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Data center demand soars to record levels: survey

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Red-hot demand for data centers reflects growth in digital economy.

With the accelerating pace of growth of digital ventures, cloud computing initiatives and social networking services surging through our economy, data centers have become the hottest properties around. In fact, a new study finds that demand for data center space has reached record levels.

That's the word from Digital Realty Trust, Inc., a data center solutions provider, which just released key findings from its annual study of the North American data center market. The research, conducted by Campos Research & Analysis, surveyed 300 senior IT decision makers at large corporations in North America.

For starters, the study finds that 92% of respondents will definitely or probably expand their data centers in 2012—the highest percentage in the six years that Digital Realty has sponsored the survey. In addition, 70% of respondents reported having built or acquired a data center project in the previous 24 months, indicating increased demand for data center space in 2012 - 2013. Only 4% of companies reported having no plans for data center expansion in 2012 or 2013.

Behind all the exciting new initiatives seen in the economy today -- from a new generation of startups that leverage data to mobile apps to enterprises' push into the cloud -- are data centers. Digital Realty CEO Michael Foust says the red-hot demand for data centers can be attributed to a number of factors, including "continued adoption of public, private and hybrid cloud computing solutions, pent-up demand from enterprise customers that had deferred expansion plans in previous years due to economic uncertainty, an improved economic outlook, and the proliferation of data requiring appropriate computing and storage environments."

Of those respondents with definite plans to expand in 2012, 38% expect to expand in three or more locations. Plus, 54% expect to pursue projects of 15,000 square feet or more in size.

Power requirements will be considerable. Almost half of the group planning expansions, 49%, expect their data center projects to be supported by at least 2 MW of electrical power, including 12% reporting data center projects that will have 5 MW or more of electrical power, illustrating the significant scale of projects being planned in 2012.

Of those companies planning or considering data center projects this year, 92% plan to expand in the U.S., approximately 50% also expect to expand in Europe or the Asia Pacific region, and 21% reported plans for projects in South America.

The most frequently cited locations for new or expanded data center in the U.S. include New York City/NJ, Chicago, Los Angeles, Dallas, San Francisco Bay Area and Phoenix (in order of ranking). Hong Kong and Tokyo were mentioned more frequently this year than in past years as locations for international projects. London also continued to be a desirable location for overseas projects.

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Joe McKendrick

Contributing Editor

Joe McKendrick is an independent analyst who tracks the impact of information technology on management and markets. He is a co-author of the SOA Manifesto and has written for Forbes, ZDNet and Database Trends & Applications. He holds a degree from Temple University. He is based in Pennsylvania. Follow him on Twitter. Disclosure