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Study: Data Center Demand is Strong, Broad

Is the current demand for data center space for real? Is it broad-based? Will it last? Yes, yes and yes, according to a new study of 150 corporate data center operators commissioned by Digital Realty Trust (DLR).

Nearly 85 percent of companies surveyed say they expected to expand their data center network within the next three years, with 33 percent saying the expansion is either already underway or will occur within the next year. Of those who are planning datacenter expansions, 75 percent plan to expand in two or more locations, indicating that these expansions will be complex, multi-site data center projects.

"This data illustrates that the demand for advanced datacenter facilities is broad-based and has long term growth prospects given the scope and timeline of the projects described by these companies," said Michael Foust, CEO of Digital Realty Trust. "The study also confirms what we see: that the datacenter has become a critical part of business operations whether you make loans, build cars, or provide energy solutions. Its strategic importance crosses all industry verticals, not just Internet-centric companies."

The research was conducted by the respected research firm Campos Research & Analysis which surveyed executives at leading corporations throughout North America about their data center-related initiatives. The average company surveyed has between three and four major datacenters, and nearly 20 percent operate six or more major datacenters (excluding “IT closets in branch offices”).

The study cited a wide range of drivers in the push to expand data centers. These include:

New applications, which require new or expanded datacenters;

The need for more square footage to meet the general growth in the scope of datacenter operations;

Disaster recovery initiatives, which require additional datacenter infrastructure;

Sarbanes-Oxley/Compliance requirements, which require additional datacenter infrastructure;

Power, which has become an increasingly important driver for corporate datacenter planning;

Network connectivity, which requires the need for new datacenter space that meets evolving connectivity needs; and

Cooling, more advanced datacenter space requires high volume systems

"This study underscores that numerous factors are behind these datacenter initiatives, rather than a single issue," said Chris Crosby, Senior Vice President of Sales and Technical Services for Digital Realty Trust. "More than compliance requirements, power issues or new applications alone – there are at least a half a dozen different factors driving the demand for datacenter space. The cost of power may fluctuate and compliance regulations may evolve, but we feel the need for datacenter space is bigger than any single issue.”

Digital Realty Trust, owns 62 data center or Internet gateway properties, comprising approximately 11.4 million rentable square feet in 25 markets throughout North America and Europe.

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