JLL: Data Center Demand Could Double by 2021

Tucker, Michael

August 04, 2016

Unprecedented demand for online content and cloud storage services could double the size of the North American data center industry by 2021, said JLL, Chicago.

"Cloud services, digital content and new data sovereignty laws are setting the data center market on fire," said Bo Bond, Central Region Lead with JLL's Data Center Solutions Group. "Demand is historically strong, so the onus is on the data center operators to build space fast enough, while also accommodating shorter, more flexible lease structures that have become highly popular as data strategies have evolved."

Following a spike in new protective data sovereignty laws, JLL's data center report noted that countries have started to regulate where the cloud 'lives.' Data sovereignty means that digital data is subject to the laws of the country where it is stored. Thus, some of the industry's biggest players are expanding globally faster than ever to meet growing demand and regulatory compliance requirements, the report said. 

JLL examined 17 North American data center facility markets. It found: 

• Cloud adoption is racing ahead at "break-neck speed." JLL reported record data center space absorption--274 megawatts--this year. "This is spurring a development surge across the country, especially in markets like northern Virginia," with 1.1 million square feet under construction and a further 2.67 million square feet planned, the report said.

• Data center users are disbursing data across locations. JLL said data center providers and users alike are getting smarter about location planning and load management, while pursuing shorter, more flexible lease structures.  

• From Brazil to Russia, the industry's biggest players are expanding internationally faster than ever to meet growing demand and to help users stay compliant with regulations designed to keep data inside a nation's borders.

• Global climate change is spurring effective energy-efficiency solutions from refrigerant-based cooling systems to more use of data center "micro grids," which allow the center to disconnect from the larger power grid when needed.

"Cloud services will continue to be the primary demand driver in North America," Bond said. "The industry's biggest players are ready for it. They are upping their game with smarter capacity planning and virtualization strategies to meet the growing demand for this very specialized space."

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