Data center market

Top cloud and colocation providers plan 14 million sq. ft. of new data center capacity in 2019

Global data center construction is undergoing a boom as the leading cloud and colocation providers add an estimated 14 million square feet of capacity in 2019.

IHS Market is currently tracking 135 new data center building and expansion projects that are expected to open this year. These efforts are expected to add 14 million square feet of capacity in 2019. Another 4.5 million square feet has already been announced for the first half of 2020.

The growth in 2019 and 2020 follows 52 new building and expansion projects that came online in the second half of 2018 with 3.6 million square feet for covered providers.

“Cloud expansion and enterprise colocation adoption are continuing to drive the majority of new capacity additions in the data center market,” said Alan Howard, principal analyst at IHS Markit. “The period-over-period spikes we are seeing in capacity additions are a natural part of the deployment and absorption phases of the data center construction cycle.”

The top-5 cloud providers ranked by IT-operated data center square feet are Google at 13.7 million, Amazon at 12.4 million, Microsoft at 10.7 million, IBM at 3.4 million, and Tencent at 2 million.

Phoenix data-center market heats up
Phoenix is the most recent hotspot for major data-center building activity. In recent months, Compass Datacenters, Stream Data Centers, Vantage Data Centers, Microsoft and Google have scooped up more than 700 acres of land—or more than 30 million square feet—for new data center campuses.

“Intuitively, a hot climate like Phoenix doesn’t seem to be conducive to economical data-center operations,” said Alan Howard, principal analyst, IHS Markit. “However, the growth of the Phoenix market is being driven by reasonable power prices, more efficient cooling, solid tax incentives, regional network connectivity and an exceptionally low risk of natural disasters.”

Big money in financial tech
Growth in online banking, payment processing and other types of financial transaction processing has forced fintech companies to grapple with technology and compliance issues to keep pace with fintech innovation. Savvy colocation service providers know that fintech companies are typically high-credit and spend more on IT infrastructure than most other vertical markets. CyrusOne derives 17 percent of its revenue from fintech, with Equinix at 16 percent, Digital Realty at 12 percent and Flexential closing in on 10 percent.

“Colocation providers can cater to fintech clients by offering highly redundant data center and low-latency network connectivity infrastructure that has a proven uptime track record,” Howard said. “Connectivity to other fintech and partner companies is also key, along with regulatory compliance with PCI DSS, FISMA, SOC, SSAE 18, NIST 800, ISO certifications, and a variety of others. Like most colocation tenants, fintech companies are ‘sticky,’ so they tend to remain customers and grow their colocation footprints, and often at a faster clip than other enterprise verticals.”

— Alan Howard, analyst, IHS Markit, USA.

3 responses to “Top cloud and colocation providers plan 14 million sq. ft. of new data center capacity in 2019”

  1. Jignesh Patel says:

    I loos

  2. Jignesh Patel says:

    Me be loss of

  3. Bra Sairo says:

    Wow, how amazing could this be? We are ready for new technology to pop up.

    I hope this one would be moderate and convenience for us all?

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