Skip navigation

Strong Data Center Demand Seen for 2010

More than a third of large corporate data center users in North America plan to expand their footprint in 2010, and many are expanding because they have run out of power, not space, according to new survey data.

More than a third of large corporate data center users in North America plan to expand their footprint in 2010, and many are expanding because they have run out of power, not space. Those were the key findings in survey data released Wednesday by Digital Realty Trust.

The survey of senior decision makers with responsibility for their companies' data center strategies was conducted by Campos Research & Analysis for Digital Realty. Among the key findings:

  • 83 percent of respondents are planning data center expansions in the next 12 to 24 months;
  • 36 percent of respondents have definite plans to make those expansions during 2010;
  • 73 percent of respondents plan to add two or more facilities as part of their data center expansions;

It's not surprising that Digital Realty believes demand will be high, since the company is in the business of building and leasing data centers. But the customer survey's major points were echoed by multiple panelists at Wednesday's DataCenterDynamics New York event. 

Financing is a Factor
"Demand has been pretty steady," said Dan Golding, Managing Director at DH Capital, an investment bank specialized in hosting and telecom deals. "The story has really been supply. It's been very, very difficult for people to finance new data centers."

At the national level, the pending demand for data center space may be three times greater than the available supply of quality space, according to Jim Kerrigan, the director of the data center practice at the real estate firm Grubb & Ellis. "All those deals that got shelved in 2009 because the CFO said no .. they're going to happen," said Kerrigan.

The end users at DataCenterDynamics New York included large firms in the financial sector, who concurred with the notion that cost-cutting has resulted in pent-up demand for data center space. "A year and a half ago we were talking about new data centers," said Glenn Neville, Director of Engineering at Deutsche Bank. "Since then we've been talking about how long we can go with our current data centers. Our plans for growth are still there. Those plans are being postponed, but they're not being cancelled."

"It feels like someone closed a door, and things are backing up behind it," said David Schirmacher, a vice president at Goldman Sachs.  

Big Chunks of Space Grow Scarce
Kerrigan said the supply and demand challenges will be most acute for companies needing large footprints of contiguous space. That imbalance stands in stark relief to the requirements described in the Digital Realty survey, in which 70 percent of companies planning data center expansions say they envision large projects of at least 15,000 square feet in size or 2 megwatts or more of power.

"One of the most interesting pieces of data in this study is the lead role that power is now playing in these expansions," said Chris Crosby, Senior Vice President of Corporate Development for Digital Realty Trust. "The need for additional power has become the main driver for data center expansion plans as companies seek facilities with adequate power and favorable utility rates to control operating costs."

As a result, more companies are tracking their data center power usage and using the data in their capacity planning. The survey found that 76 percent of respondents now meter their power use, while the number of companies that meter power down to the PDU level increased by 29 percent over last year. "These are very positive signs that companies better understand their data centers' energy use and can make informed decisions to reduce energy consumption," said Crosby.

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish