that happen for companies like Zoom, for GoToMeeting, for WebEx, for all the various communication tools that people use on a daily basis to make sure that we’re connecting with their loved ones, as well as their colleagues and continue to have meetings and transact business on a, on a global basis.

Alison Smith:
So, is that related to then how companies like Amazon and Netflix decreased some of their bandwidth to be able to open it up for the rest of the world?

Terence Deneny:
Correct. So, you’ll look at the way you prioritize traffic inside of a network, right? So, you know, I was on a number of Zoom calls and a number of Microsoft Teams calls where people turned off their cameras in order to save bandwidth at home. Cause the video is a bandwidth hog, right? So, you think about you’re going from 22 million users daily to 77 million users. You’ve got to prioritize that traffic somehow. So typically, what you do is you reduce the bit rates in terms of the amount of data going back and forth. And that’s all encompassed in terms of network management and was what all the various content providers, telecommunication companies, and networking companies did to make sure the internet and the overall global telecommunication networks continue to operate throughout the whole COVID pandemic.

Alison Smith:
So, from your perspective, as a consumer, you know, someone who knows about the construction and real estate needs of mission critical, have there been concerns related to that in the ability to keep up with this kind of demand overall?

Terence Deneny:
Um, as I said, you know, the global data center market has been growing at an exponential basis. Uh, compounded annual growth is probably growing at 20 to 25% year over year. So, it’s a tremendous, um, industry at this point. Um, there’s been a tremendous amount of investment into the data center market over the last 20 plus years. So, the buildings are there. Uh, the infrastructure is there, but it is continuing to grow on a daily basis. So, in order to keep up with it, um, you know, the planning cycles along terms of designing a facility, planning it, building it, commissioning it and, and putting it into operations. You’re looking at 12 to 14, maybe 15 months. So, it’s a long planning cycle. So, as our clients, whether they’re co-location clients or enterprise clients, or some of the cloud providers, they’re always planning for growth at this point. Um, you know, no one could have expected how the work from home and the workforce going mobile could have clicked overnight, right? That trend has been going on for a number of years now in terms of working remotely, but it transitioned in about a week’s time, which, you know, put a tremendous burden in terms of a lot of infrastructure and a lot of how things get done.

Alison Smith:
So, are you seeing then a whole new demand for more or bigger or expanded facilities?

Terence Deneny:
I think the way the growth cycles are going in terms of network capacity, um, you know, I believe the numbers out there in the last two years, we created more data as the human race than we had created ever before, right? So, the amount of data, if you think about the human interaction and the data that we create human to human, you put the internet of things and machine learning, and artificial intelligence into that mix—it’s exponentially growing. So, network providers, content delivery providers, cloud providers have all been growing in order to accommodate the data usage that’s going on in the world today. So, this is kind of a little blip on the overall timeline

Alison Smith:
And was construction for those projects that were happening before the pandemic, was construction allowed to continue on those throughout

Terence Deneny:
most of all, the data center projects that we’re doing on a global basis with very limited exception was deemed essential and did continue throughout the whole pandemic. So, there wasn’t a lot of impact there, you know, a lot of the providers or the data centers is what keeps the global communication networks running. So, they were all deemed essential as well. So overall the data center industry and the telecommunication industry kept on working throughout both the global events,

Alison Smith:
How did all of the, um, associated requirements and impacts of COVID-19 impact the work you guys have been doing? Like, you know, additional safety measures or supply chain delays and things like that. Did that have an effect on the progress you were able to make?

Terence Deneny:
Data centers by their very nature are typically very large buildings, very large, uh, campuses, but ultimately the work comes down to, you know, working in cabinets and working in very, very confined spaces in terms of power and cooling and IT infrastructure. So yes, the CDC social distancing and guidelines have impacted the way we’re delivering business. You know, we’ve had to come up with some innovative solutions on various projects in order to have the construction personnel and the tradespeople working in these spaces. So, there was an impact there. Uh, we have gone to shift work on some projects in terms of being able to deliver the product and maintain the, uh, schedule for delivery at this point. So, supply chains have been impacted globally as you know, a lot of the component level stuff. So, the chips and the, uh, I’ll say the smarts parts of the gear and of the infrastructure that we use are manufactured in Asian markets. So there was an impact there, we have worked diligently with a lot with all of our suppliers, as well as all of our clients to identify what those issues were. We instituted daily, biweekly, weekly calls with various manufacturers and manufacturers reps in the US and in Europe to make sure we’re tracking timelines and delivery.

Alison Smith:
That was sort of my assumption that a lot of the sort of tech side was probably coming from Asia. So when this started kind of making its way to our understanding in like January, February, you know, when we were seeing it happening in China, you know, did your kind of radar go up right then that this is something to look at?

Terence Deneny:
Uh, our radar kind of did at that point. As you said, there’s a lot of manufacturing of the smarts, part of all this gear that goes on in the Asian market. So, we definitely were aware early, uh, we kind of started tracking it early. Um, as you know, there wasn’t a lot of information coming out of the Asian markets at that point. There were some shutdowns going on, which made communications very hard, but through manufacturers, representatives here, and manufacturers in the US and in Europe, we did the best we could to kind of pull together the information. The good part of this whole story was very limited impact to our overall clients. One or two schedules got a little bit of adjustment, but overall the data center sector and all of our mission critical work pretty much stayed on schedule.

Alison Smith:
Okay, good. Um, well, given all of that, do you think, um, that this whole situation in the pandemic has made any of your clients sort of reevaluate their data strategy and how they handle it?

Terence Deneny:
Definitely. I mean, if you think about every business, every enterprise client in the world, every client in the world has all of a sudden been forced to look at, you know, what is the impact of having a mobile workforce? Um, so from that standpoint, I think every one of our clients is kind of looking at what does it take to have the majority of your workforce be mobile, uh, what infrastructure needs to be put in place to manage that, um, in terms of physical infrastructure devices, uh, you know, the first week I was working at home, I had my laptop. Usually in the office. I have my two or three screens. I have my laptop, I have a iPad sitting at my desk and all of a sudden, I go, how do I manage this on a daily basis working on one small little screen, but then you think about all the connectivity options in terms of managing VPNs and how do you connect in. So as well as the infrastructure piece of it and putting the hardware on people’s home desks, think about all the management and it support that had to go into managing that process and supporting millions of people that now no longer could just walk over to their IT help desks and get help, or, you know, call their IT help desk at the office. And you could, you know, connect in. Now, you’re sitting there with a whole bunch of employees working from home, hopefully working on, uh, or are working on laptops, but what are the peripherals that are attached to it? So, your home printers, your home WIFI networks, your home cameras, why are they not connecting, right? So, there’s a lot of support and management that went into managing all of that process as well.

Alison Smith:
Yeah. Not to mention the whole like security IT, you know, avenue that you could go to.

Terence Deneny:
Yeah. Right. We try and we try very hard to manage applications and security on everything IT related. And now we’re all a little bit smarter and we’re all managing that. And hopefully this never happens again, but if it does, there’s a definite playbook kind of in place for it.

Alison Smith:
Right. So, given all of this too, do you think any of this situation has sort of changed the trends that you were seeing in data center, design and construction? Will it change that trajectory they were on?

Terence Deneny:
Well, I think one of the trends that we’ve been monitoring on the mission critical side here is 5G and the edge, getting to the edge, right? So, when they say getting to the edge is as everybody still, everyone is now today using smart phones, right. And smart phones are getting faster as 5G rolls out, they’re going to be getting multiple times faster. So, the content delivery in terms of cell phones and mobile electronics is, is driving providers to say, how do you deliver massive amount of content to a handheld device versus to a corporate network or to a centralized workplace? I think the whole mobile work from home aspect of the global pandemic kind of define some of what 5G and the edge is gonna look like in the future. So, you know, uh, Verizon handled almost 600 million calls a day, right? Daily calls. That’s a peak of what Verizon handles on Mother’s Day, but they were doing that over the course of two or three months. So typically, you build infrastructure to provide population centers, a lot of connectivity when you spread that population center out. Uh, and although, as I said, in the beginning of the podcast, the networks held up well, but I think it really defined and put together a playbook and put potential strategy of how do you deploy network assets to the edge.

Alison Smith:
Yeah, that makes sense. And I think, like you said, no one wants this to ever happen again, but there were so many lessons learned, and I think it’s incredible how well it held up. I mean, like my little experience as a user of someone working from home and someone with kids schooling from home, really no issues. And that’s crazy.

Terence Deneny:
Correct. Correct. So everybody, you know, I think that’s, that’s one of the good things that came out of this is that no one could have predicted a mobile workforce and mobile education and everything would, would actually spin up and spin up so, so fast. And there were a few little glitches, but by and large, most schools, most businesses, most industries adapted fairly well.

Alison Smith:
Yeah. And I was just thinking, like, I can’t imagine what we would have done previous to this whole internet era. You know, if this had happened, the economy’s hurting as it is. Imagine if we didn’t have this, it would just be shut down. Correct. It just drives home the critical part I think of mission critical is. It is, it truly is.

Terence Deneny:
It is. It definitely is.

Alison Smith:
So how are you seeing work, um, I mean, basically, are you just continuing to work on the projects that you guys were working on or now that the world’s opening back up or things kind of speeding up?

Terence Deneny:
Um, as I said, I think the overall data center, IT infrastructure marketplace is continuing to grow the overall impacts from the recent events and the economic fallout from those events. So far knock on wood. Hasn’t really impacted the industry. Uh, we’re continuing to see a number of opportunities in the marketplace. Co-location firms, cloud providers, uh, even some of our enterprise clients are continuing to move forward. Data’s not stopping, right? So, the collection of data and the production of data is definitely not stopping. Uh, if you think about the pen, DEMEC the Amazon primes and the Netflix and the Grubhubs of the world, all the capacity that they had to put in their networks just to support the mobile workforce and the people working from home, it’s kind of driven that whole demand. Uh, I think the outlook for the mission critical sector remains pretty good at this point. So hopefully that continues over the next number of quarters. But as I said, the planning cycle for large infrastructure to support these networks is a 12 to 15-month planning cycle. So, you know, you’re always looking out and number of months in the future.

Alison Smith:
Yeah. Better gear up.

Terence Deneny:
We are. We’re trying.

Alison Smith:
Okay. Well, thanks. A bunch of, I think that was, um, I’d been wondering how this, you know, how this was affecting mission critical. Cause like we said, it truly is critical, and you think, you forget as just the day to day user that, you know, there’s a lot of work that goes into making us be able to have this virtual recording.

Terence Deneny:
Yes, there is.

Alison Smith:
All right. Thanks Terrence.

Terence Deneny:
You’re welcome. Alison, have a, have a wonderful day.

Alison Smith:
You too.

Narrator:
Thanks for listening. For more episodes like this, you can find STO Building Conversations on Spotify, Apple Podcasts, and the Structure Tone website.