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Global data centers - ranked

20 Feb 2020

A study released this week from Cushman & Wakefield has revealed the company's ranking of global data centers, with emerging markets delivering a strong showing among industry behemoths.

Once a niche investment and inflexible asset for global enterprises, data centers are now a cornerstone of the information economy, and USD$100 billion has poured into the asset class over the past decade, according to the Cushman & Wakefield report.

This significant capital inflow has been matched by an equally major technical shift, as enterprises have chosen to move workloads off-premises.

This shift has caused the largest cloud platform providers -- Amazon, Google and Microsoft -- to become the most influential players in many markets, altering data center sizing by a factor of 10. 

The 10-megawatt (MW) data center that was impressive 10 years ago now pales in comparison to 30-MW leases now signed with increasing regularity. 

Cushman & Wakefield's study evaluated 1,162 data centers across 38 global markets.

For the top 10 markets -- Northern Virginia, Silicon Valley, Dallas, Chicago, New York/New Jersey, Singapore, Amsterdam, Los Angeles, Seattle and London -- global leaders maintain supremacy. 

Still, emerging markets such as Atlanta, Denver, Dublin, Las Vegas, Phoenix, Portland, Salt Lake City and Vancouver offer compelling alternatives.

Hong Kong, Shanghai and Beijing continue to lead the data center market in Greater China, and now place among the global leaders for market capacity. 

Beijing placed in the top five globally for market size (joining Northern Virginia, London, Tokyo and Silicon Valley) after decades of brisk economic growth have led to a very large market run by a mix of local operators and telecommunication companies. 

Hong Kong – a prime site for global business that has no value-added tax -- is among the top five global markets with the lowest taxes, creating a compelling incentive by itself.

"The speed with which the industry is shifting makes the creation of a data center strategy a complex and daunting task," says Cushman & Wakefield executive managing director and leader or data center advisory group Dave Fanning.

"Enterprises must determine what to do with their on-premises facility, which workloads to move to the cloud and how implement a hybrid IT strategy. 

“Developers and operators require a parcel with robust fiber and access to power as well as a thorough grasp of the permitting process and all risk factors. 

“Investors must be able to assess the long-term potential of a data center to hold its value and how easily it can be upgraded," says Fanning.

“All involved require access to capital and a clear understanding of objectives."

Although the study's top three markets had considerably higher scores than fourth place, the next 12 markets were separated by a final score of less than 10%. 

This close placement represents a new shift toward key secondary areas fast becoming primary markets around the globe.

Several markets throughout Europe -- notably London, Paris, and Milan and Zurich -- have received continued interest from international operators, with the continent becoming a new hyperscale target where power is available.

Large sites have sold recently in emerging U.S. markets such as Portland, Phoenix, and Atlanta, with these areas potentially offering significant savings over locating in California or Northern Virginia.

Additional markets in Asia-Pacific -- especially Sydney, Tokyo, Hong Kong, Beijing, and Shanghai -- also are expecting considerable growth in the next two to three years, with demand for greater connectivity and need for modernization of older assets required. 

"The top markets provide the greatest number of options to the greatest number of perspectives," says Cushman & Wakefield director of research for data center advisory group Kevin Imboden. 

"While one size sometimes fits all, for certain specializations it's important to review and understand the factors most important to the specific requirement and aim accordingly,” says Imboden.

“Combined with those markets that have been overlooked and underutilized, there is great potential for niche development and secondary markets across the globe."