Issue link: http://cp.revolio.com/i/915954
THE DATA CENTER JOURNAL | 9 www.datacenterjournal.com By most standards, 2017 was the biggest year ever for acquisitions in the data center industry. DataBank, Digital Realty and Cyxtera are just a few of the companies that made headlines with billion-dollar deals. And there were dozens of smaller (multi-million-dollar) yet significant shakeups across the country. Even if the Federal Reserve decides to raise interest rates in 2018 as is widely predicted, money will still "be cheaper" than it's been in nearly 20 years. Billions and billions will continue being pumped into our industry as demand keeps rising. o nly a few years ago it was predicted that the need for physical data center space would go down as the cloud evolved and became all consuming. Although cloud usage is growing, it's not happening at predicted levels be- cause some companies are returning to dedicated infrastructure for certain aspects of their data (not their own DIY infrastructure, but in an efficient and reliable colo facility). As these "hybrid systems" gain popularity, data center providers are once again in need of space. e dif- ference in 2018 will be thoughtful and strategic growth strategies that are not only about finding more real estate but also about gaining a foothold into new, underserved markets. As leasing activ- ity slowed in 2017, development accel- erated. I expect this trend to continue in the new year. Look for construction of new facilities, remodels and/or ex- pansions to skyrocket compared with the last few years, and here's why. The Big Buzzword e edge. Although this term was introduced a few years ago, we should all expect it and the markets it represents to not only dominate our industry's news and conversations but also expand its reach to the gen- eral population. Just as IoT and cloud computing have gone mainstream, I'm anticipating the edge to be the next big technology buzzword. e ability to support edge computing will be the number-one priority of data center providers in the coming year. anks to three rapidly evolving dynamics—the growth of IoT, technology-empowered businesses and evolving user expectations—expansion into edge markets is now a necessity. By entering these areas and reducing the distance between users and their data, latency decreases and reliability increases. Data-processing time goes from minutes and hours to millisec- onds and microseconds—basically, real time. In addition, businesses can be- come more responsive and intuitive to customers' technological needs when their data center is nearby. Gone are the days when, say, an Austin-based company was content with their serv- ers and data being housed in Dallas— four hours away. Today, businesses require instant access and connectivity all the time to satisfy their customers. Edge computing enables consumers in Omaha, Nebraska, to receive the same speed and service level as those in New York City. As demand for IoT expands, customers (be they consumers or businesses) are calling the shots. Data comes to the edge, not the other way around. Providers have listened. ey too must have a presence in edge mar- kets to stay competitive. Fortunately, the cost of expanding into edge markets is mitigated a bit by tax incentives that specifically target the data center industry. More than 20 states are looking to attract data centers by offering financial incentives such as waiving sales tax on equipment and electricity as well as multiyear property-tax exemptions. Idaho is the latest state to jump on the bandwagon: Proposed legislation makes the state more attractive to companies consid- ering new data center projects, but it also includes rebates for existing data centers when they renew equipment. With data center construction up 43% since 2016, the building boom is already underway. CyrusOne complet- ed a facility in San Antonio, Texas, that was 100% leased before its May open- ing. Companies such as Involta and Switch have had data centers go online this year in Independence, Ohio, and Reno, Nevada, respectively. And even though the first building of Facebook's Los Lunas, New Mexico, facility isn't yet complete, the company announced in November that it plans to triple the size of the complex—making it one of the largest data-storage centers in the world. The winds of change are Blowing for Vendors In this busy year, it's been pretty much status quo for data center ven- dors. Equipment providers and resell- ers have been chugging along with