Edge data centers are popping up everywhere right now, as the industry looks to expand closer to the end user.
But it’s not just businesses primarily focused on data centers that are interested in Edge: Tower companies are also hedging their bets.
“We believe that the convergence between tower and cloud is something that has a long-term trajectory and will happen as the wireless operators start converting their networks to 5G and upgrading their Core,” says Jake Rasweiler, SVP of innovation in the US tower division at American Tower.
“As the cloud continues to grow, we see this need to have increasingly decentralized compute.”
Data center approach
Primarily a tower company, American Tower is a publicly-listed real estate investment trust that owns and operates more than 226,000 telecommunications assets across 25 countries.
The company likes other infrastructure, too. Unlike rivals such as Crown Castle, which has previously stated it’s not interested in the data center market, American Tower is all in on the idea.
In 2021, American Tower agreed to acquire data center operator CoreSite for $10.1 billion. CoreSite runs 28 data centers across 11 markets in the US, including key data center hubs in New York, Northern Virginia, and Silicon Valley.
“With CoreSite, our digital ecosystem and interconnection, we can use that as a platform to facilitate that distribution using our land,” Rasweiler tells DCD.
“We have more than 1,000 locations across the US where we have multiple fiber providers, with land that can support multi-megawatt deployments, and we have power today to upsize the power to accommodate that build-out. So CoreSite’s ecosystem plus ATC’s land is a great combination.”
He adds that the acquisition of CoreSite has been able to drive American Tower’s approach to data center growth.
“When we acquired CoreSite, we acquired an operational business with a lot of knowledge in this space,” he adds. “There’s been a tremendous amount of collaboration between American Tower and the CoreSite teams, to be able to take best practices from the data center world and blend it with the ability to deploy that technology and those services in a massively distributed way.”
Tower Edge
While CoreSite focuses on traditional data center markets, American Tower is also expanding its Edge data center footprint.
It operates several small Edge colocation sites - branded as Access Edge data centers - at existing tower locations in Pittsburgh, Pennsylvania; Jacksonville, Florida; Atlanta, Georgia; Austin, Texas; and Denver and Boulder, Colorado.
Rasweiler explains that his company categorizes the different types of data centers into three categories: Core regional data centers, usually in Tier 1 markets; secondary hubs which are called aggregation centers; and Access Edge, typically found at the tower and usually less than 100kW.
Tower sites can make ideal sites for Edge data centers, according to STL Partners' senior consultant Matt Bamforth.
“Towers are the perfect location for micro data centers as real estate in cities is expensive and limited, hence it is very hard to build larger data centers here,” said Bamforth in a blog post last year. “Plus, they are already equipped with connectivity and power – two critical factors to enable data centers.
“Tower companies (and mobile operators who still own their towers) can capitalize on this opportunity. Many next-generation applications will need compute to be brought to the last mile to achieve the necessary latency. Meanwhile, carriers are virtualizing their RAN, which will accelerate investment in data center-like facilities at towers and consolidate network equipment at these premises.”
Another infrastructure player, SBA Communications, has also invested in the Edge data center market and says it has up to 50 sites in operation or development.
Leveraging its land
Given the vast footprint of American Tower across the US, this has presented an opportunity for the company to build out beyond traditional telecom infrastructure such as towers.
While sourcing new land to build any sort of infrastructure is getting tougher in the US, it has pushed a re-think for companies to utilize the land that they own better.
“The fact that we already have the land and the presence proximate to these major markets, there's a speed-to-market advantage that we have with these assets,” explains Rasweiler. “It’s best for capital efficiency as well as being able to leverage land that we already have.”
The company believes that tapping into Edge data centers at its tower sites is a no-brainer. “If you think about a typical interconnect data center, it's a location where enterprise clouds and networks are all coming together,” Rasweiler says. “And these larger tower sites where we are deployed already have multiple network operators and landline operators present.
“The fact we have power, fiber, and land makes it easier to build a data center or extend the use of that land to a data center, so we think that's a natural way for us to extend the capabilities that we already have on our tower sites.”
He notes that utilizing their existing sites in this way is also a more sustainable approach.
“One of the key things we think about is sustainability, and our ability to leverage digital infrastructure on land that we already have, as it’s land that's already been put to this digital infrastructure use,” Rasweiler says. “Now we're just extending that need to the local community and our existing customers.”
Breaking ground in Raleigh
In June, American Tower broke ground on a new data center in Raleigh, North Carolina, which Rasweiler says fits into its plans around aggregation centers.
According to the company, the aggregation hubs are designed to extend cloud services closer to the Edge, noting the potential to enable technologies such as hybrid cloud and AI.
The 4,000 sq ft (371 sqm) facility will initially offer 1MW and is expected to go live in Q1 2025 and will be American Tower’s first.
Eventually, the site will have the potential to offer 4MW across 16,000 sq ft (1,485 sqm) at full build-out. The site will leverage direct expansion cooling and assisted hot aisle containment to offer an average of 15kW per rack.
Rasweiler notes the importance of the Raleigh build, stating that it's the first build of many aimed at offering 1MW. He told DCD that it has decided to build the first site in Raleigh because of its existing presence in the state.
“We thought Raleigh was an interesting market, as we have a strong presence in North Carolina,” he says. “We selected that market because it's the capital of North Carolina, one of the fastest-growing metropolitan areas in the country.
“It also has the ‘research triangle’ [a trio of research-focused universities] and major institutions and technology companies that are in that market, that we think are our natural customer base for what we're looking to do.”
Built to Suit
According to Rasweiler, American Tower could put data center-capable assets within 50 miles of 99 percent of the continental US population by locating them at the base of its towers.
Although currently in the construction phase, the work going on at the Raleigh site will be able to be replicated at future ATC sites, he says.
The company says that several locations have been designated as “shovel ready,” indicating that construction design has begun and aggregation Edge data centers can be rapidly built based on demand at these sites.
“We’ve approached this as more of a build-to-suit model,” he explains. “We do build-to-suits in the tower industry and we’ve been doing that for years as American Tower.
“We have land that can handle multi-megawatt facilities, plus the fiber and power. And so we are doing some early stage development to qualify those sites to be what we call shovel ready, and give us the ability to build them quickly.”
When it comes to Edge use cases, Rasweiler is excited by IoT (Internet of Things) and AI inferencing and expects them to support customer support use cases.
“We fully expect Raleigh and future Edge data centers to be able to support a wide variety of applications,” he says, noting that the facility is designed for higher-density compute.
“On average, from day one it supports 15kW per rack, but we can support a much higher power density per rack and we can also accommodate water cooling as needed with this design.” When asked what type of customers will use the sites, Rasweiler says he expects it to be a blend of enterprise, network carriers, and cloud providers.
Convergence at the cloud
Speaking of cloud, Rasweiler notes how significant it is for Edge devices and use cases.
"We believe that you're going to see this convergence between tower and cloud,” he explains. “If you look at the types of applications that are run on our primary customer's devices, they are using those applications are increasingly cloud-centric, video, and fixed wireless.
“So we saw that there's going to be a greater direct connection between wireless users and cloud and we see that as a natural extension of this. We also saw the belief that these cloud networks are going to get increasingly distributed. It's hard to predict exactly when, but we believe our land is a natural play for that.”
To support the company’s cloud capabilities, it signed a partnership agreement with tech giant IBM earlier this year.
The collaboration means that IBM Hybrid Cloud capabilities and Red Hat OpenShift will be accessible in the American Tower Access Edge Data Center ecosystem and give clients access to Edge technologies, IoT, 5G, AI, and network automation.
American Tower will deploy IBM's hybrid cloud platform and systems at its distributed real estate locations, creating an "Edge cloud," and will also be able to deploy these on-premise for customers.
At the time, IBM noted that the use of its cloud computing platform would provide more flexibility for enterprises to deploy applications – on public clouds, at the Edge, or on-premise.
“This can help to securely process and quickly analyze data closer to the point where it is created,” IBM stated in January.
According to Rasweiler, IBM is “very strong in the enterprise space, and helping customers automate and improve their operations.”
He adds: “We see that our two worlds complement each other, and their ability to solve problems for customers and deploy infrastructure plus our ability to deliver the data center that can house that infrastructure.
US-focused… for now
Only around a fifth of American Tower’s tower infrastructure is located in the US, as it also has a sizeable footprint across Europe, Asia, and Africa.
But Rasweiler says the focus for its aggregated hubs will remain on American soil.
“We've taken a modular approach to be able to roll that out to multiple locations in the US. Let's get Raleigh going and expand in the US, and then we can think about international after that,” he says.
Rasweiler was coy on future locations or a particular timeframe for that US expansion, but says American Tower will target secondary markets to complement existing Tier 1 markets.
“We're looking at what is called the top 100 markets across the US,” he explains. “We think those are the ones that are natural for us. If you call the existing Tier 1 markets that exist today, let’s call them primary hubs, we’re interested instead in the secondary hubs.
“Raleigh certainly fits in that category, but so does Detroit, Houston, and Pittsburgh, those types of markets are also ones that we're looking at as well, to be natural extensions of those Tier 1 markets."
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