Will Santa Clara's Data Center Boom Continue? update from November 2008

Santa Clara, Calif. has been a hotbed of data center activity this year. But will this trend continue?

Rich Miller

November 5, 2008

2 Min Read
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Santa Clara, Calif. has been a hotbed of data center activity this year. But will this trend continue? The city's combination of affordable electric power and a prime location in Silicon Valley has made it a magnet for data centers, and most of the major data center developers have been expanding in Santa Clara.

But last week DuPont Fabros said it would suspend constructionon its planned $270 million data center campus in Santa Clara. The company’s plans called for a pair of 300,000 square foot data center buildings with a power capacity of 72 megawatts. DuPont Fabros said its decision was driven by spending constraints after it raised $100 million, rather the $300 million it had hoped, from a refinancing of one of its Virginia properties. 

Does the decision represent a change in sentiment about demand in the Santa Clara market? Or was it driven solely by internal factors at DuPont Fabros? We'll hear more from DFT when it releases its earnings. But we also touched base with data center developers with active projects in Silicon Valley.

Here's the status of the Santa Clara data center developments for the industry's major players:

  • Digital Realty Trust (DLR) owns seven properties in Santa Clara and is developing new data centers there for Facebook and Yahoo. "Nothing has changed with any of our Silicon Valley projects - no slow downs or scale-backs like you’ve heard from some other companies," said Digital Realty spokesman Rich Miller, who said the data center REIT is "practically fully leased in the Bay Area (including the development projects that are not yet completed) and looking at new projects to potentially pursue in the area."

  • Terremark (TMRK) is moving ahead with its plans for a 50,000 square foot data center adjacent to its existing facility in Santa Clara. "We plan to break ground there in the second half of our fiscal year, which runs until March 31," said Xavier Gonzalez, Director of Corporate Communications for Terremark.

  • CRG West has begun construction on a 50-megawatt data center in Santa Clara. "We are still proceeding with our Santa Clara project and expect it to be done in very late Q2’09 or early Q3’09," said David Dunn, Senior Vice President of CRG West.

  • Equinix (EQIX) says it recently opened a phase II expansion of its center in Santa Clara, and reports that demand has been strong. "Currently, the company has no plans announced for (additional construction in) the Silicon Valley," said a company spokesperson, who added that "Equinix takes into account the current economic climate and its impact on supply and demand as it contemplates expansion opportunities." The company is currently building new data centers in multiple markets in the U.S., Europe and Asia and says its announced expansion projects will continue on schedule and are fully funded.

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