U.S. Remains Prime Data-Center Spot: Report

The United States remains the prime region for building new data centers, with the U.K. and Germany not far behind, according to a recent report on data center risk.

The report (registration required), co-authored by real estate titan Cushman & Wakefield and hurleypalmerflatt, claimed that the U.S. market retains a healthy amount of vacant space, and—almost as important—a ready supply of available bandwidth. The study gave the most weight to the bandwidth issue, as well as the cost of energy and the ease of doing business.

The report also took into consideration various macro-level risks, including economic risks and social factors, which could affect a data center’s service continuity and uptime.

The study assigned the United States the top spot (100) in the index. The United Kingdom received a score of 91, followed by an 83 for Germany and an 81 for Iceland. Canada ranked fifth with a score of 80—tied with Qatar, the highest-ranked Middle Eastern country, and Hong Kong.

The report claims that business conditions in the Americas remain strong. “In the U.S. the fundamentals are strong for data centre markets over the next three to five years,” it read. “Tier 1 markets although highly concentrated have a healthy amount of vacant space and the competition amongst third party providers will create a dynamic market making outsourcing an even more compelling case as the operators look to grow their business by offering new services and expanding into new locations.”

It also concluded that Canada’s future looks bright, with more investment and development anticipated for the region. Brazil was also a promising region, based upon its status as a member of the BRIC (Brazil, Russia, India, China) group of large, emerging countries.

Europe Begins to Diversify

In general, data centers have tended to cluster around established financial centers; this has held true for Europe, with London, Brussels, and other cities attracting operators. But as more and more buildouts incorporated storage arrays with lower latency requirements, more data centers ended up built in far-flung regions such as the Nordic countries. The problem with that spread, the report concluded, is the availability of energy as well as high labor costs.

“There is no doubting that with the continued development of IT products, cloud computing, corporate outsourcing and the sheer exponential creation of data, that the demand for data centres and their services will continue to grow in the EMEA region,” it stated.

Asia: Potential, But Somewhat Risky

Asia, on the other hand, remains a mixed bag. The report pointed to established regions such as Singapore and Australia as hub regions, serving as connectivity gateways to the rest of APAC. But it also claimed that clients were “consistently concerned in the emerging markets over infrastructure designs, technical ability and management expertise.”

China, for example, has a great degree of potential, including abundant natural cooling in the northern portion of the country. The government has also invested heavily in the country’s infrastructure, which will dramatically increase bandwidth capacity. But obtaining licenses to do business is difficult, and foreign companies often seek partnerships with local businesses.

“There is also no doubt that over time the emerging markets will be able to support this growth,” the report read, “the question is speed and whether it can keep up with the projected demand and grasping the opportunity to support the international markets with financially efficient products.”

What’s the message here? Conservative operators will continue to invest in established regions. But with the exponential growth of the Asian market, data center operators with global aspirations are going to have to make inroads into Asia, if they haven’t already.

 

Image: Spectral-Design/Shutterstock.com

Post a Comment

Your email address will not be published.