Press And Media

The North American Data Centre market is the largest in the world, with over 66 million square feet of raised floor Data Centre space as of the end of 2014 with pricing set to benefit from cloud and “content to the edge” services - new TCL report finds

Published: Wed 5 November 2014

3^rd November 2014, London – A new report from TCL (Tariff Consultancy Ltd) analyses the key pricing and capacity trends for the Data Centre market in North America. Called North American Data Centre Pricing 2014 to 2019, the report is the first to be published by TCL on the region.

The report is based on in-depth analysis of 338 Data Centre providers across North America with over 1,100 Data Centre facilities across the region. North American Data Centre facilities vary enormously in size and price point with individual wholesale providers having over 1 million square feet of space with sharply reduced rates and local colocation providers having facilities of 1,000 square feet or less serving a specific area.

The new TCL report identifies the key overall Data Centre capacity and price trends in theUSA&Canada, and also segments the market into three provider segments including - Local Colocation, National Retail and National Wholesale Data Centre segments. The report finds that each of these three Data Centre segments has its own characteristics and serves its own user community with distinct products and pricing strategy, as shown below:

The Local Colocation Data Centre segment – provides individual rack space for SMEs, content and Telecom Providers serving a local geographical area as a single or regional facility provider. It offers competitive average individual rack space pricing, which is suited to a particular area and facility.

The National Retail Data Centre segment – provides a mixture of bundled services with rack space, typically with a national footprint, offering cloud or cloud interconnect services. It offers bundled pricing with power access, IP and power consumption bundled into a higher average price per rack space, square foot or per kW rate. Average pricing can vary extensively according to the power bundle or facility used.

The National Wholesale Data Centre segment – provides large scale Data Centre space – including data halls, complete facilities and “build to suit” facilities for large enterprises, content or Telecom Providers. Average pricing is typically based on a customized deal in square feet or per kW of power, with discounts of 40 to 60 per cent available when compared with average retail square foot or per kW rates.

The TCLNorth AmericaData Centre – 2014 to 2019 report also provides a brief profile of 27 key Data Centre providers, who together account for 65 per cent of total third party Data Centre raised floor space in the region as of the end of 2014.

The report also provides a unique 5 year forecast – from the end of 2014 to the end of 2019 – for both the overall Data Centre market and average pricing (including average per square foot, rack space & per kW pricing) in total and by each of the three core Data Centre segments.

The report finds that significant new Data Centre space will continue to be added in regions such as Northern Virginia,Las Vegas,New Jersey&Sacramento. The new capacity is to have an impact on average Data Centre prices in these regions. Northern Virginia (Ashburn) in particular is projected to see a sharp increase in supply from new facilities from Data Centre providers including DRT (Digital Realty Trust), DFT (DuPont Fabros Technology), RagingWire and Equinix.

Although there remains considerable variation between individual Data Centre facility and region pricing in the survey, average overall Data Centre pricing in North America will remain relatively stable and is set to increase in the range of 1 to 3 per cent per annum - depending on Data Centre segment.

The TCL report also identifies the key commercial trends driving Data Centre development in North America as the sector matures, including –

The rise of the Modular Data Centre – with new providers such as IO providing self-contained modular facilities which can be activated rapidly for specific customer demand as a low cost option,

The merging of Wholesale & Retail Data Centre facilities – with selected Wholesale Data Centre providers bundling space and power to meet high-end retail customer requirements - attracted by the higher price points per square foot from enterprise users,

More consolidation is taking place in the Data Centre sector – with Telecom Providers in particular bolstering their presence in the cloud & hosting segments through the acquisition of Data Centre specialists,

New investment in so-called Tier 2 city Data Centre facilities – with providers such as 365 Data Center identifying smaller markets as higher margin opportunities as local users - in cities such as Nashville - require cloud, Telecom Provider & Cloud connectivity – as new Data Centre facilities are spread to the edge.

The report discovers that power for the Data Centre facility inNorth Americais becoming a critical issue. Energy costs in the United States can vary by as much as 3-times from state to state, with Data Centre providers in high cost states - such as California – having to adopt new technology to provide energy conservation measures for their facilities as an essential customer feature.

Finally, the report highlights how North American Data Centre facilities are being recognized as a crucial factor in economic development. An increasing number of US states and city administrations are now offering tax incentives to Data Centre providers and their customers as an incentive for new investment and employment, with the rebate of sales tax from the cost of IT equipment being the most common incentive for new investors.

About the TCL North America Data Centre Pricing 2014 to 2019 report – The TCL North America Data Centre Pricing 2014 to 2019 report provides a unique analysis of the market based on 338 Data Centre providers and 1,171 facilities from the end of 2014 to the end of 2019. It provides overall capacity and average pricing as well as capacity & average pricing by the 3 key Data Centre segments of Local Colocation, National Retail and National Wholesale Data Centres as a 5 year forecast from the end of 2014 to the end of 2019. The report costs GBP £2,495 for a single user licence. More information about the TCL North America Data Pricing 2014 to 2019 report click here:

About TCL (Tariff Consultancy Ltd) – TCL is an international telecoms pricing research & consultancy organization based in London. TCL has published Data Centre pricing analysis since 2007 with the publication of the TCL Data Centre Price Tracker subscription service has further developed its own Data Centre pricing database which currently includes over 1,100 Data Centre providers with 2,600 facilities in 51 countries worldwide. More information about TCL’s Data Centre services can be found at: www.datacentrepricing.com