JAN - FEB 2021CONSTRUCTIONTECHREVIEW.COM8Dallas, Singapore and Vantage: If I were in charge of my enterprise's data centers, I would be paying attention to these three topics in 2017. While cloud adoption, hybrid IT, edge computing and IoT will dominate headlines, these three items are the barometers of industry trends and adoption that will impact your cost structure and relation-ships going forward.There is universal agreement that companies, which provide the infrastructure platforms for cloud computing drove the majority of global data center absorption in 2016. Most industry experts predict that cloud infrastructure companies will continue to drive demand for data centers, and markets around the globe are quickly expanding to capture that demand. We now see new capital and business plans built around the idea of moving content and performance closer to the customer, referencing the internet of things (IoT) and hybrid IT as key demand drivers. The curiosity for this demand is in anticipation of future needs of the end-customer. Each cloud vendor and edge data center must invest the capital and deliver capacity in advance of the actual need. So how do we gain insight into those dynamics?Dallas is my "canary in the coal mine". Historically, Dallas has been one of the six national data center markets where Wall Street and our data center industry have concentrated their attention and investment. In 2016, Dallas trailed only Northern Virginia in the number of third party data centers delivered to the market (47 MW of supply) and the amount of data center space absorbed (38 MW of demand). However, while Northern Virginia and Chicago, the number three market, saw record absorption well above historical averages, Dallas saw a decline from the previous year. Another 50 MW of third party data center capacity should be delivered in Dallas in 2017.Why concentrate on Dallas and not another market? Because Dallas is an established market with a wide array of operators, plentiful inventory, and is generally only average from a site selection standpoint. Dallas' importance in the data center world cannot be attributed to just one or two factors. From a TCO (Total Costs of Ownership) standpoint, Texas is not the low cost leader. Rental costs are certainly some of the lowest nationally, but the important data center incentives that drive site selection only benefit the largest single occupant facilities, and the utility cost structure can be beaten or replicated in many geographies. The companies and enterprises who lease these facilities in 2017 will provide a glimpse into the factors at work. Most data center transactions fall far below the threshold necessary for data center tax incentives. With low cost eliminated as a principal driver, we'll be able to track if latency and performance are really ready to drive substantial demand. We'll see if plentiful supply, ease of doing business and geography continue to be the major factors. Like Dallas, the Singapore data center market will tell us much about what is happening on a global basis. Singapore has always been one of the safe choices when choosing a base of operations for multinational companies in Asia, along with Japan and Hong Kong. Pricing for all real estate, including data centers, is expensive because of finite resources, DATA CENTER OUTLOOK 2017 KEY INDICATORSBy Bill Dougherty, EVP Data Center Solutions, CBRE GroupMost industry experts predict that cloud infrastructure companies will continue to drive demand for data centers, and markets around the globe are quickly expanding to capture that demandIN MYOPINION
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