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Demand Outstripping Supply for Data Centers

06/05/2015

A data center exists to provide a place to store a company’s information technology and network equipment. The cloud does not magically exist; it must connect to a tangible storage source. Therefore, data centers are a major asset for cloud service providers. The need and importance for data centers are increasing as the need for the cloud increases.

The data center is in a period of unprecedented transition – driven, in part, by greater cloud provisioning, increased automation, mobile reliance, rising costs and the constant need to do more with less (Data Center Knowledge). Companies are feeling the increased pressure to implement the cloud into their corporate strategies, due to its benefits and increased security provisions. Along with large corporations, it is estimated that 80% of the world’s population will own a personal computer device by 2021. The need for data centers is positively correlated to the growth of technology and the need for storage. It is projected that the IP traffic will nearly triple over the next five years, and data centers workloads will nearly double from 2013-2018 (Cisco Global Cloud Index).

Demand will outstrip supply, and the need for data centers will grow vastly. Major corporations such as Amazon, Facebook, and LinkedIn have made substantial investments into data centers in order to sustain demand and stay ahead of the curve for server requirements. The largest data center requirements continue to focus on the cost of power and low taxation environments as the two most important variables in the site selection algorithms. The United States has become the number one global market for data centers; capturing robust demand along the entire spectrum, as well having the highest internet capacity while the average cost of electricity has remained inexpensive relative to other countries. Regional markets are aware of the increasing demand for data centers, and are offering tax breaks to encourage corporations to reside in their state. The top states for data center tax breaks are Virginia, Texas, and Arizona.

Data centers are high value real estate. The question is no longer whether or not to invest into data centers, the question is now how much can the company get out of data centers and out of the cloud.

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By: Peter Parker

Intern, DTZ - Washington, D.C. 

Follow DTZ on Twitter: @DTZ

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