Data Center Journal

Volume 27 | May 2013

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Real estate fundamentals in the global multi-tenant data center sector continue their strong performance By Sean Brady and Jeff West R obust demand along the entire spectrum of third-party data center providers – including the wholesale, colocation, managed services and cloud segments – has fueled strong market fundamentals and the rapid transformation of data center markets across the globe. "The sector's strong global performance bucks the prevailing macro level trends of a sluggish global economy that has been dotted with regional recessions, hesitant growth and widespread uncertainty", said Sean Brady, Senior Director and CoFounder of the C&W Global Data Center Advisory Group. The rapid adoption of technology and its impact on data center real estate shows no sign of slowing anytime soon with demand being driven on several fronts. Broadly, it's the usual suspects: the increase of internet and mobile device users, broadband penetration and e-commerce. Basically, the ongoing evolution of the digital age continues to follow exponential growth patterns in line with Moore's Law in both mature and emerging economies around the world. This strongly translates to space and infrastructure demand related to content channels in spanning media, gaming, mobile apps, social networking and financial services – to name a few. Enterprise and corporate users are also facing a critical point-in-time evaluation of their data center needs in an environment of ever-decreasing IT budgets. Capital expenditures and operating expenses are being squeezed at the same time that increased redundancy, security and accessibility of network and critical systems are being recognized and driven by C-level executives. This is prompting demand for colocation data center space, which provides a low cost outsourcing model in space that is ready for occupancy today. The public and private cloud-based storage and backup providers are presenting additional viable solutions for outsourcing and organizations continue to struggle with security and access issues in implementing "bring-your-own-device" (BYOD) work environments that allow employees to work remotely and utilize their own laptops, tablets and mobile devices. According to Brady, both of these options are great solutions for part or all of a corporate client's data center and the Global Data Center Advisory Group can help the client understand the available properties in any given market and the Total Cost of Ownership (TCO). U.S. data centers: sporadic oversupply in a strong market Many of the top tier data center markets in the U.S. struggled with "on again/ off again" leasing activity in 2012, mir- THE DATA CENTER JOURNAL | 9

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