With a saturation point hovering in the horizon for most of the biggest data center markets, the focus has now shifted to other areas where there is great potential. Data center service providers are perplexed by the problem of oversupply in the busy metros. With nearly all the hyper-scale cloud platforms already being served, data center service providers are now looking for greener pastures.
Mushrooming Data Center Colocation Facilities
What with the remarkably high and explosive mushrooming of data center colocation facilities in recent years, the almost insatiable demand for data center capacity from very large scale operators like Amazon (AWS) Google Cloud, Microsoft Azure has somewhat toned down. There are instances of excess capacity being leased in some of the biggest markets around Northern Virginia and Dallas, which they need to use up before thinking of leasing more. Of course, some of them opt to construct their own data center facilities.
Untapped Data Center Business in Russia
The good news for those in data center colocation business is that there are a lot more areas in the world that are yet to witness the deluge from hyperscale cloud infrastructure services. There are still virgin markets in Russia, especially Moscow and Budapest, which are big markets that need exploring for data center capacity. These markets will certainly be captured by large data center colocation players in the near future. Operators need to think of expansion at global levels and focus on the densely populated metros, to start with.
Digital Realty takes the lead in Brazil
Did you know that Digital Realty made an entry into Brazil by paying a whopping $1.8 billion to acquire Ascenty? The Brazil-based company has been catering to leading global hyperscale could platforms, and Digital Realty is now poised to be a dominant player in this hyperscale data center business. The takeover is to happen smoothly as Digital has tied up with a leading investor in the infrastructure field. This joint venture will ultimately own Ascenty through the trust. This massive deal is expected to be completed towards the end of this year and the San Francisco-based Data Center player is poised to lease mammoth data centers to huge cloud players in the market.
Massive Capacity of Ascenty to be enhanced
Ascenty currently owns data centers across Brazil in locations like Sao Paulo, Fortaleza, Campinas and Rio de Janeiro. There are plans to add 34MW (under construction) to the existing 40MW which still leaves enough infrastructure that can accommodate an additional 33MW. For Digital Realty, this is its first foray into Latin America though it already has data centers spread across, North America, Asia Pacific and Europe.
Part of the activities is to be funded by Brookfield Asset Management through its affiliate Brookfield Infrastructure. With Brookfield investing close to $650 million, it will hold 49 percent of the equity, with the balance 51 percent being held by Digital Realty. Surprisingly though, Digital’s stock dipped sharply by 4% soon after the news was out when it was trailing at $115.92. Things look much better now with the current prices hovering at $132.98.
DataCenterandColocation is a free professional and non-bias service provided to clients for selecting the right data center, colocation, managed hosting or cloud facility for their requirements. DataCenterandColocation is one of the largest colocation site consulting firms in the United States. They represent approximately 3000 data centers and colocation centers in the United States and Canada. At no cost to clients, they identify specific space, location, power and security requirements, solicit proposals, professionally analyze the responses, compare the strengths and weaknesses of each facility, negotiate to price and deliver highly competitive bids for colocation. They also perform a comparative analysis of in-house vs. design-build services, wholesale data center space, and data connectivity.