The Exchanges

Q What can you actually prefab? Like what I'm trying to, what are the Lego building blocks?

A Yeah. Yeah. Good question. So, um, almost everything in the electrical world and almost everything in the mechanical world are prefab for us now. So think of all the way out from where the utility comes onto the campus and I've got a transfer switch or I've got a transformer that I'm stepping down. We'll have all of that pre-assembled on a, on a skid so that you don't have to have somebody wired between the transfer switch and, and Wire between that and the, you know, a transformer. Um, we'll have the entire power center, you know, everything in there that distributes electricity into the building all show up in one unit. Um, we have our entire, uh, today, both liquid or hybrid cooling, so both liquid and air, shows up in a single packaged unit. So these things, you're not having to put together any of it on site. Um, all of our buildings are tilt up You know, um, prefabricated so that the panels show up and we literally just crane them and set them in place so no one's having to make any of the walls, no one's having to pour any, uh, forms or, or build any forms or pour any concrete. They all show up on a truck, again, literally just like Legos. Slab A goes in slot A. Slab B goes in slot B. And, uh, they get lifted off a truck and slid into place. So almost the, uh, the roof is the same way. Uh, we have prefabricated double T's that support the span. Literally the whole buildi…

AI assessment note: “almost everything in the electrical world and almost everything in the mechanical world are prefab”

Q ton of new electricians, I'll pay for their training, or I will sponsor it, or something like that. So that, that's kind of a new phenomenon. So you as the ultimate employer, or maybe not even the employer, right? Because maybe your GC is the employer. You're just the, you're just the one who needs them to exist. What is the role that you can play in, in manifesting them?

A Yeah. So, so, you know, we talked about, I mentioned that, you know, we're building campuses and those are multi-year projects. So we've looked in the markets and we've, you know, started the projects and we said, Hey, um, what do we need to get this project finished? We need more skilled labor. We need more. And you'll hear us use the phrase, mechanical, electrical, and IT skills and, uh, in a marketplace. And can we help the marketplace provide that skill? Um, the biggest campus we have to date is in, uh, just south of Dallas in a suburb called Red Oak, and we partnered with a community college there, Texas State Technical College, and said, hey, if we were able to convince our partners alongside us to build a curriculum, would you be willing to, um, you know, for lack of a better word, pilot a program where we train in those three disciplines? And so, in partnership with Texas State's Technical College, And multiples of our partners, um, because to your point, right, the end user customer is the general contractor or the electrical contractor. He's the one who needs the employees. Um, our partners, so think of Schneider Electric or Siemens, people that, whose equipment needs to get plugged in by those electricians, have all helped us stand up a, uh, a school at Texas State Technical College, a program to train people. 12 weeks, you start off, you don't have to know anything …

AI assessment note: “we partnered with a community college there, Texas State Technical College”

Q and power availability being another. Maybe right now, community pushback being another one that has emerged. One of them, though, Yeah. One of them, though, clearly is, is also labor in the workforce. Um, but I think it gets the least airtime of them. Um, you know, if you're to think through for, for you guys, what stops you from, you know, skyrocketing your build-out rate, where does labor rank?

A Yeah, today, you know, you listed probably one and one A and one B. Power and, uh, is, is the biggie, and the community has raced up the list pretty quickly. Um, you know, didn't think we'd be at the White House six months ago talking about, uh, who pays for infrastructure on the grid, but we are. And, and right after that would be labor. Um, and I would tell you, you know, It's interesting. The question of, Hey, is it stopping us? Um, what it's doing is costing a lot more money and putting a strain on the schedule. Lots of, um, lots of management of where can we get the right people slotted in at the right time. Um, if we had all the labor in the world, we could go faster, but, uh, there there's without a doubt, and especially in the electrician space, it's a tough space to get enough bodies, uh, in enough hours. Cause most of our projects, we're trying to run them, you know,

AI assessment note: “Power and, uh, is, is the biggie... And right after that would be labor.”

Q to this must be yes, but, like, is there a new category of, like, journeyman electrician who is, you know, going and spending six months at a time, or whatever it is, at living in a camp in outside Jackson, Mississippi, and then in Abilene, Texas, and then in, you know, wherever the next data center is going to be. Is this, is this a whole new category of electrician?

A We have seen, um, teams that will manage a team environment where they'll roll guys in You know, 3060, 90 days at a time. You know, I, I spent four years in the Marine Corps. It feels a little bit like days of deployment, where, hey, you know, we're gonna get ready, we're gonna go get the ship ready, and it's gonna go out, and it's gonna be in the water for six months, and then we're gonna come back and switch everybody out. It feels a little bit like that, right? Because the projects are so big and so long that we are bringing waves of talent, waves of skill into the marketplace, giving them a place to live, eat, sleep every day. And then going to the job site where they're, where you're bringing literally an army of electricians and, and to your point at all different levels, but yeah, the, the journey part of it or the travel part of it, just like travel nurses, there's a lot of that. It was all over our marketplace.

AI assessment note: “the journey part of it or the travel part of it, just like travel nurses”

Q is it that there are plenty of electricians, but actually you need this specialized, you know, higher level trained, uh, subset of that category. And if only you could, so like, we're going to get to what do you do about this, right? But is, is the fundamental thing you do about this, get more people trained as electricians, or is it get more electricians trained as specialized electricians basically?

A So, so in good AT&T fashion, I think it's and, um, I think we need more electricians, and we need more senior electricians. It's both. It is not either or. Um, we, you could employ more electricians today without a doubt, and you could employ more higher-end electricians today. Just the industry is swallowing up the capacity. I mean, we, just like you see in the utility providers struggling to keep up with our industry from a pace perspective, same thing with the electrician For lack of a word, industry or market has struggled to keep up the pace of the growth. I mean, it's, it's hyperbolic. I mean, it's on the news every day, so everyone knows all about it. But, you know, to me, I think about it just like the utility providers. Those guys have never heard numbers this big and never heard numbers coming this fast. And that same problem is, not only is it manifest in the generation, you know, transmission and distribution side of the business, it's manifest in the who's going to wire this on the other end.

AI assessment note: “I think we need more electricians, and we need more senior electricians. It's both.”

Q to it, but I'm interested in to get a little bit more detail. Like, you know, you, you're building a new data center. Um, you're going to need a certain amount of trained electrician work, certain number of person hours, let's say, like, what is the actual process to go find that workforce? And then, you know, presuming that it is constrained, as you're saying, how do you manage that?

A Yeah, so, so, uh, we could probably find, um, people with a better answer than me, but at the end of the day, it starts with our selection of GCs, and, and it starts with us building a relationship in the marketplace and going through the bid process early on and going, hey, this is what our labor pools are going to look like. Let's think about this today. Let's think about this long before we get there. Um, there is a lot of moving labor around. Um, we have a large project going in Mississippi. Um, you know, When I tell people we have a large project going just outside Jackson, Mississippi, some people go, where's Jackson, Mississippi? So kind of the point of it's, it's not, it's not in downtown, you know, Atlanta or downtown Chicago. Um, so there's lots of work ahead of time thinking about where are we going to find the labor? What markets are we going to go get that labor? And is that labor willing to get picked up and moved? And then when we do pick them up and move, is there enough housing for them? Um, you know, I, I think sometimes, uh, a popular show, Landman, You see those, um, in Landman, those camps where there's just trailer and trailer after trailer. There's a lot of that at data center sites where you are bringing the labor, uh, especially in these tier three, tier four markets, and providing places for them to live and eat and stay so that they can be near the jo…

AI assessment note: “starts with our selection of GCs... lots of work ahead of time thinking about where”

Q construction that gets done. There's plumbing, all other things like that. Is your sense that, um, It's just that the supply-demand balance of electricians is most acute. People do say electrician seems to be the one that, like, is the biggest bottleneck. Is, is that, is that why, or is it just, like, disproportionate number of electricians that you need because the data center is basically a ton of wiring?

A Yeah, I think it's a little bit of both, right? Some of it is there's so many electricians and the level of electricians you need, right? We, you know, the, the panel that gets put on a data center doesn't look anything like the panel at my house. Um, so, so, you know, you've got much more senior, much more capable electricians, one, and then two, you need hundreds of them, right? Because to your point, at the end of the day, the reason we charge rent based on, on kilowatts is it is the limiting factor in the building. And so, one, we have really, really skilled electricians, really, really high-end electricians working on really, really, really big systems. It is the biggest piece of the skilled labor. Yes, there's, you know, heavy equipment operators, and yes, there's, you know, plumbers, and yes, there's sheetrock people, but all of those look much more like a traditional build. The electricians are much more involved and much more sensitive to the facility.

AI assessment note: “Yeah, I think it's a little bit of both, right?”

Q to earn triple wages, uh, effectively becoming an electrician would sort of naturally result in a larger workforce, maybe not overnight because it takes time to train, but like, you know, even in the absence of, of some of the more, the clever and new programs that folks are, are pursuing, including yourselves, um, You know, the market would fix itself, you would think. Um, do you see that happening?

A So, so I, I, so I agree. I believe in an efficient market. I believe that the markets draw talent when there's money to be earned there. And that is happening. We see it happening in basically every market where we work, where there are people, uh, creating training programs, creating, uh, uh, fast tracks, creating methods and means for people to get up to speed and to supply more capabilities in the marketplace, because the demand doesn't, I mean, And that, that's the other thing. We talk about a, a, a lease that gets signed today. We're going to be building that campus for four or five years. So, you know, being able to, I mean, you could start with someone today and spend two years with them in an apprenticeship, and they're still going to be useful on our campus for three or four years while we're building there. These things don't go up overnight. It's a lot of work for a long period of time, and so that's one of the reasons we've tried to get into the markets where we are and start education programs, because we're like, hey, the We're going to be here for a while. We know we're going to need people at the other end of this. Let's, let's start training in ourselves.

AI assessment note: “I believe that the markets draw talent when there's money to be earned there. And that is happening.”

Q Right. What's the rate limiter on the building, or not the rate limiter, what stops you from having a, you know, gigawatt building?

A So, um, for us, we've chosen the form factor we have because we have some beliefs about, um, you know, how you impact the environment, how you impact microclimates around the building. So, so we've done a lot of study. Lots of CFD happens inside the building. Hey, computational flow dynamics. How am I going to move the energy around? How am I going to move the heat up? How high do I move the ceiling? Do I have to spend any money letting the heat move around the room? There's lots of study of what's going on inside the building. We've done a good bit of study on what goes on outside the building, right? When you have all of this equipment, um, not only exhausting, but also sucking air in and pushing, uh, warm air out, you can produce microclimates. So for us, we've chosen the 40 megawatt, um, form factor to allow us to spread the buildings out and not impact the performance of the equipment. Can you do it in larger form factors? You can, absolutely. Um, do I, do I think that, that will move our form factor up? Not anytime soon. We felt like we figured out a sweet spot between the equipment we buy, the, the, the readily available nature of the equipment we buy, managing the building that size, but certainly people that do purpose built buildings that, that are very specific engineering can build larger form factors. It's just not in our roadmap at this time.

AI assessment note: “we've chosen the 40 megawatt, um, form factor to allow us to spread the buildings out”

Q one of the reasons to invest in Workforce that's local and so on. Um, but it's also obviously become, it's flared up as like a really big issue now. What is your perspective on what best practices should be for a data center developer entering a community to position yourself to be able to actually build the thing and not get the kind of backlash that we're seeing right now?

A Yeah, Cheryl, I might, I got lots of thoughts on this one, so I might ask you to tap the guardrails and keep me on message here, but I'd say the biggest one for us is our industry grew up being, um, secretive. Not secretive because we had anything to hide from anybody, but think about the first two significant customers for large-scale data centers. It was the financial institutions and it was the government, and they were secretive about where that large compute footprint sat purely from a security perspective. There was nothing to hide from the community, but you didn't want anyone to know where JP Morgan's, you know, bank processing big computers sat. So nondescript building on the edge of town that nobody knew who it was. So our industry grew up with this secrecy only because it was part of a security plan for very crucial assets, whether financial or government. That's the history of the business, and we'd never been asked really To be transparent about where we built. So this notion that somehow we're, the industry was hiding anything. It was part of the security fabric of the early customers. Um, now, um, that there are data centers going in lots of places and there's lots of questions. The industry needs to push the envelope to say, Hey, I need to embrace the communities that I'm in and I need to let people know what I'm doing because, and I'm going to give a weird anal…

AI assessment note: “I need to embrace the communities that I'm in and I need to let people know”

Q which is what we've been talking about. But of course, the other is require less people, um, which has more to do with, like, the design of the data center, and can you prefab some of it, and things like that. Like, how much opportunity do you guys see in, uh, just minimizing the number of labor hours that are totally, that are required in total, maybe particularly for electricians?

A Yeah, I can tell you, that's one that's been part of Compass from the very beginning, so I'm gonna toot our horn a little bit. Um, we, we viewed, um, building data centers as really a manufacturing process from the very beginning of our business, not a stick-built construction project, but rather an assembly project, and, and our motivation there, um, I know you're asking about how do we manage, does it help with the headcount problem? Our motivation there was really a couple of things. Speed, um, If, if, um, higher quality and a more diverse workforce, if you can, you know, if we talk about putting a project in Jackson, Mississippi, um, almost all of the people that are going to show up in Jackson and do the work are going to be men for lack of a, just the dynamic at home. Someone's got to, you know, manage, uh, the, the stability of the household, take kids to school and whatnot. And so generally it's a more, the traveling journeyman worker is generally a man. And so by doing offsite manufacturing, putting together large components of our data centers offsite, it allows for a safer, more diverse, and more reliable product, right? Safer for the employees, more diverse, because giving somebody, hey, you can be here from eight to five. You don't have to live in a different city. You can be home in the evening with your family. It allows us to employ more women in the business, a…

AI assessment note: “I know you're asking about how do we manage... Our motivation there was really”