MULTI-TENANT DATACENTER SUPPLY 2011 DATACENTER REPORT BY JASON SCHAFER JANUARY 2011 2011 TIER1 RESEARCH & THE 451 GROUP DATACENTER
Tier1Research Better perspective from the top in independent tech research REPORT SNAPSHOT TITLE Multi-Tenant Datacenter Supply 2011 ANALYST Jason Schafer, Senior Analyst, Datacenters RELEASE DATE January 2011 LENGTH 72 pages ABOUT THIS REPORT The Multi-Tenant Datacenter Supply Report 2011 gives readers an overview of the multitenant datacenter market. In this report, multi-tenant datacenters (referred to in previous Tier1 Research reports as Internet datacenters ) are considered multi-customer colocation and wholesale facilities. Single-user enterprise datacenters, single-tenant datacenters and carrier hotels are specifically excluded from this analysis, although colocation and hosting facilities that lease space in carrier hotels are included. The intended audience for this report includes: Colocation and wholesale datacenter providers assessing market and expansion opportunities. Financial professionals considering investments in datacenter properties and companies. Real estate and planning professionals interested in primary market analysis of the multi-tenant datacenter space. Enterprises moving to outsourced datacenter providers. This report was last published in September 2010; the 2011 report provides current supply, demand and utilization metrics, as well as updates to market-specific analyses near the conclusion of 2011 for what Tier1 Research qualifies as the top six US markets (Silicon Valley, Los Angeles, Dallas, Chicago, northern Virginia and New York) and the top four European markets (London, Paris, Amsterdam and Frankfurt). Estimated datacenter market sizes and geographical business snapshots are included for US markets only; Asia and Europe will be included in future versions of this report. TIER1 RESEARCH: DATACENTER
COMPANIES INCLUDED IN THIS REPORT 365 Main Cologix Dallas Global Crossing ABRY Partners AIMS Asia Group Amazon American Internet Services Ark Continuity ASB Capital Management Ascent AT&T Base Partners Bharat Sanchar Nigam Ltd (BSNL) BT Group Cable & Wireless Cequel Cervalis China Telecom China Unicom ChinaCache Cincinnati Bell Clearview Clearview International Colo4Dallas Colt Technology Services Group CoreSite Corporate Office Properties Trust CSF Group Cyberverse CyrusOne DCI Technology Partners Demand Media Digital Realty Trust Diveo Broadband Networks DuPont Fabros ebay enom Equinix e-shelter Facebook FiberMedia Fortune Data Centers Fujitsu General Atlantic Global Switch Google Horizon Data Center Solutions Hurricane Electric i/o Data Centers iadvantage IP Converge Infinity Internap Network Services Interoute Interxion JRM Technology KDDI KT Latisys LeaseWeb Level 3 Communications MESH GmbH Microsoft NaviSite Net2EZ MULTI-TENANT DATACENTER SUPPLY 2011
Tier1Research Better perspective from the top in independent tech research COMPANIES INCLUDED IN THIS REPORT Next Generation Data Savvis Terremark NEXTDC Sentinel Data Centers The Bunker Nippon Telegraph and Telephone (NTT) NREA NTT Verio Oak Hill Pacnet PCCW Peak 10 PEER 1 Sentrum Server Farm Realty ServerVault Sidera Networks Sify Singapore Telecommunications Skyrise Properties SoftLayer The Planet Vantage Data Centers Verizon Business ViaWest Virtus Data Centres VMware Wolverine Trading XO Communications Pelio & Associates Stephens Group Power Loft Stream Data Centers Primus SunGard Q9 Networks Swisscom Quality Technology Services (QTS) Qwest RagingWire Reliance Communications Rock Financial Partners Rockwood Capital Sabey Tata Communications TelecityGroup Telefónica Telkom SA TELMEX Telstra Telvent Telx TIER1 RESEARCH: DATACENTER
TABLE OF CONTENTS INTRODUCTION AND METHODOLOGY 1 DEFINITIONS AND TERMINOLOGY.................. 3 DERIVATION OF SUPPLY AND DEMAND METRICS............ 4 EXECUTIVE SUMMARY...................... 5 OVERALL DATACENTER DEMAND/SUPPLY 7 FIGURE 1: Multi-Tenant Datacenter Supply and Demand Global..... 8 FIGURE 2: Multi-Tenant Datacenter Utilization Global........ 9 UTILIZATION THRESHOLDS..................... 10 PRICING............................ 10 FIGURE 3: Wholesale and Colocation Pricing Dynamic........ 11 FINANCING DATACENTERS IMPACT AND ANALYSIS 12 FIGURE 4: Datacenter Colocation Capex Analysis (Annual).......13 FIGURE 5: Datacenter/Colocation Capex Analysis (Yearly Halves).....14 DATACENTER AND COLOCATION IPO CANDIDATES 16 DATACENTER AND COLOCATION M&A ACTIVITY 17 FIGURE 6: Datacenter/Colocation M&A Deal Volume by Quarter.... 17 MULTI-TENANT DATACENTER TAXONOMY 19 MULTI-TENANT DATACENTERS.................. 19 COLOCATION.......................... 19 WHOLESALE DATACENTER..................... 20 INTERCONNECTION........................ 20 MANAGED HOSTING...................... 20 MULTI-TENANT DATACENTER PROVIDERS 22 FIGURE 7. Multi-Tenant Datacenter Provider Services Mix...... 22 MULTI-TENANT DATACENTER SUPPLY 2011
Tier1Research Better perspective from the top in independent tech research FUTURE DATACENTER MOTIVATORS 25 SPEED TO MARKET........................ 25 REDUCED COST......................... 26 INCREASED RELIABILITY...................... 27 EFFICIENCY........................... 28 FIGURE 8. Efficiency Improvement Quantification......... 28 TOP GLOBAL MULTI-TENANT DATACENTER MARKETS 30 FIGURE 9: Top Global MTDC Markets............. 30 SILICON VALLEY......................... 32 FIGURE 10: Silicon Valley Population & Business Synopsis......33 FIGURE 11: Silicon Valley MTDC Pipeline............33 FIGURE 12: Multi-Tenant Datacenter Supply and Demand Silicon Valley..34 FIGURE 13: Multi-Tenant Datacenter Utilization Silicon Valley.....34 NEW YORK CITY METRO...................... 35 FIGURE 14: New York Metro Population & Business Synopsis.... 36 FIGURE 15: New York Metro MTDC Pipeline.......... 36 FIGURE 16: Multi-Tenant Datacenter Supply and Demand New York City Metro.................37 FIGURE 17: Multi-Tenant Datacenter Utilization New York City Metro.. 37 NORTHERN VIRGINIA....................... 38 FIGURE 18: Northern Virginia Population & Business Synopsis.....39 FIGURE 19: Northern Virginia MTDC Pipeline...........39 FIGURE 20: Multi-Tenant Datacenter Supply and Demand Northern Virginia................. 40 FIGURE 21: Multi-Tenant Datacenter Utilization Northern Virginia....40 DALLAS METRO......................... 41 FIGURE 22: Dallas Metro Population & Business Synopsis..... 42 FIGURE 23: Dallas Metro MTDC Pipeline............42 FIGURE 24: Multi-Tenant Datacenter Supply and Demand Dallas Metro..43 FIGURE 25: Multi-Tenant Datacenter Utilization Dallas Metro.... 43 TIER1 RESEARCH: DATACENTER
CHICAGO METRO......................... 44 FIGURE 26: Chicago Metro Population & Business Synopsis......45 FIGURE 27: Chicago Metro MTDC Pipeline............45 FIGURE 28: Multi-Tenant Datacenter Supply and Demand Chicago Metro...................46 FIGURE 29: Multi-Tenant Datacenter Utilization Chicago Metro.....46 LOS ANGELES METRO....................... 47 FIGURE 30: Los Angeles Metro Population & Business Synopsis.... 48 FIGURE 31: Los Angeles Metro MTDC Pipeline.......... 48 FIGURE 32: Multi-Tenant Datacenter Supply and Demand Los Angeles Metro................ 49 FIGURE 33: Multi-Tenant Datacenter Utilization Los Angeles Metro... 49 EUROPEAN DATACENTER MARKET 50 LONDON............................ 52 FIGURE 34: London MTDC Pipeline............. 53 FIGURE 35: Multi-Tenant Datacenter Supply and Demand London... 54 FIGURE 36: Multi-Tenant Datacenter Utilization London...... 54 PARIS............................. 55 FIGURE 37: Paris MTDC Pipeline...............55 FIGURE 38: Multi-Tenant Datacenter Supply and Demand Paris.... 56 FIGURE 39: Multi-Tenant Datacenter Utilization Paris........56 FRANKFURT........................... 57 FIGURE 40: Frankfurt MTDC Pipeline............. 57 FIGURE 41: Multi-Tenant Datacenter Supply and Demand Frankfurt...58 FIGURE 42: Multi-Tenant Datacenter Utilization Frankfurt...... 58 AMSTERDAM.......................... 59 FIGURE 43: Amsterdam MTDC Pipeline.............59 FIGURE 44: Multi-Tenant Datacenter Supply and Demand Amsterdam. 60 FIGURE 45: Multi-Tenant Datacenter Utilization Amsterdam......60 MULTI-TENANT DATACENTER SUPPLY 2011
Tier1Research Better perspective from the top in independent tech research CARBON REDUCTION COMMITMENT (CRC) ENERGY EFFICIENCY SCHEME 61 SCOPE OF CRC.......................... 61 TABLING CONCERNS...................... 62 THE COST TO DATACENTERS................... 62 TIMELINES AND DEADLINES................... 63 CRC FAULTLINES THE IT VIEW................... 63 THE CCA ULTIMATUM....................... 63 IMPLICATIONS.......................... 64 CLOUD IN CONTEXT 65 INTRODUCTION TO THE CLOUD.................. 65 CLOUD STACK.......................... 66 CLOUD IN 2011.......................... 68 CONCLUSIONS AND EXPECTATIONS 70 DATACENTER MODULARITY..................... 70 DATACENTER OPERATIONAL EFFICIENCY............... 71 ASIA-PACIFIC REGION PROVIDES GREATEST GROWTH POTENTIAL...... 71 EMERGING NORTH AMERICAN MARKETS.............. 72 OTHER TRENDS......................... 72 TIER1 RESEARCH: DATACENTER
ABOUT TIER1 RESEARCH Tier1 Research covers consumer, enterprise and carrier IT services, particularly hosting, colocation, content delivery, Internet services, software-as-a-service and enterprise services. Tier1 s focus is on the movement of services to the Internet what they are, how they are delivered and where they are going. ABOUT THE 451 GROUP The 451 Group is a technology analyst company. We publish market analysis focused on innovation in enterprise IT, and support our clients through a range of syndicated research and advisory services. Clients of the company at vendor, investor, service-provider and end-user organizations rely on 451 insights to do business better. 2011 The 451 Group, Tier1 Research and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication, in whole or in part, in any form without prior written permission is forbidden. The terms of use regarding distribution, both internally and externally, shall be governed by the terms laid out in your Service Agreement with The 451 Group, Tier1 Research and/or its Affiliates. The information contained herein has been obtained from sources believed to be reliable. The 451 Group and Tier1 Research disclaim all warranties as to the accuracy, completeness or adequacy of such information. Although The 451 Group and Tier1 Research may discuss legal issues related to the information technology business, The 451 Group and Tier1 Research do not provide legal advice or services and their research should not be construed or used as such. The 451 Group and Tier1 Research shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice. Analyzing the Business of Enterprise IT Innovation MULTI-TENANT DATACENTER SUPPLY 2011