The market for new data centers is poised for another year of growth in 2013, with several large projects on the drawing boards. McGraw-Hill Construction recently reported that General Motors is planning to build a $150 million General Motors Data Center in Milford Mich., and according to a post at www.datacenterknowledge.com, planning continues for a $1.5 billion project by a yet-to-be-named company now scouting sites in Altoona, Iowa, and Kearney, Neb. Nebraska and Iowa are reportedly popular locations for data centers because of an extensive telecom fiber network that was installed years ago. Google, Yahoo and Fidelity Investments already have data centers either in operation or under construction in the region.
There’s also a concentration of data center activity in the New York metropolitan area and Connecticut, where Digital Reality Trust, a large real estate investment trust (REIT) that focuses on data centers, late last year acquired a 271,000-square-foot space held for development located on 34 acres of land in Totowa, N.J., just outside New York City, to develop the existing building to accommodate 15 megawatts of critical IT load and construct a 50 megawatt onsite substation to support the development of additional data center capacity in future phases.
Digital Reality Trust is an interesting player to watch in the data center space. A global player, the company has 117 data centers in 32 markets throughout Europe, North America, Asia and Australia that together cover approximately 21.9 million square feet. Over the past year, its sales increased at a 20%-plus clip. Digital Reality Trust reported total operating revenues of $349.7 million in the fourth quarter of 2012, up 29.2% from $270.6 million in the fourth quarter of 2011, and total operating revenues of $1.3 billion for the year ended December 31, 2012, up 18.2% from $1.1 billion in 2011.
Cervalis LLC, Shelton, Conn., which hosts data operations for companies in this region, recently broke ground on a 170,000-square-foot operations center in Fairfield County, Conn., that will accommodate customers that need customized data centers. The company recently released a press statement that said opportunities for growth in New Jersey’s data center market continue in part because of concerns over outages at existing facilities from Superstorm Sandy. Michael Boccardi, president and CEO, Cervalis, said in that press release that capital expenditures to build or retrofit an existing data center can top $1,000 per square foot.
“In the wake of Superstorm Sandy the need for disaster recovery and business continuity has been heightened for companies in New Jersey that had service outages for days on end,” the release said. “Growing demand for colocation, cloud and managed services are also contributing to the need for more data centers. Storage is a big topic these days too, as the amount of data companies need to backup continues to grow exponentially. Even small to midsize companies see the need to be able to store large quantities of data.”
Another big player in the data center market, Equinix Inc., Redwood City, Calif., also recently announced the opening of a new expansion to an existing facility, the International Business Exchange data center located in downtown Seattle. The company said the facility will add approximately 51,000 square feet of data center space and capacity for more than 1,000 cabinet equivalents to Equinix’s presence in the Seattle market. The company currently operates in 31 markets around the world.
Charles Meyers, president of the Americas for Equinix, said in a press release announcing the new facility, “The Seattle market is an important communications hub for the Pacific Northwest and a distribution point for IP traffic to Asia Pacific. With SE3 we can offer the many cloud, network and digital content companies in Seattle the ability to directly connect with their customers and partners in order to improve application performance and generate new revenue opportunities.”
Another name you might be hearing soon in the U.S. data center market is the European data hosting company OVH, which according to a report at www.datacenterknowledge.com has raised $181 million to build new data centers in the U.S. The posting said OVH is “known for hyper-growth and an innovative approach to infrastructure design, building custom servers, containers and data centers shaped like giant cubes.”
In related news on the data center front, Schneider Electric recently announced the expansion of its data center business with the launch of the Schneider Electric Mission Critical Services & Software division, based in West Kingston, R.I. (See related executive appointments on page 6). The business is being built out from its 2011 acquisition of Lee Technologies.
The launch of Schneider Electric’s Mission Critical Services & Software division and the Data Center Service Provider Team places Schneider Electric in a strategic position as a leader in end-to-end data center energy management, Rob McKernan, senior V.P., Americas, Schneider Electric IT Business, said in a press release. “We provide one-of-a-kind, holistic and fully-comprehensive solutions that are unique and currently unavailable in today’s market, with energy management capabilities from planning, building and operations to energy procurement, lifecycle management and software, all from one company,” he said.
These facilities should continue to represent terrific business opportunities for the specifying engineers that design them, the electrical contractors that install the equipment, and the distributors that handle the supplies, because they are loaded with electrical products including backup generators, switchgear, lighting, voice-data-video (VDV) cabling and related products.