Adaptive design in data center construction and operations is emerging as a crucial strategy to meet soaring demand, minimize environmental impact, and accelerate deployment timelines. As the digital infrastructure required to support developing technologies and high-performance workloads continues to expand, the ability to scale flexibly, and deliver facilities faster than ever before, has become a strategic differentiator.

In this episode of DCD>Talks, Michael Welch, chief technology officer at Aligned Data Centers, shares how the company stays agile across three key phases of data center development. Welch emphasizes the importance of future-ready planning, supply chain resiliency, and modular deployment strategies in ensuring readiness for AI-driven workloads and other emerging compute demands.

The three phases of development

The data center industry is undergoing a fundamental transformation, accelerated by the demands of generative AI, machine learning, and evolving customer requirements. Welch outlines three distinct phases that describe the evolution of data center design and deployment:

“The first phase is what we call legacy facilities,” he explains. “These are data center facilities built in the last 15-20 years and while they may have older technologies built around certain densities with different applications, they’re still relevant today.”

While legacy facilities continue to serve a purpose, the industry is now deeply entrenched in a second phase – adaptation. In this stage, facilities that have been under development for several years are being retrofitted and upgraded to accommodate the demands of advanced computing and rising power demands.

“Of course, data center development timelines can be quite long,” notes Welch. “And so as we adapt those spaces to be flexible enough to handle new workloads, we’re creating a new generation of adapted facilities. And they're going to set us up well for what I think is the third phase.”

This third phase represents a leap toward optimization. Purpose-built, next-generation facilities are being designed to fully capitalize on creative energy solutions, high-density compute capabilities, and modular infrastructure components.

Shaping the next generation of data centers

The momentum behind advanced compute is fundamentally reshaping how data centers are designed and operated. AI workloads are increasingly pushing toward higher power densities, driving the need for more sophisticated cooling strategies and greater energy efficiency.

Welch emphasizes that the optimization of future-ready facilities isn’t just about managing technical challenges, it’s about unlocking tangible benefits such as improved space utilization, reduced capital expenditure (CAPEX), and enhanced energy efficiency.

“Increased density may allow for shrinking the white space and saving on square feet in facilities,” explains Welch. “As you adapt, you're trying to figure out a way to support those, but not necessarily to the edge of exact perfection.”

Over time, Welch adds, these facilities can be further optimized: “In the future, you can start to optimize those facilities completely around higher densities, and you get those benefits on energy efficiency and CAPEX out of the optimization phase.”

Providing built-in flexibility

Flexibility has become a cornerstone of modern data center design. As workloads evolve and new applications emerge, facilities must be able to scale, adapt, and respond rapidly. Aligned's approach is rooted in creating standardized but customizable solutions that can be tailored to specific customer needs.

“We develop tools that we can deploy out of our toolbox to suit the needs of our end user and customer,” says Welch. “As a hyperscale and wholesale colocation owner, operator, and developer, Aligned has to be nimble enough to be able to meet the needs of the market, and we want to do it speculatively to some extent, so we can be fast to deliver that capacity.”

Aligned partners with advanced prefabrication specialists to assemble modular systems that are rapidly deployable and inherently scalable. These prefabricated units are designed to handle diverse operational requirements, including varying levels of backup power, cooling systems, and rack densities.

“When it comes to backup generation and other prefabrication technologies, we have different options,” adds Welch. “Some users are after reduced generation, some want full backup generation, and it's easy for us to pull out and put in components using our supply chain, so that we can be agile in responding to those customer requests.”

It’s all in the planning

In an industry shaped by rapid shifts in technology and demand, strategic planning is paramount. Welch highlights the value of designing facilities with flexibility built into their core – especially in terms of power and cooling.

“When you think about a data center development, you want to set up a baseline assumption and have a bound down and a bound up density plan,” he explains. “So, depending on the workload that could come in, you could see a lower density air-cooled solution for cloud operations, or a GPU-type workload that's higher density.”

That strategic foresight allows operators to quickly scale up without requiring complete overhauls. If future needs demand more power, facilities can be retrofitted with additional power blocks or enhanced cooling systems, planned for at the outset.

“We want to make sure we have enough linear square footage along the white space so that we can install enough heat absorption and the right liquid-to-air ratios to meet end user and customer requirements,” continues Welch.

Supply chain challenges

Supply chain reliability is a talked-about issue, particularly as demand continues to outpace availability of key components. Delays, cost overruns, and logistical bottlenecks have forced companies to rethink procurement strategies.

“Having a supply chain program is critical,” says Welch. “Our program is called the VMI (vendor-managed inventory) program. It allows us to go out and speculatively procure equipment ahead of actual project demand. So, we can lock in delivery slots and pricing early, to buffer ourselves from some of the later economic churn that could come during the order cycle.”

Aligned’s proactive supply chain approach is paired with a flexible design philosophy that enables components to be used across multiple locations. This flexibility increases agility and helps insulate the company from unpredictable changes in project scopes or timelines.

Another significant advantage comes from focusing on domestic manufacturing: “Nearly all of our finished goods that go into our facilities are built in the US, and that has been a great insulating factor, based on some of the latest dynamics that we're seeing,” says Welch.

Finally, Welch underscores the value of long-term strategic partnerships. “Having patient partners that understand that planting these seeds will yield fruit in the future is really the enabler of the entire picture.”

With great challenges comes great opportunities

While the challenges facing the data center industry are substantial, they also present opportunities for innovation and long-term growth. Whether it’s overcoming power constraints, deploying new energy technologies, or adapting to evolving workloads, Welch believes the sector is well-positioned to rise to the occasion.

“It really depends on what you're trying to solve,” he explains. “There's transmission and distribution constraints, there's coincident peak challenges, and then there's generation challenges. There are new technologies that are being developed, like SMRs (small modular reactors), that can potentially solve for two of the three.”

Flexible load strategies are also emerging as a viable solution. Certain utilities, Welch notes, are actively managing these coincident peak problems – short-lived spikes that strain the grid only a few times a year.

“By removing load from the grid at those times, it's benefiting everybody,” he says. “It's keeping prices low, it's keeping infrastructure online. And it's not continuous, so it's something we can plan for. There’s a lot of opportunity in technologies that allow facilities to do that.”

Both traditional and emerging technologies will play a role in addressing these hurdles, Welch concludes: “There are ways for us to overcome some of the grid constraints in the future and so that can be done with traditional technologies today. There's also newer technologies that are coming to help make that a little bit easier, and they’re simpler to install.”

Future hurdles

Looking ahead, Welch identifies three core challenges facing the data center industry: utility and chip availability, and a growing skills gap. As facilities grow larger and more complex, the need for specialist labor intensifies.

From construction to operation, the entire lifecycle of a data center requires trained and certified personnel. Skilled electricians, HVAC specialists, network technicians, commissioning agents, and more, are all required in the right place, at the right time, to help feed the next generation of data centers.

To help address this growing issue, Aligned is investing in workforce development programs: “Investing in programs reaching further into high schools and colleges to get people into those roles, training them over time, treating them well, to keep them around. Those are some really key focuses, not just for Aligned but also all of our partners.”

Through its commitment to adaptive design, modular strategies, and forward-thinking planning, Aligned Data Centers is positioning itself at the forefront of a fast-changing digital infrastructure landscape.

To hear more about how Aligned Data Centers is championing adaptive design to help drive the next generation of data centers, watch the full DCD>Talks episode with Michael Welch here.