The Real Risk
Data center developers are entering a danger zone where the biggest risks aren’t inside the walls – they’re outside them. Global real estate titan JLL previously predicted “edge IT infrastructure and data centers will become a $317 billion market globally by 2026, representing a 107% growth from 2020”. Many industry experts believe that the actual 2025 data will greatly exceed this initial estimate. As the market demands for data centers continue to drive these high delivery expectations, new complex challenges have emerged. But the most disruptive threats aren’t cyber-attacks, they are a shortage of power, land, and specialized talent. These constraints not only threaten the pace of expansion, but also the quality, reliability, and sustainability of data center operations across the globe.
Resource Scarcity: A Growing Threat
Data centers require vast tracts of land, both operationally and for the immense infrastructure required to support them. From cooling systems, substations, and access roads – data centers are resource intensive and communities across the globe are beginning to push back. The European data center hub of had previously issued moratoriums on data center permits due to energy consumption concerns, Dublin set restrictions on new data center developments in order to address power grid constraints and environmental concerns. Even in Virginia, one of the largest data center hubs in the United States, counties are beginning to deny building permits for large scale data center campuses due to concerns over noise, water consumption, and the high cost of power impacting its adjacent communities.
While many potential locations may have the land, the cost to develop and the time it takes to work through these constraints is creating a level of scarcity impacting the total costs to the project and the time to bring these data centers to market. These impacts include:
- Increased Costs: As available and resource cable sites become harder to find, prices spiral upward, raising construction and operational expenses. This increases financial risk for the developers and the clients, making some projects not viable.
- Compromised Locations: Operators may be forced to settle for less than optimum locations that are further from network accessibility, power resources, or major population centers. Thus, impacting potential operational reliability and resilience.
- Challenges to Sustainability: Land scarcity can push data centers into ecologically sensitive areas (increasing environmental risks and public opposition) and impacts the availability of human capital to properly deliver the project.
- Schedule Compression: As the schedules compress for land acquisition, so does the compression of schedules for final delivery. This can impact project quality, costs, and ultimate delivery.
This threat of a constrained resource market continues to raise the risks to all stakeholders relative to costs, innovation and accessibility. The prior risk assessment process which focused on very specific security threats and vulnerabilities post land acquisition are yielding to business risk assessments designed to identify these areas of resource constraint.
The Human Resource Risk
Designing, building, and delivering a data center is a fast paced and complex undertaking that requires a diverse array of skilled professionals, including engineers, architects, IT specialists, and security experts (cyber, electronic, and operational personnel) to bring a project to past commissioning to owner handoff. The rapid pace of global growth in this sector has outstripped the ability of the labor market to supply experienced and specialized workers to meet the needs of today’s data centers.
The shortage of experienced talent poses extensive risks:
- Quality and Reliability: Tightened schedules and Inexperienced staff may bypass critical details, leading to design flaws, operational inefficiencies, or increased risk of downtime. Data centers require strict uptime and resilience requirements and a lack of expertise can potentially impact these results.
- Project Delays: Talent scarcity can create delays during every phase of a project —from initial design, to permitting, through construction, commissioning, and day one operations. These risks directly result in contractual penalties, lost revenue and reputational damage.
- Security Risks: Data centers are prime targets for potential attacks – physical, operational, and cyber. Experienced security professionals are essential to safeguard sensitive data and infrastructure as well as daily operations where security staffing can lead to gaps in proper risk oversight. Talent shortages leave organizations vulnerable to breaches and compliance failures.
- Increased Operating Costs: When access to experienced staff is in short supply whether it is on the design, delivery, or operational side of the project – the risks to investors and clients can be significant.
The difficulty in finding experienced talent is only exacerbated by the near daily evolution of technologies such as liquid cooling, power management, and network design. Thus, requiring cutting-edge expertise that may not exist – at least not to the scale to meet the demand. The sector’s ability to attract and retain top talent will determine its resilience in the face of these risks.
The Compounding Impact
Resource scarcity and experienced labor shortages do not exist in isolation—they are interconnected and often compound each other’s impact. For example, building on less-than-ideal land may require more complex engineering solutions, which in turn demand workers with advanced skills. Delays in finding suitable land can push projects into a competitive labor market with compressed schedules, inflating project risks even further.
Furthermore, the competitive scramble for both land and talent is driving unique economic environments with both consolidation risk-averse organizations and risk-opportunist speculators looking to take advantage of the gaps in this sector.
What To Do Moving Forward
The risks of land scarcity, resource constraints, and talent shortages are now central concerns for those investing in, brokering, or developing data centers. To overcome these challenges, it is essential to adopt a holistic approach to risk assessment that goes beyond traditional security considerations and incorporates business risks from the earliest stages of site selection and project planning. Engaging with partners who have deep expertise in data center commissioning and risk management can help anticipate and address threats related to compliance, governance, and resource availability before they jeopardize project viability.
