Data center and colocation openings pick up the pace in second half of 2019 - report

data center
Data center and colocation openings spike during the second half of 2019, according to research by IHS Markit. (Pixabay)

Data center and colocation construction projects picked up the pace in the second half of this year, according to research by IHS Markit. A total of 9.9 million square feet of data center capacity under construction is expected to open during the second half of this year, according to the IHS Markit | Technology Cloud and Colocation Data Center Building Market Tracker.

By comparison, just 4.7 million square feet will open during the first half of 2020. It comes as no surprise that cloud service providers will account for 56% of those projects, with 37% from colocation service providers and 7% from telcos.

Along the same lines, Synergy Research Group also reported this week that capex spending by the large hyperscale providers was up 8% year-on-year in the third quarter to $31 billion.

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“The strong performance in the second half of 2019 reflects a major spike in activity during the period,” said Alan Howard, principal analyst at IHS Markit, in a statement. “Looking at historic and future data-center construction project estimates, the second half of 2019 will see approximately double the amount of square feet added compared to other periods.

"The second-half spike this year is the product of an unusual deployment-timing phenomenon, driven by cloud-provider projects initiated over the last three years and colocation projects starting during the last six to 18 months."

IHS Markit also reported that Open Compute Project (OCP) data center certification was starting to gain traction less than a year and a half after the program started. Four data centers have earned their certification stripes: Kao Data and Rackspace in London, GIGA Data Centers in Raleigh, North Carolina and Hydro66 in Boden, Sweden.

OCP-compliant equipment is expected to attain a 59% compound annual growth rate from 2017 through 2021. Those companies are expected to earn $6 billion in revenue by 2021 from OCP-compliant products.

“Considering the growth and adoption of OCP-certified equipment, colocation service providers should consider becoming OCP Ready certified, particularly for new data-center builds,” said Howard. “On top of all the benefits of accommodating OCP equipment users, listing on the OCP Marketplace provides exposure to the OCP user market.”

RELATED: Report: OCP storage market will more than double by 2023 to $5.4B

Facebook launched OCP eight years ago as an open-source hardware initiative to drive the deployment of web-scale operations and services. Today, OCP has thousands of engineers from close to 200 member organizations working on more energy-efficient hardware equipment for the likes of hyperscale data centers and large service providers.

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