Business is booming for data center build-outs: report

data center
The build out of data centers grew by 4.6% in the first half of this year, according to IHS Markit's recent report. (Pixabay)

Driven in part by growth in Europe, the Middle East and Africa, deployed data center capacity grew 4.6% globally in the first half of 2018 compared to the second half of 2017, according to an IHS Markit report.

The biggest growth occurred across Europe, the Middle East and Africa with an 8.2% increase in the first half of 2018 over the previous half-year. North America grew at 4%, followed by Asia-Pacific (APAC) at 3%. By contrast, growth in the Caribbean and Latin America (CALA) was flat, according to IHS Markit's report.

IHS Markit projects that data center growth will continue at this same pace until the middle of 2021.

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With 60% deployed capacity, due in large part to hypserscalers such as Google, Facebook and Amazon Web Services, North America leads all global regions followed by EMEA (21%), APAC (18%) and CALA (1%).

While the cloud, 5G services and IoT are usually cited as the reasons for the continued growth of data centers, IHS Markit said another factor was that service providers of various stripes have gotten better at building them. All told, 49 new buildings were brought online, with 4.4 million square feet of capacity, in the first half of this year.

“Repeatable processes, reusable designs, standardized infrastructure architecture and a close working relationship with infrastructure equipment suppliers drive just-in-time data center capacity delivery,” said Alan Howard, senior analyst at IHS Markit, in a prepared statement.

As for the first half of this year, the average data center building capacity was 121,000 square feet. The average capacity by segment is 172,000 square feet for cloud service providers, 139,000 square feet for colocation service providers, 114,000 square feet for telco service providers and 80,000 square feet for the privately owned segment.

RELATED: Google, Amazon lead the way on new data centers in 2018

While the hyperscale providers hold down vast data center footprints in Northern Virginia and other areas across the United States and Europe, less than one-quarter (21.8%) of the total owned data-center building capacity is owned by cloud service providers. By contrast, 45.8% of the data-center building capacity is owned by colocation service providers. With 5G and IoT ramping up, colocation data centers are becoming the focal point for enterprises, service providers and cloud carriers

Telcos own close to 10% of the data center building capacity while 22.5% is privately owned, according to IHS Markit.

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