by Michael Rareshide, on Sep 25, 2017 1:53:46 PM
For over the past five years in data center site selection, the data center real estate market has outpaced nearly every other real estate category, driven by the expanding needs from both consumers and businesses. All reasonable projections suggest that the data center market should continue to be a leading growth category for at least the next two to three years. By the end of 2018, Deloitte Global predicts that spending on IT-as-a-Service for data centers, software and services will be $547 billion. Deloitte also forecasts that procurement of IT technologies will accelerate over 50% by the end of 2019 from a current $361 billion to $547 billion.
Consumers are demanding ever increasing social media capacity, faster downloads and more apps for their lifestyles. Businesses need capacity for initiatives such as artificial intelligence, 3-D printing and big data projects to derive value and increase revenue while providing more and more services online. Banking and financial groups, along with healthcare organizations, must meet expanding compliance obligations, including enhanced security requirements, which will only be more amplified after the recent Equifax breach.
Cloud services represents one of the biggest reasons for the increased demand in data center capacity and growth by offering significant and faster advantages compared to traditional on-site technology services. Gartner projects that by the end of this year the worldwide public cloud services market will grow nearly 20% from the prior year to over $246 billion. Market leader Amazon Web Services (AWS), with a 2017 revenue run rate exceeding $14 billion, is projected to approach $43 billion by 2022.
Where data center operators are being housed
The enterprise-class data center developers and colocation operators could not imagine how the market has changed in just the past seven years. Back then nearly all of these operators took a measured approach with facilities rarely exceeding 4-6 megawatts (MW) totaling at most 100,000 square feet of hardened building.
The market now includes massive stand-alone hyperscale raised-floor facilities that can generally exceed 1 million square feet and 100 MW of dedicated power on campuses that would allow for another similar structure. Millions of square feet of enterprise-class data centers have been developed, primarily by two groups — the wholesale colocation operators catering to corporate businesses requiring large power and pipe needs, and the technology titans like Google, Facebook, Amazon Web Services, Apple and Microsoft.
To highlight how the market has grown, the following list, while not meant to be comprehensive, shows several of the existing mammoth data center campuses, along with some recent developments and expansions, both across the U.S. and globally. It is noted that AWS is not included on this list, preferring to house its public cloud computing in a data center cluster of multiple sites across the targeted area. As an example AWS’s most important cluster in the Northern Virginia region comprises over 25 data center sites across the NOVA region, where its investment in this market is estimated to exceed $1.5 billion.
United States
Existing Data Center Projects
| Company | Location | Size (SF) | Notes |
|---|---|---|---|
| SWITCH SUPERNAP | Las Vegas, NV | 3,500,000 | 343,000 SF / 40 MW under construction |
| DUPONT FABROS | Ashburn, VA | 1,600,000 | Now part of Digital Realty; several campuses |
| UTAH DATA CENTER | Bluffdale, UT | 1,500,000 | Built for the NSA |
| SABEY DATA CENTERS | Seattle, WA | 1,373,000 | Intergate Campus in Tukwila |
| APPLE | Mesa, AZ | 1,300,000 | Several expansions globally |
| QTS DATA CENTERS | Richmond, VA | 1,300,000 | Completed DC space of 500,000 SF |
| DIGITAL REALTY | Chicago, IL | 1,100,000 | 365 Cermak; Significant infrastructure and connectivity |
| CORESITE | Reston, VA | 1,050,000 | Recent expansion of 330,000 SF |
| QTS DATA CENTERS | Atlanta, GA | 990,000 | Other large facilities globally |
| DIGITAL REALTY | Richardson, TX | 790,000 | Several other large campuses globally |
| EQUINIX | Miami, FL | 750,000 | NAP of the Americas |
| CYRUSONE | Dallas, TX | 670,000 | Similar-sized facilities in other US markets |
| EQUINIX | Ashburn, VA | 567,000 | Largest colo provider with millions of SF globally |
| IO DATA CENTERS | Phoenix, AZ | 412,000 | 65 MW; planning a 500,000 SF expansion |
| New Developments/Expansions | |||
| Company | Location | Size (SF) | Notes |
| SWITCH - PYRAMID | Grand Rapids, MI | 1,830,000 | First phase complete: 225,000 SF with 20 MWs |
| Fort Worth, TX | 1,700,000 | First phase 950,000 SF, next phase under construction | |
| MICROSOFT | West Des Moines, IA | 1,700,000 | Total 3-location cluster of 3.2 Million SF |
| SWITCH - CITADEL | Reno, NV | 1,360,000 | Designed for up to 7.2 million SF and 650 MW |
| Pryor, OK | 1,000,000 | Next phase to be completed in 2018 | |
| APPLE | Reno, NV | 1,000,000 | $1 billion second phase under construction |
| Las Lunas, NM | 980,000 | First 520,000 SF in 2018; next expansion under way | |
| Just Announced | |||
| Company | Location | Size (SF) | Notes |
| New Albany, OH | 900,000 | Projected 2019 completion of first phase | |
| APPLE | Waukee, IA | 400,000 | Projected 2020 completion |
Global Data Centers
Existing Data Center Projects
| Company | Location | Size (SF) | Notes |
|---|---|---|---|
| CHINA TELECOM | China | 10,700,000 | Inner Mongolia Data Park |
| CHINA MOBILE | China | 7,750,000 | Hohhot, Inner Mongolia; 115 MW |
| CHINA MOBILE | China | 7,136,000 | Harbin; 150 MW |
| RANGE INTERNATIONAL | China | 6,300,000 | Langfang; IBM /Range Join Venture |
| CHINA MOBILE | China | 5,200,000 | Forshan (Guangzhou); 115 MW |
| CHINA TELECOM | China | 3,500,000 | Guangzhou; 115 MW |
| @TOKYO CORPORATION | Japan | 1,500,000 | Kotu-Ku Campus |
| NEXT GENERATION DATA | Wales, UK | 950,000 | 180 MW |
| TULIP DATA CENTER | India | 900,000 | 100 MW Facility |
| COVILHA DATA CENTER | Portugal | 800,000 | Portugal Telecom |
| New Developments/Expansions | |||
| Company | Location | Size (SF) | Notes |
| HUAWEI | China | 4,300,000 | Under construction |
| APPLE | Denmark | 1,494,000 | Viborg; Completed 2017 |
| LEFDAL MINE DATA CENTER | Norway | 1,000,000 | 45 MW Available. Completed Early 2017 |
| CHINA UNICOM | China | 1,000,000 | Total 6.4 Million SF when completed in 2024 |
| MICROSOFT | Ireland | 1,000,000 | Grange Castle; Multi phase expansion through 2019 |
| Sweden | 900,000 | Lulea Campus | |
| Netherlands | 600,000 | Total construction over $650 million | |
| DIGITAL REALTY | Germany | 344,000 | Total 344,000 SF when complete in 4Q2017 |
| TERACO DATA | Africa | 200,000 | Africa's largest operator; 24 MW completed in 2017 |
| Just Announced | |||
| Company | Location | Size (SF) | Notes |
| Denmark | 610,000 | Plans to construct two 300,000 SF DC buildings by 2020 | |
| AMAZON (AWS) | Ireland | 223,000 | First phase 2019; Total 1.5 Million SF |
Conclusion
In data center site selection, the rate of growth for these extra-large mission critical facilities is expected to continue stateside and globally as new inventory in 2017 has generally kept up with demand. Several different data center trends will feed this double-digit compounded growth, so the data center market can expect similar large new construction and new developments over the foreseeable horizon of the next 24 months.
