Why data center construction is ‘where the action is’

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as the world grows smaller with the addition of more increasingly connected devices, the need for infrastructure supporting those devices’ data is only going to become greater.

Medical and financial records, social media services, entertainment and industries from shipping to manufacturing to retail — people expect that data to be available to them at all times with just the click of a mouse or the tap of a smartphone icon.

Chances are, all that information is moving through a data center.

‘Where the action is’

Data centers are information warehouses that are able to host all or a portion of a company’s IT operations in one location. These warehouses use what can sometimes amount to thousands of servers amassing, storing and redistributing information via the cloud or otherwise.

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Once upon a time, data centers were a tool of enterprise users — huge companies that dealt with so much data that it made sense to corral the related functions into one physical area, according to Curt Holcomb, executive vice president of data center solutions at real estate firm Jones Lang LaSalle’s (JLL) Dallas-area offices. Those facilities typically ranged anywhere from 40,000 square feet to 250,000 square feet.

Today, Holcomb said, the market is all about colocation. In such arrangements, a third-party data center hosts multiple companies’ servers in the same location, providing any other necessary equipment, space and bandwidth capacity.

That share of the market is outgrowing enterprise facilities by leaps and bounds with most Fortune 500 companies opting to outsource their data centers via colocation, Holcomb said. “That’s where the action is.”

As one would expect, those facilities are even bigger than their enterprise forebears, clocking in at an average of 150,000 square feet to 600,000 square feet, Holcomb said.

The size of colocation data is growing as demand increases and providers gain economies of scale,said Mason Mularoni, a senior research analyst also with JLL. If they can further drive down costs by building bigger, he said, then so be it.

Still, there are other data centers being built to host just one company — and tech companies like Google, Apple and Facebook are chief among them.

However, unlike their predecessors, these companies see unprecedented avalanches of information cycling through their servers. And the magnitude of their data center programs reflect that.

Though these companies often have to shell out more on the massive centers needed to process their data, they’re also on the receiving end of tax breaks and other incentives from municipalities eager to benefit from their presence economically.

In August, Facebook announced that it would build a $750 million, 900,000-square-foot data center near Columbus, OH, for which it received $37 million in tax breaks. The social media mainstay is also building $1 billion data centers in Los Lunas, NM, and Henrico County, VA, near Richmond.

Combined, the company is snapping up billions of dollars in incentives to build millions of square feet for its data.

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