Cloud Growth Spurs Demand for Data Centers

The growth of cloud computing is prompting increased demand for data center space in North America, according to a survey commissioned by Digital Realty. The growing interest in cloud adoption, along with the resumption of planned expansions that were deferred due to the economy, suggests robust growth ahead for the U.S. data center industry.

Ninety two percent of IT decision makers at large companies said they will "definitely or probably" expand their data center footprint in 2012, the highest number in the six-year history of the survey by Digital Realty, which is the largest operator of data center facilities. By comparison, 70 percent of respondents said they had expanded their data center operations over the past two years, suggesting

An intriguing data point: 41 percent of companies that are adding space reported plans to use a containerized module as part of their expansion, suggesting that a growing number of companies are open to deployments that use modular designs to house either IT capacity or power and cooling infrastructure.

Customer Sentiment Improving

The survey, conducted by Campos Research, included 300 IT decision makers at large corporations in North America with annual revenues of at least $1.0 billion and/or at least 5,000 employees. It’s not surprising that Digital Realty believes demand will be high, since the company is in the business of building and leasing data centers. But the findings are useful in tracking customer sentiment about their requirements for data center space.

"These results are consistent with what we are seeing with our customers across our portfolio," said Michael Foust, Chief Executive Officer of Digital Realty. "There are a number of factors that we believe are driving the increase in demand for data center space as reported in the survey. These include the continued adoption of public, private and hybrid cloud computing solutions, pent up demand from enterprise customers that had deferred expansion plans in previous years due to economic uncertainty, an improved economic outlook, and the proliferation of data requiring appropriate computing and storage environments."

The survey results provided some hints at the scope and breadth of customer expansion plans for 2012:

The most frequently cited locations for expansion in the U.S. include, in order, New York/New Jersey, Chicago, Los Angeles, Dallas, San Francisco Bay Area and Phoenix.