#IndustrialTech

Data Center Services

Data centers have zero tolerance for failure given the high cost of downtime and value of lost data, requiring routine maintenance and 24x7x365 availability. The market is also underpinned by multiple growth vectors, including the investment in Artificial Intelligence and Machine Learning, increasing data intensity and requirements of low latency processing, and the shift to cloud computing.

Following our investment in Salute Mission Critical, LLR continues to seek platform and add-on investments in data center services businesses. CEOs and intermediaries working in the sector should reach out to Mike Levenberg to discuss relevant opportunities.

Technology is going to change and you need to be continuously updating your training program to keep up. Two years ago, we never thought we’d use robots in data centers. Now we’re flying drones to do visual checks in high places. Assume you’ll have to change continuously and you won’t be caught off guard.

Lee Kirby, Co-Founder and Chairman, Salute Mission Critical

Why We're Investing in Data Center Services

Unprecedented Investment

The data center market continues to expect strong growth, driven by both hyperscale and colocation facilities. AI, low latency processing, the increase in connected devices and shift to cloud computing are all contributing to the unprecedented investment in the data center sector.

Optimization through Outsourcing

Data centers are continuing to outsource services, as it is non-core to their operations. Opportunity for specialized service providers to continue to win business that has historically been performed in-house or by generalist service providers.

Need for Specialized, Skilled Labor

High cost of downtime and rigid environmental conditions within the facility require technical skillsets, creating an opportunity for more skilled providers to differentiate and help solve the critical skilled labor shortage for digital infrastructure today.

Building on Experience: LLR’s Investment in Salute Mission Critical

Salute Mission Critical is the largest global full lifecycle data center services provider that delivers critical facility management services to hyperscale, colocation and edge leaders.

LLR invested in Salute in February 2021 to help the company continue to grow and scale its delivery of mission critical services to a global client base. The capital would also help Salute make an even greater impact on the lives of the veterans and their families it hires and trains to operate data centers with military precision.

LLR has helped create value at Salute in several ways, including supporting the strategic acquisitions of Iconicx and AMS Helix, which expanded the company’s capabilities in commissioning and QA/QC and strengthened its’ Europe and UK presence.

Unprecedented investment in the data center sector

11%
1
expected growth of colocation data center market from 2021-2026
20%
1
expected growth of hyperscale market from 2021-2026
50%
2
of all data centers expected to support AI by 2025, resulting in a 30% increase in operational efficiency

See You There?

April 15, 2024
Data Center World
Learn More

Meet the LLR Team

References

  1. Beyler, Ryan. “Hyperscale and edge drive data center demand as the rise of AI takes center stage,” JLL, 2023, https://www.us.jll.com/en/newsroom/data-centers-2023-global-outlook
  2. “Gartner Predicts Half of Cloud Data Centers Will Deploy Robots with AI Capabilities by 2025,” Gartner, 2021, https://www.forbes.com/sites/forbestechcouncil/2023/08/17/using-ai-for-secure-efficient-resilient-and-sustainable-data-centers/?sh=5cc7699d4f79
Disclaimer:

The information presented herein is intended for an audience of potential LLR portfolio companies and the intermediaries supporting their capital raise processes. Named LLR investments presented herein do not reflect a complete list of LLR investments and are provided for informational purposes only. Certain statements about LLR made by portfolio company executives and other quoted parties herein are intended to illustrate the work of LLR’s Value Creation Team with such portfolio companies or reflect the individual’s perspective on the featured industry sector. Such portfolio companies are controlled by investment vehicles managed by LLR. Quoted parties were not compensated in connection with their participation, although they generally receive compensation and investment opportunities in connection with their portfolio company or Senior Operating Advisor roles, and in certain cases are also owners of portfolio company securities and/or investors in LLR-sponsored vehicles. Such compensation and investments subject participants to potential conflicts of interest in making the statements herein.