Digital Realty: Modular Data Centers Not a Threat

Digital Realty Trust (DLR), the largest provider of wholesale data center space, says it doesn't see the growing ecosystem around modular data center designs as a threat to its business.

Rich Miller

February 23, 2011

2 Min Read
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The growing ecosystem for modular data centers now includes a number of colocation providers and developers offering "container colo" facilities. But the industry's largest operator of wholesale data center space says the emergence of these modular products isn't likely to impact its business. In a conference call with analysts last week, Digital Realty Trust CEO Michael Foust said he wasn't overly concerned about recent announcements of factories that can mass-produce up to 18 megawatts of modular units each month.

"We don't see (modular data centers) as a threat at all," said Foust. "The container market tends to be for specialized applications. The demand for modular space is fairly limited, as we see it. Enterprise users want a solid-walled  building."

But should that change, Foust also left the door open for Digital to participate in the modular market as a provider of plug-n-play space for containers. "There's no reason why he we couldn't put containerized servers in one of our Powered Base Building facilities," he said.

Docking Stations As a Colo Play

Powered Base Building (PBB) is undeveloped space with the power and fiber connectivity already in place, ideal for companies who want to fit out their own data center space. It also could be adapted to offer docking stations for containers, a model offered by CoreSite and featured in a new facility in Silicon Valley.

The company also reported a surge in leasing of its Powered Base Building product in the fourth quarter of 2010, a sign that some large customers are opting to invest in building out their own data center space rather than leasing fully-built wholesale space. The fourth-quarter total of 234,000 square feet of PBB was more than the company leased and commenced in all of 2009.

The Turn-Key Datacenter program offers customers finished ”plug and play” raised-floor data center space, which shifts the data center development costs from the tenant to the landlord, and allows for much quicker deployment than if the customer built a new facility on its own.

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