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Michael Chan of OneAsia fills us in on the current state of data center markets in Asia Pacific, along with where the latest activity is moving. This is an episode of HawkTalk, datacenterHawk’s series of candid one on one conversations with executives and leaders in the data center industry. If you enjoyed this episode, you can check them all out on our blog. If you’d like to know when we release future episodes, you can subscribe here. Check out our video above with Michael Chan of OneAsia to get his take on the state of the Asia data center markets. If you’re short on time, check out the summary of the conversation below. OneAsia’s Presence in the APAC market OneAsia offers a full range of services including colocation, cloud, and connectivity in multiple markets across the Asia Pacific market. They currently have data center facilities in Hong Kong, Shanghai, NanTong, Singapore, and have plans for additional facilities in Thailand, South Korea, and Japan. Demand in the APAC markets OneAsia is experiencing demand from North American, European based customers but not surprisingly their most prominent demand is from Asian, specifically Chinese, based customers. These customers are from a wide variety of industries, including banking & finance, internet service providers, cloud solution providers, & various online business providers. Growth of newer APAC markets Hong Kong, Shanghai, and other major markets in APAC are reaching their growth potential in terms of data center space. Because of this, among other reasons, there has been an increase in activity in other markets with smaller data center footprints such as Vietnam, Malaysia, & Thailand. Part of OneAsia’s strategy moving forward is to be a pioneer and expand into these smaller markets quite rapidly moving forward. As we at datacenterHawk continue to grow and expand our global data center industry information, we look forward to tracking OneAsia and their future growth. Be sure to subscribe to our newsletter to stay up to date on the data center industry.

We sat down with Digital Realty CFO Andy Power and Giuliano Di Vitantonio, EVP of Strategy & Business Segments, to get their take on recent European data center market growth. Check out our episode above with Andy Power and Giuliano Di Vitantonio of Digital Realty to get their take on the state of the European markets. Or if you’re short on time, check out the summary of the conversation below. Secondary European markets experiencing healthy growth When evaluating demand patterns in European data center markets, it’s usually a safe bet to analyze trends in North America because those changes typically follow in Europe 18-24 months later. Initially these trends start in the FLAPD markets and then cascade into the secondary markets across Europe. The largest trend the European markets have seen over the past 6-7 years has been the demand growth from hyperscale users. Starting in 2014, hyperscale users began to establish their presence in the FLAPD markets and now we’re seeing those users want to get closer to their end-users. Data sovereignty and improving the customer experience are the two main reasons hyperscale users are expanding in Europe which is why we’ve seen growth in markets like Madrid, Zurich, Stockholm, and Vienna. Increasing emphasis on global maturity As the data center industry continues to mature markets in North America continue to grow. But recently other markets around the globe, specifically in Europe, have been growing at a faster rate than the larger North American markets. One reason for this is the US-based multinational hyperscale companies wanting to expand and ramp up their growth closer to their international users. The tech divide between North America and Europe The US has consistently had a lower GDP than Europe by more than 100%. But because the US has been an early adopter and investor in the tech space, Europe’s tech spend has been about 75% of that in the states. To take that even further and more specific to data centers, Europe has invested about 50% of what the US has on data centers and IT infrastructure. These figures indicate there is still room for growth in the European data center industry. Which is another reason the growth in the European markets has been at a higher percentage rate than the US growth recently. We'll continue to track Digital Realty as they continue to grow across the globe. Be sure to subscribe to our newsletter to stay up to date on the data center industry.

It's a game that’s won and lost on speed. The faster information can be delivered from a data center, the more valuable the data center can be to people outside its four walls. Customers Don’t Like Slow Delivery Times Imagine you run a logistics company. The success of your business depends on how quickly you deliver packages. As your operation grows, you build warehouses to swap packages on and off trucks that are going to different areas. Sometimes trucks have to stop at multiple warehouses to get everything they need to take to their destination. Ideally, your trucks can take interstate freeways directly to each warehouse instead of slogging through dense downtown traffic or winding through miles of dirt farm roads. Fast roads directly to a warehouse are better than slow roads that require a roundabout route. Traveling on slower roads or taking roundabout routes ultimately compounds into slower delivery times. Customers don’t like slow delivery times. This is what data center connectivity is all about. You probably caught on that the warehouses in our example are data centers. The packages are information. The roads are the connectivity, the focus of this article. The data center industry is usually accomplished via fiber optic cable lines. And just like the roads, if we want to get traffic where it needs to be as quickly as possible, it’s better to use the fastest, lowest traffic, and most direct route possible. We’ll still need to make stops every now and again to pick up packages or data, but the concept remains the same. The Importance of Connectivity In simpler days of the internet, one computer would talk directly to another and get everything it needed. And a delay of several milliseconds would not cause an issue. Today, companies are using increasingly complex systems to support their customers' needs. It’s not uncommon for a company to spread their IT workload between cloud, colocation, and in-house. Within those buckets, they may have a multitude of microservices spread across different servers. As the number of points of communication increases, so does the importance of keeping those communications as fast as possible. From a user experience perspective, all this operational speed is typically taken for granted, until something goes wrong. In terms of user experience, human factor studies have consistently shown over 30 years that delays of 1 second interrupt the user's flow of thought while delays of more than 10 seconds loses their attention. Users consistently bemoan the slow speeds of websites and apps. In the earlier days of the internet, it was understood that as companies were growing there would be some hiccups. Twitter’s fail whale, which indicated a service outage, even became a cultural icon. However today, as consumer choices on the internet proliferate, a slow load will ultimately become a no-load as customers go elsewhere. All the more reason to focus on speed.

In Podcast 40, we continue our Data Center Fundamentals series and dive into the basics of data center location. Why is the location of a data center important? We go through at all the reasons data center professionals need to know about the location of a data center. Economics Data centers are exponentially more expensive than other types of real estate, and the economic considerations have ramifications on all data center projects. Power cost is one of the most important factors when choosing a data center location as it can constitute up to 20% of the total cost of colocation. The cost of power can vary widely from region to region. Areas like Quincy or Montreal are $0.02-0.03 per kilowatt-hour, while locations in the Northeast US can be up to $0.15-0.16/kWh. For larger colocation providers and hyperscale companies who are building entire campuses, land availability and cost needs to be accounted for. In markets like Dallas and Phoenix, there is virtually unlimited land in every direction. In markets like Northern California, Northern Virginia, or Chicago, natural barriers like bodies of water or heightened demand make land acquisition more difficult. The market’s climate can impact the cost as well. In cooler markets, you can use the cool air outside to cool servers instead of air conditioning units. This can help keep power consumption costs down. In warmer markets, summers can have higher power costs due to peaks in demand. Most states offer tax incentives tailored to data center development in order to attract end-users. Larger data center investments can be eligible for tax credits based on the total development investment or receive exemptions from sales tax on equipment. A market’s competitive landscape and demand profile also impact lease rates. Heavy competition and/or an oversupply in a market may lower the amount data center providers can charge. This is what we're seeing in the Dallas and Chicago data center markets right now. Conversely, a smaller number of operators or lower supply in a market can enable providers to charge a higher rate. Hazards A data center’s location can also be influenced by geographical hazards. Natural hazards like earthquakes or hurricanes are important to consider when performing a site evaluation. Markets like Phoenix and Chicago are relatively safe from natural hazards. New Orleans and Orlando are examples of markets that have historically deterred data center development. Even with natural hazards, some markets are so strategic that providers build there anyway. In order to do so, they may need to make a larger investment to beef up the building’s physical infrastructure. For example, Northern California, Los Angeles, and Seattle are areas of high seismic risk but are also three areas of substantial data center investment. To account for natural hazards, data centers can be designed to absorb earthquake vibrations or withstand winds of 150+ mph. Man-made hazards also have an influence on a data center’s location within a market. The proximity to railroads, highways, airports, and nuclear power plants are often considered when selecting a data center location.

The European data center industry is full of growth and change. The increased demand from COVID-19 and individual European countries are at the forefront of that growth. Hear what EdgeConneX CMO, Phillip Marangella, has to say about it. This is an episode of HawkTalk, datacenterHawk’s series of candid one on one conversations with executives and leaders in the data center industry. If you enjoyed this episode, you can check them all out on our blog. If you’d like to know when we release future episodes, you can subscribe here. Below are some of our takeaways from the discussion. COVID-19 increased data center demand as traffic moved from offices to homes The COVID pandemic caused major shifts in the world. Many industries are hurting due to these shifts, but the data center industry has seen an increase in demand. People are home more now than they were a year ago. Whether they’re working from home, streaming tv shows, playing online video games, or anything else that requires an internet connection, homes are becoming the new edge in the data center industry. Opportunities are rising in secondary EU markets Building data centers in Europe can come with challenges like planning for long term scalable power. You need to be able to meet all of your customer's requirements as they continue to grow. Customer needs today are not what they will be in 5-10 years. Planning for expansion to meet needs in the future can be difficult to balance against the costs of building beyond the needs of today. There are still a lot of opportunities in the FLAPD (Frankfurt, London, Amsterdam, Paris, & Dublin) markets, but at the same time, there are a number of secondary markets that are beginning to have needs for data centers. That’s why EdgeConneX decided to build in Warsaw & Munich and are continuing to track markets outside of the FLAPD markets. Expansion into APAC The APAC data center market is a rapidly growing part of the global data center industry and one that EdgeConnex is tracking for future expansion. Expansion into the APAC market requires smart strategic planning and is quite a different task than building in either North America or Europe. A good partner in Asia to help navigate the opportunities there is key to success. We'll continue to track EdgeConneX as they grow and expand into new markets. Be sure to subscribe to this channel to stay up to date on the data center industry.

This is an episode of HawkPodcast, datacenterHawk’s viewpoints on the data center industry. If you enjoyed this episode, you can check them all out on our blog. If you’d like to know when we release future episodes, please subscribe. The main takeaways from 4Q 2020 2020 ended up being a year filled with events that no one expected. These unexpected challenges led to record demand in the data center industry. The fourth quarter wrapped up one of the largest growth years for the industry. Five of the top ten markets in North America (Dallas, Phoenix, Northern California, Northern Virginia, Northern New Jersey) had their largest growth year since datacenterHawk began tracking them. Two other top ten markets (Atlanta, Chicago) had their second best year ever and it came close to their best. Growth in Frankfurt and other European markets The Frankfurt data center market has taken a front seat it comes to the growth in the European markets for a few reasons. While London is still the largest market, Frankfurt has outpaced London’s growth in recent quarters. Frankfurt’s growth is due to its maturity as a market, its high degree of connectivity and the ability for developers to secure land and power. Market maturity means there are enough companies who have an established footprint in a geography that new entrants are more willing to grow their based on the experience of others who have gone before them. As connectivity becomes a larger factor in making colocation decisions, the fact that Frankfurt is highly connected adds to the appeal. Finally, developers in Frankfurt -and Germany as a whole- have been able to procure land and power more quickly than in other European markets. This “speed-to-market” ability is an advantage when it comes to landing large data center requirements. It’s not that the other major European markets aren’t growing, it’s that data center providers have put a lot of their focus in Frankfurt and have shown others how they can grow there. Amidst growth, rates have gone down Over the past 5-10 years, the data center industry has experienced increased demand all over the world, and yet we’ve seen a compression of rates. This is counterintuitive in the real estate world, but when you look at it over time, it makes sense. We’re still in a young stage of the data center industry. 10 years ago, rates were higher because there may have only been one or two data center providers in a market, which meant there was little to no competition. Increased presence in major markets by multiple operators has resulted in lower rates. Another reason for the lower rates is that the product has continued to become more efficient, which has driven costs (and the associated rental rates) down. As innovations continue and providers incorporate customer feedback so they are not developing unwanted facility features, rates will continue to compress. Don’t forget to check out the rest of our HawkPodcasts and don’t miss out on our latest release of market data for the data center industry.

We take a moment to review some of the questions our listeners have asked about the data center industry. Below are some of the topics and questions we cover in the above video. This is an episode of HawkPodcast, datacenterHawk’s viewpoints on the data center industry. If you enjoyed this episode, you can check them all out on our blog. If you’d like to know when we release future episodes, you can subscribe to our channel. 0:00 - Intro 1:20 - Pros and cons of floating data centers. 4:51 - How increasing rack density is changing data center development and sales. 7:35 - Microsoft’s recent announcement of 3 cloud data centers in Athens, Greece. 8:53 - Data center staffing from an IT standpoint. 10:55 - What is the advantage of doing business with a smaller data center (1-5MW) than big players with a 20-100MW+ capacity? How do smaller data centers attract big customers in order to grow? 13:11 - What is the breakdown between public/private companies with leasing? What is the main differentiator between public and private companies? Thank you for watching this video and you have a question about the data center industry, don’t hesitate to reach out to us! You can comment on any of our YouTube videos, message us on LinkedIn (https://www.linkedin.com/company/datacenterhawk), or email us directly at hello@datacenterhawk.com. If you enjoyed this and want to stay up to date with the latest information in the data center industry be sure to sign up for the datacenterHawk newsletter here: https://lp.datacenterhawk.com/stay-up-to-date

Edge data centers continue to expand in Los Angeles as companies seek to keep latency low for their most demanding media customers This is an episode of HawkTalk, datacenterHawk’s series of candid one on one conversations with executives and leaders in the data center industry. If you enjoyed this episode, you can check them all out on our blog. If you’d like to know when we release future episodes, you can subscribe here. Maile Kaiser took some time to sit down with us to discuss the Los Angeles data center market and how the data center industry has changed over time. Below are some of our takeaways from the discussion. The growth of the Los Angeles market While the Los Angeles data center market isn’t one of the largest in the US, it has grown over the past few years. It’s been viewed as a market for edge data centers and a strategic location for customers who need to have their data close to their end-users. But an increase in innovations in the digital technology industry has caused a rise in the need for edge compute, which is part of the reason for the growth in the market. The future of The Los Angeles market Across the data center industry, more companies are going digital than before due to covid - driving the need for more data centers. These companies are seeing technology advance and want to take the opportunity to mature their digital footprints and connect more with their users.  The Los Angeles market has become an area with more edge growth, and with a population of over 10 million people, Maile predicts that reducing latency will continue to be a critical goal for application providers moving forward. Data center industry growth Typically the data center industry has almost been invisible to the wider population. It would work in the background and give access to the applications and tools that everyone uses on a daily basis without anyone knowing that they’re utilizing a data center. The pandemic seems to have brought more visibility to our industry. Technology stepped in to support people’s everyday needs from work to healthcare to education, with data centers being a massive component to supporting these needs. Overall COVID-19 has caused more growth and attention on the data center industry and made larger edge markets, like Los Angeles, more important than ever for faster speeds. Be sure to subscribe to our newsletter to stay up to date on the data center industry.

If you’re short on time, below are some of our thoughts from the above video. 2021 Overview Based on the conversations we at datacenterHawk have had with people in the data center industry, we feel as though 2021 will be a solid year for the market. Ultimately a lot of the growth will depend on larger hyperscale deals being completed, but those companies are looking to add to their footprint all across Northern America and the world. The hyperscale companies that are going to be responsible for the majority of the growth in the industry are looking for flexible deals with data center operators. It’s not just about turn-key capacity anymore. Powered shell and build-to-suit developments are becoming more common. We feel confident that the demand seen in 2020 will continue at least through the first half of 2021. The persistence of the impact of COVID19 as well as the continued growth of secular tailwinds already in place pre-COVID may drive demand through the entirety of 2021. Enterprise demand in 2021 In 2020, enterprise demand was a bit on the lower end than we expected. We think that it will increase in 2021 from where it was in 2020. Many companies delayed IT projects to focus on supporting their employees as they began to work from home. Additionally, financial constraints further constrained directors ability to get funds for IT projects. We believe that even if the COVID pandemic is not fully solved, it has at least stabilized such that these companies will look to reboot in 2021 and start working on previously-shelved IT projects. How will the edge grow in 2021 In 2020 we saw edge-focused partnerships between large data center operators and smaller companies, such as Flexential and American Tower, Digital Realty and Vapor IO, Switch and FedEx. While the edge is still very nascent, these partnerships point to the increasing focus it is becoming among large, traditionally core data center operators. These companies believe there will be a more spread out infrastructure approach with higher demand moving forward. We see these data center operators are positioning themselves to handle that demand when it comes. Expect additional operators to enhance their edge capabilities through new product development or acquisition in 2021. If you enjoyed this and want to stay up to date with the latest information in the data center industry be sure to sign up for the datacenterHawk newsletter here: https://lp.datacenterhawk.com/stay-up-to-date

DATA4 Group CEO, Olivier Micheli shares how they develop and expand into new markets, even in light of recent trends. This is an episode of HawkTalk, datacenterHawk’s series of candid one on one conversations with executives and leaders in the data center industry. If you enjoyed this episode, you can check them all out on our blog. If you’d like to know when we release future episodes, you can subscribe here. DATA4 Group was founded in 2006 and has been a key player in the Paris and French data center markets ever since. After becoming a top data center provider in France, they decided to expand their circle to other European nations. Their CEO, Olivier Micheli, sits down with our lead European analyst to discuss the company and the markets that they’re in. Below are some of our takeaways from the discussion. Growth of the Paris data center market One of the main drivers for the growth in the Paris data center market has been the hyperscale users. Larger users to want to grow in Paris because is there is some catch up happening. Recently other major markets in Europe, namely London, Amsterdam, & Frankfurt, have seen dynamic growth and the hyperscale users see Paris as a market with the same amount of opportunity as those. Developing in Italy, Spain, and Luxembourg Data4 Group has their eyes on expanding to new markets, but they prefer to follow a strategic path and be strong in the markets they’re in before expanding to new areas. This is how they went about their expansion out of Paris. They stayed focused with a goal to become very strong in that market before moving to Italy, Spain, and Luxembourg. Now that they’re in those markets, they want to stay focused in those areas until they are able to build a strong foundation before moving to their next markets. Looking towards Frankfurt Micheli talks about DATA4 Group’s history and their strategy for getting into the markets they’re in now, but he also mentions their future and where the company wants to go moving forward. Frankfurt is one market that’s currently on their radar for its large stable economy and massive connectivity. But they want to follow the same expansion strategy they did the first time around focusing on becoming a top data center provider in their current markets before moving into new markets. It will be interesting to follow DATA4 Group as they continue to grow and we at datacenterHawk look forward to tracking with them and other providers in the European markets. Be sure to subscribe to our newsletter to stay up to date on the data center industry.