| | April - 20188CIOReviewCUSTOMIZABLE DATACENTER SERVICESBy Curt Holcomb, Executive Vice President, JLL-Data Center SolutionsThe data center industry is evolving at a rapid pace. Fortune 1000 companies and new internet-based businesses have continually growing data requirements that are increasing the demand for data center space. This has caused many new colocation providers and Data Center REITs to enter the fray, developing data center environments, primarily colocation space, to stay ahead of demand. The only constant in our industry seems to be change.JLL's recently released Data Center Outlook provides a great in-depth look at the trends impacting major markets across the US, as well as those on the rise.Currently, Fortune 1000 companies are investigating their respective data strategies to decide how much of their data center requirements can transition to the cloud and how much should stay within their existing data centers, whether they be housed in colocation space or owned, on-site facilities.The migration to the cloud, particularly for Fortune 1000 companies, is one of the more crucial discussions we are having with clients every day to insure they achieve their long-term objectives. It's probably the biggest issue that users are having today. Many of these companies are finding that their existing applications were not designed or rolled out "cloud-ready" and may take time, from a development standpoint, to get them in shape for deployment into the cloud. Integrating data and applications into the cloud can require expensive software redesigns that require time and can be very expensive.But that's not hindering the growth of collocation space. In fact, the cloud providers are injecting even more momentum into the colocation industry by taking down large blocks of colocation space to house their cloud operations. We are seeing colocation space supply increase across all major markets, including Silicon Valley, Dallas, Chicago and Northern Virginia.What's been interesting to see is the surge of activity in emerging markets like Atlanta, Denver and Phoenix, with Phoenix and Atlanta seeming to gain significant momentum with new colocation providers coming into their respective markets to satisfy the increased demand from cloud providers and the steadily increasing demand from the Fortune 1000 and internet-based companies.In the major data center markets, activity remains strong, each in their own way.One of the more active markets is Silicon Valley. Most of the colocation providers are located in Santa Clara, and that's due to low energy costs versus the rest of California. The supply is somewhat constrained due to the availability of land to develop a new data centers but it's very strong with a lot of demand. Probably the second biggest data center market in the US is Dallas. Over the last five years, there's been substantial absorption in the Dallas colocation market. Most major colocation providers have established facilities here and they've been very successful in leasing their space. The Dallas market is different than most in that most of the demand seen is from Fortune 1000 companies and less from the cloud providers, which are taking down more space in Chicago and Northern Virginia. Dallas Curt Holcomb
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