are bay area colocation providers attracting enough capital? (slideshare)

Are Bay Area Colocation Providers Attracting Enough Capital?

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As more and more companies move into the area to be closer to their data centers,

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the urgent need for more investment in colocation centers will continue to grow

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Supply vs. Demand Issues

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This high demand for Bay Area colocation has a direct impact on price

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with rents ranging from $125 to $165 per kilowatt each month and expected to get even higher

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This phenomenon can be attributed to “server hogging”

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or companies choosing to go with the Bay Area because it’s closer to them and reduces latency

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Who is Attracted to the Area?

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Those attracted to investing in the Bay Area, for the most part, are local firms and Chinese Internet companies

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As the demand from corporate clients changes,

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Bay Area colocation providers will need to adapt and offer various levels of redundancy (2N, N+1, and N)

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As office real estate becomes increasingly unaffordable,

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a lot of companies are trying to reduce office space by hosting their IT labs at outsourced data centers

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However, all these changes in the market are driving growth and attracting capital in the Bay Area

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Who is Making an Impact?

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According to the Silicon Valley Business Journal, the biggest players in the area are as follows:

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• CenturyLink Inc.

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• CoreSite Realty Corp.

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• Digital Realty Trust Inc.

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• DuPont Fabros Technology Inc.

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• Equinix Inc.

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These companies have been attracting significant amounts of capital to expand and to try to meet the demand

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However, at the present time Bay Area data centers are nowhere near their goal and it doesn’t look like it will change in the near future

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Although there has been a lot of investment, it is simply not enough for supply to match the enormous demand

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Has your company outsourced to a Bay Area data center?

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Let us know about your experience in the Comments box below

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