Information Center

Two charts of cloud computing data center construction boom

  

According to Jones Lang LaSalle (JLL), the lease volume of global data centers increased by 33% in 2018, most of which were driven by cloud computing providers.

Data center vendors and analysts often repeat an estimate that about 80% of the computing power to run enterprise applications is still in the enterprise data center (rather than running in the cloud or hosted data center). In pursuit of this huge growth potential, cloud computing service providers have invested billions of dollars every quarter in building and leasing data centers to host these services, from original computing and storage to Salesforce or Office 365 style subscription based software. Hong Kong server

Google is building a data center in Clarksville, Tennessee

When talking about their infrastructure strategies, super large cloud computing giants (such as Amazon Web Services, Microsoft Azure and Google Cloud Platform) only mention data center leasing in passing - sometimes even not at all, which is an important part of these strategies. Professional data center developers can quickly provide a large amount of new capacity in the area most needed at a certain point in time. When providers are not sure how much demand they will see in the market in the future, they can also reduce the risk of investing in large-scale construction projects in the new market of cloud computing service providers. They also provide land for data center construction in the market where the supply of appropriate plots exceeds the demand.

Two charts in a report released by Jones Lang La Salle, a commercial real estate giant, illustrate the vigorous development of the competition for cloud computing providers to expand data center capacity. The company tracks the supply and demand dynamics of the world's largest data center rental market. It has been promoting professional developers such as Digital Realty Trust, CyrusOne and Global Switch.

It is hard to imagine that the above chart also shows how important the North Virginia data center market plays in this boom. According to Jones Lang LaSalle's data, the 775MW capacity absorbed in the top data center market last year (an increase of 191MW, or 33%, since 2017) has leased 270MW in Northern Virginia. The second highest "absorption rate" is in London, where enterprises rent 69MW of data center capacity. Cloud computing providers account for 42% of North Virginia's absorption: 113 MW, about 40% higher than London's total absorption rate this year.

However, Jones Lang LaSalle said that in the data center markets in Europe, the Middle East and Africa, the bigger story is that 70% of the data center capacity leased in these markets is leased by cloud computing providers.

Since there is no sign of slowing demand, data center developers continue to build. By the end of 2018, Jones Lang LaSalle was tracking the data center capacity under construction around the world, about 550 MW, half of which was in North America, 30% in Europe, the Middle East and Africa, and the rest in the data center market in the Asia Pacific region.