JAN - FEB 2021CONSTRUCTIONTECHREVIEW.COM9DATA CENTER OUTLOOK 2017 KEY INDICATORSespecially land. China's increasing influence on Hong Kong coupled with infrastructure challenges in Japan has helped reinforce and elevate Singapore's position. This isn't a secret. Every cloud infrastructure provider has made huge bets on the marketplace, and the number of new operators who have entered the market and existing operators expanding is spectacular by any measure. If demand is really as deep as predicted, if China's BAT companies' (Baidu, Alibaba, and Tencent) platforms are really ready for global acceptance, and if adoption to cloud infrastructure is going to happen in Asia at the pace we have seen elsewhere, we are going to see its first evidence in Singapore. The plentiful supply of data center space and myriad operators means that established cloud infrastructure companies need only to turn to third party data centers when their customer demand is real and exceeds forecasts. Current pricing is showing dramatic weakness. We will soon find out if this is fueled by temporary oversupply and increased competition or fear that the demand for cloud services is more tempered than previously predicted. Given the cost structure to develop data centers in Singapore, current pricing is not sustainable over the long term.Lastly, Vantage. Unless you are immersed in the data center industry, Vantage Data Centers may be an unknown entity. Vantage Data Centers is currently in the midst of being acquired by DigitalBridge for more than $1 billion. Why pay attention to this? Because it highlights a weakness within the data center site selection process. The operator you select today is likely to be owned by someone else in the future.Today the Vantage story has a happy ending. DigitalBridge appears to highly value the management and operational teams, and Vantage is a key component to their digital infrastructure master plan. However, the outcome could have been very different. While we use Vantage to highlight the issue, they are not unique. Recent examples include Ascent, C7, DataBank, Global Switch, Latisys, RagingWire, Sentinel, T5, and ViaWest. Public companies are not immune from divestitures and mergers, including CenturyLink, Tata, Telecity, Verizon, and rumored targets such as Interxion. Data center REITs (real estate investment trusts) are quick to point out that their structure fosters the stable, long-term ownership that customers covet. While more stable, there is certainly no guarantee. Both of the largest data center REITs have divested data centers or have announced intention to do so.The reality is we cannot control who will own or operate our data center. There are no guarantees that staff will stay, that MOPs and SOPs will be followed and that required investments will be made to maintain resiliency. No amount of design excellence will make up for a neglected system. The only items that are guaranteed to survive a change of ownership are your colocation contract and its service level agreement. These contracts are highly negotiated when it comes to price, but are usually found lacking when it comes to guarantees around performance and remedies. Outage credits and termination rights create incentives but will not ensure uptime or performance. Next time you have a service order to add or renew services, take a look at your master service agreement, lease and service level agreement and ask yourself if it has the necessary protection if someone new owns and operates your data center. NorthernVirginiaSource: CBRE Research, Q4 2016.Net Absorption Supply & Demand - 2016DeliveriesSilicon ValleyChicagoNYC/NJDallas/FortWorthPhoenixAtlanta0102030405060708090100Meg 3Watts Bill Dougherty
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