Q&A: Tyler Kautz of PCL on construction’s $1.3T ‘gold rush’

The data centre gold rush is well underway and PCL wants in. 

Leading their charge is Regional Vice President, PCL Construction, Tyler Kautz, who was put in charge of PCL’s data centre construction blitz last summer. The opportunities are immense with the data centre market project to grow to $1.3 trillion by 2035. 

Kautz is no newcomer to the company’s approach. A 20-year PCL veteran, he previously served as vice president and district manager in Seattle, where he played a pivotal role in expanding PCL’s presence across the Northwest. He was instrumental in building relationships with major technology clients and led the original business case study that inspired the launch of PCL’s dedicated data center division. He now leads a team that has delivered over 120 data center and mission critical projects. These include complex, large-scale retrofits, new builds (including Tier IV fault-tolerant projects) and critical environment upgrades.

We caught up with Kautz to better understand the complexity of data centre builds and PCL’s strategy to be a leader in the space.

SiteNews: What sort of lessons did you learn during your time as a U.S. Marine Corps Reservist and did those military experiences impact your approach to leadership and construction?

Tyler Kautz: My time in the US Marine Corp is a major pillar of helping me form who I am as a leader. The Corp is filled with selfless leaders, who demonstrated to me the importance of putting others first. The importance of being a servant leader as well as investing in growing your team. It was an environment where the team would succeed or fail together; that standard was set from day one and lived every day in both training as well as when I deployed. There are a lot of parallels to the construction industry; from execution of the mission to the safety of those in your team. 

You’ve called the growing data centre market a “21st Century Gold Rush”. What makes you say that and what sort of opportunities are there for the construction sector in this space? 

That isn’t a term that I made up, but something many have said in the industry. There is a race for AI supremacy, with many governments deeming it a national defense issue. There is a lot of opportunity for developers, vendors and contractors to grow considerably during this time of rapid growth, but I think it is different than the gold rush of the 19^th century. The need for data storage and AI factories isn’t going to change; we are becoming more dependent on it every day. From Waymo and autonomously driving cars, to using AI to solve complex medical problems, our society is becoming more and more dependent on both accessing electronic data and processing it. We have been experiencing exponential growth these last few years, and I believe that exponential growth with change to a more linear and shallow growth line in coming years. It won’t go away like the gold rush of centuries past, our society is too dependent on it in our everyday lives, but it will evolve.

What is PCL’s strategy for growing its footprint in data centre work?

PCL is unique in a few ways. The first is our 100% employee ownership model where all levels of the organization can be owners after their first year; it incentivizes collaboration across all our business lines. This is critical to the second differentiator that we are diversified in all aspects of what is needed for a large-scale data center campus. Our culture of collaboration allows us to offer fully integrated solutions including onsite power generation, water treatment facilities and ability to self-perform all aspects of the data hall construction if that is the best solution for the project. Aside from leveraging our ability to perform all aspects of a build, our strategy also focuses on long term relationships. We are focused on building for clients who align with our culture of collaboration and are interested in long term partnerships with a GC who views them, and the entire team, as a partner.

What unique challenges do data centres present from a construction standpoint?

Resources, from the broader sense. There is more demand currently than resources, and by resources I am lumping many things together. Power is limited and, in many areas, the electrical grid cannot even support new power. That has caused a shift to onsite power generation, but that is limited to areas with excess natural gas. Manufacturers cannot keep up with demands for equipment, and established developers are purchasing equipment before they even have dirt identified for a project, so they don’t have to delay a project start due to procurement lead times. As it relates most directly to us, people resources. As a business, our people are our most valuable assets.

It seems the two key problems that need solving on a data centre project are power and cooling. What are some innovative ways the industry is addressing these demands? 

Starting with power, there are many ways to help the issue of power. First is efficiency; how can design continue to drive down PUE (power usage effectiveness) to get more IT load out of the power demands for the site. Manufacturers are spending lots of money-making equipment more efficient.  For power generation, there are a lot of ways that power demands are being addressed. Long term, a spotlight is on alternate energy to help solve the issues with SMRs and potentially fusion energy. Short and midterm developers are utilizing alternate designs to utilize every last bit of strained energy they might be able to get on a campus to maximize IT load for their PPAs as well as generating their own power through natural gas turbine powerplants onsite. 

For cooling, the demand keeps getting greater as density of equipment increases. Air cooling and fan walls are becoming obsolete in most applications, particularly AI builds due to the density requirements. Various types of liquid cooling are being deployed, including direct to chip cooling and even liquid emersion cooling.

You are in charge of a team that has delivered more than 120 data centre builds. What are some of the biggest lessons your team has learned from this experience?

The market has changed significantly over the last few decades. The enterprise data centers that we were building 20 years ago are vastly different than the AI campuses being constructed now. There are lots of lessons we have learned along the way, but under the current state of the builds it is all about resources. Clients want, and need, dependability. They need a partner they can count on to deliver; the physical construction of a data center is not overly complicated. It is the speed and scale of the builds now that you must look at things differently. How do you both ensure you have the right resources while also planning efficiently to utilize those resources. 

What skills and experience are required for contractors to be successful on these projects? 

Less of a skill, but mindset is the biggest differentiator. Everything evolves so fast in this market, and to be successful you must understand that the client’s business revolves around speed. Designs are evolving until the last possible chance to accommodate the newest chip or products, the needs of the market are evolving, etc. and as the GC we need to be flexible while having the understanding that through those changes, we need to find creative ways to maintain overall schedule.

I understand that PCL’s sector teams (solar, buildings, civil etc.) regularly collaborate. How is this advantageous for data centre builds? 

Offering integrated solutions to a client for all needs on a campus reduces their risk and streamlines a project. Even if we aren’t asked to provide an integrated delivery, having the expertise to support them beyond what we are originally contracted to offers a different level of service. As a recent example where we were only acting as the GC on a build for a hyperscale client, they had design changes that required added scope to one of our key subtrades. The project was already resource challenged with our subcontractor partners, so we came up with a solution where we utilized our self-perform capabilities from a different sector to perform the work. This allowed the work to be completed on the original schedule without distracting the particular subcontractor from maintaining schedule on base scope. This ability is a force multiplier.

When it comes to data centre clients, what are they looking for in a construction team? Is it all about speed? Budget? Precision? What makes the difference for them when choosing a construction partner?  

You can’t ever develop a mindset that money isn’t important; it is a baseline that a project has to be make sense financially. However, in the current market I believe clients are most focused on predictability.  Because they are making commitments based on schedule, they are looking for a qualified team that they can rely on to deliver on time.

In terms of North America, what jurisdictions do you see as having the right conditions for attracting data centre builds? What are some things communities can do to attract these investments? 

Drivers are power, or natural gas to generate onsite power, land availability, an entitlement/permitting process that is efficient, and availability of resources. It is not that uncommon of any other type of market … but then overlay that with power constraints. Let’s look at Texas as an example. Texas is a business-friendly state with power and natural gas availability, a strong workforce, and regulations that promote commerce. 

As someone who serves on University of Washington’s Construction Management department board, what do you see as critical skills or experience that incoming professionals need to have to work on teams like yours? 

Construction is an industry we continue working on becoming a more appealing option in society these days. It can provide an incredible living with it continuing to be in great demand. Schools providing more than just the technical skills of physical construction are the ones best equipping students. Interpersonal skills, win-win negotiating, communication, business, and leadership skills. It really is a people-oriented business and the programs that understand that are setting their students up for success.

Finally, I see that you are involved in wildlife conservation efforts, specifically the Rocky Mountain Elk Foundation. What is your favourite thing to do outdoors in the Pacific Northwest?

I love just about any activity that I can enjoy outdoors with my family. Growing up in the Pacific NW offers so many options; one weekend we could be surfing out at the coast then the next weekend we can backpack into a remote high alpine lake in the Cascade Mountains. Construction is a challenging career with lots of demands, and to be successful long term you need to find ways to decompress at times to be more effective. For me, spending time in the mountains with my wife and kids rejuvenates me.