What will the turmoil on Wall Street mean for the data center sector? As the financial markets prepare to digest the collapse of Lehman Brothers and the sale of Merrill Lynch to Bank of America, it seems likely that the deepening problems in the financial sector will have ripples in the rest of the U.S. economy.
That clearly includes the data center sector, where there are three key issues:
- How the upheaval will impact the availability of capital for data center projects.
- The ongoing demand for data center space from Wall Street firms.
- The fate of existing data centers operated by Lehman and Merrill Lynch in any sale/merger process
There are far more questions than answers at the moment. For some history and perspective on these issues, here are some links to our “Crunch Time” series earlier this year, which examined the following issues:
- How eroding conditions in the credit markets and commercial real estate affect new construction and the supply of data centers.
- How the credit crunch is affecting data center builders, the specialized companies that have already committed to spending hundreds of millions of dollars on new facilities.
- Wall Street’s appetite for premier data center space and whether the financial sector, bruised by huge losses from subprime lending, will continue to build new facilities.