Data Center Spending Is Off The Charts This Year
Investment in U.S. data centers grew to $18.2 billion in the first half of this year, more than double the amount spent in all of 2016, according to a new report. The total includes money spent on building or buying data centers,
This dollar figure tracked by commercial real estate firm CBRE, shouldn’t shock anyone familiar with the aggressive data center construction by companies like Amazon (AMZN), Google (GOOGL), and Microsoft (MSFT).
But the growth is not all about these large cloud providers who manage their own massive data center farms and rent computing power, storage, and networking to customers. The spending total also includes the money companies spend on their own data centers.
Many Fortune 500 and other companies now continually weigh whether they should use their own leased or owned data centers or opt to move more of their computing to cloud data centers run by one of the cloud giants. Whatever the case, overall spending on data centers construction was huge in the first six months of this year.
“Over the past five years, more than $45 billion of investment capital has flowed into the data center sector, with more than 50 percent of that total occurring since the start of 2016,” Pat Lynch, senior managing director of data center solutions for Los Angeles-based CBRE, (CBG) said in a statement. “The robust adoption of rapidly evolving, data-intensive technology continues on a strong upward trajectory and will drive growth in the data center sector going forward.”
If this trend continues through year’s end, total data center investment in 2017 will surpass the total of the last three years combined, according to CBRE.
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Data centers tend to be built in areas that are either close to cheap power or to a big concentrations of users—and in a perfect world both. In this country, the biggest concentrations of data centers are in or near Atlanta, Chicago, Dallas/Ft. Worth, the New York Tri-State area, Northern Virginia, Phoenix and Silicon Valley.