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Data center expansions booming, study shows

The majority of large corporations plan to expand their data center in the next two years, according to a new study commissioned by Digital Realty Trust.

Many companies will expand their data center space this year, due to infrastructure needs, like power, network connectivity and compliance requirements, according to a new survey on data center-related initiatives conducted by Campos Research & Analysis LLC (CR&A) and sponsored by Digital Realty Trust Inc.

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Five out of every six respondents -- more than 80% -- have plans to expand their data centers, according to the CR&A survey of executives at leading corporations in a wide variety of industries throughout North America. Only 15% of survey participants have no plans to expand in the future.

The average company surveyed has between three and four major data centers and nearly 20% operate six or more major data centers, excluding IT closets in branch offices. Of the study participants that are planning data center expansions, 75% plan to expand in at least two locations.

The vast majority of large companies are actively planning data center projects this year or in the next couple of years. One-third of all study participants plan to expand their data centers within the next 12 months, and about 40% of participants are planning expansions over the next 24 months.

The survey identified several data center expansion drivers. Companies planning to expand their data centers cited drivers, like new applications requiring increased computing power, the need for more square footage, disaster recovery initiatives and Sarbanes Oxley compliance requirements, which require additional data center infrastructure. Also, power has become an increasingly important factor in corporate data center planning, as has the need for upgraded cooling systems and better network connectivity, the study shows.

The CR&A findings also show most corporate data centers consist of 10,000-25,000 square feet of raised floor space, and the majority of companies want at least 10,000 square feet, at least 4.1 kW per rack and some level of redundancy.

When study participants were asked to rate factors in selecting a geographical location for their data centers, security was ranked as the most important followed by telecom and accessibility for company personnel. Taxes, labor pool and real estate costs ranked low in importance.

More than half of the respondents plan to use a partner to implement their expansion plans and only 35% are planning to implement the expansion themselves. Nearly half ranked operational reliability as the most important criterion for choosing a partner for data center operations.

"Clearly, there is a trend toward consolidating data centers. Companies with closet-sized data centers are outgrowing them and moving to much larger spaces," said Chris Crosby, senior vice president of sales and technical services at Digital Realty.

Digital Realty's own growth piqued its curiosity about data center expansion trend, Crosby said. When Digital Realty went public in 2004, the company owned 24 properties. In less than three years, it nearly tripled the number of properties in response to demand. Currently, Digital Realty owns over 60 data center properties, comprising more than 11.5 million rentable square feet. Strong demand keeps Digital Realty on a constant search for more markets to build in.

Let us know what you think about the story; email: Bridget Botelho, News Writer

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