Compared to other nations around the globe, the safest and lowest risk place to locate a data center is the United States, and there’s an abundance of potential in several secondary and maturing markets, according to a report from Cushman & Wakefield, hurleypalmerflatt and Source8.
The United States has the lowest risks likely to effect the operation of data center facilities, the group determined in its evaluation of the 30 most important global markets. Additionally, tenant activity is showing renewed vigor in 2013, with San Francisco Bay Area and Northern Virginia highlighted. The report, titled "Data Center Risk Index 2013 Edition" was released last week.
The United Kingdom held second position. The nation’s high scores relating to international internet bandwidth and ease of doing business helped maintain its place above all other locations surveyed in Europe. Scandinavian country Sweden, with its cool climate and stable power grid, took third place this year, jumping from the eighth spot last year.
The aim of the report is to help companies make informed investment decisions about where to locate data centers, as well as to develop strategies to mitigate anticipated risk. Factors such as energy and labor costs, internet connectivity, ease of doing business, natural disaster potential, and political instability are all taken into consideration and weighed to reflect different risk levels.
What Variables Were Considered?
The United States has long been on top of the list when it comes to best served country in terms of Information and Communication Technology (ICT) infrastructure and general connectivity, according to the report.
“In the United States, factors such as robust internet bandwidth capacity and connectivity and stable power costs contribute to its top ranking,” said Jeff West, Director of Cushman & Wakefield’s Data Center Research in the Americas. “Throughout the Americas, secondary and maturing markets hold an abundance of potential. Despite ranking last on the Index, Brazil’s dynamic economy and strong demand ahead of the World Cup and Olympic Games is fueling a swell of new submarine fiber-optic cable and infrastructure construction, while Canada’s solid mix of strong market fundamentals and low risk is sure to continue to attract investment from the U.S. and Europe.”
The rapid adoption of technology and its impact on data center real estate shows no signs of slowing and underlying market fundamentals will continue to trend positive, according to the report. The U.S. construction pipeline continues to be robust with most established data center markets seeing variable levels of new supply as demand moves from the sidelines into decision making and outsourcing becomes more popular.
Other Countries to Note
Canada, which is sometimes called "America’s Hat," (I’m originally from Canada so I can say that) took fifth place. The Greater Toronto Area makes up the majority of the Canadian market, but all metros remain strong in terms of demand.
Other interesting areas of the world include South America, and most notably Brazil, its major data center market, as well as the Nordics and the appeal of the hydroelectricity they can offer.
In Asia, Hong Kong held the least amount of risk at sixth place. With natural disasters and a shaky economy, Japan dropped the most out of all countries surveyed, from 20th to 26th.