The ever-increasing demand for online content such as movies, videos, apps, and social media is spurring the adoption of cloud services to store all this content. This, in turn, is expected to double the size of the North American data center industry by 2021, according to JLL’s 2016 North America Data Center Outlook report.
From cloud adoption to data sovereignty, the data center industry is experiencing a host of new change drivers, all while it continues to explode with vigorous growth. We’re observing companies getting smarter about their data center and data usage strategies, thriving amidst these winds of change.
Corporate headquarters relocations and regional office expansions are contributing to the absorption of office and data center space, but more space and power is positioned to come online into 2017.
Supply of data center space will remain stable in this market, with demand coming primarily from the government and technology sectors.
Employment growth, GE’s relocation to Boston, and continued strength in tech and life sciences are all boosting Boston’s economy, ultimately benefiting data center space providers.
Cloud demand will continue to outpace the supply of data center space in the Chicagoland area, although major providers are in the process of next-phase speculative builds.
New supply of data center space is projected to be completed by the end of 2016, with demand coming mostly from financial services, insurance, and increasingly technology.
Companies looking for data center space are attracted to Denver’s technical talent and central U.S. location, offering interconnectivity to communications networks serving Chicago and San Francisco.
Even as oil and gas prices have dropped, demand is still coming out of the energy sector, which utilizes data-intensive applications to support drilling and exploration efforts.
High power costs are keeping demand for data center space in the LA market flat. Large users with high MW needs will continue to source in markets with cheaper power and lower taxes.
The supply of data center space is running ahead of demand, giving users leverage until absorption increases. Demand within the tri-state area continues to be dominated by the financial services industry.
In the last 24 months, no new providers of data center space have entered the New York State/New York City market. Third-party colocation providers are taking a “just-in-time” approach.
With rich fiberoptic networks, low latency, and access to all cloud providers, Northern Virginia is a dominant expansion market for both new and existing third-party data center providers.
Benefiting from sustainable power, data center supply is increasing in the Pacific Northwest, with demand dominated by the technology industry; a new influx of Asian corporations can be seen.
With short latency to California, but decreasing power and tax costs, Phoenix is seeing demand for data center space from end-users with regional requirements, and supply continues to increase.
Low inventory levels and a lack of construction are edging up pricing in the Bay Area data center market. However, local tech companies, mobile apps, and cloud requirements are continuing to drive growth.
New data sovereignty laws and low-cost electricity are two of the drivers of demand in this area, where supply is increasing dramatically.
Many cloud-based providers are rapidly expanding within this market, where supply is currently stable. Plans for significant data center projects have been proposed but are not yet in the works.
Calgary’s supply of — and demand for — data center space is holding steady, despite oil market volatility. Vancouver’s supply is extremely limited, putting upward pressure on pricing.
Additionally, data sovereignty laws subject digital data to the laws or legal jurisdiction of the country in which the data is stored. According to the JLL report, countries around the globe are increasingly enacting such laws. Consequently, some of the data industry’s biggest players are quickly expanding globally to meet growing demand and regulatory compliance requirements.
Cloud adoption will double the size of the data center industry over the next five years.
Data center users are disbursing data across locations, aligning with smarter data management strategies.
Data sovereignty laws are redrawing the global data center location map.
Climate change is shaping data center legislation and technology.