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  1. #1
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    [EN] Chicago: A Tale of Two Data Center Markets


    Downtown Chicago, as seen from the 94th floor of the John Hancock Center. The city is one of the nation's major data center markets. (Photo: Rich Miller)

    Rich Miller
    August 16, 2016

    Chicago is one of the nation’s premier markets for data center services, occupying a central place in America’s geography and mission-critical infrastructure.

    The Windy City is a major hub for Internet and financial infrastructure, with active communities of data center users and service providers. Chicago is America’s third-largest city, and an active business market with nearly 40 Fortune 500 companies headquartered in the metro area.

    Chicago is distinctive in that it sees demand for data center space from a wide range of industries. It is home to major trading exchanges for stocks, commodities and options, making the city a hotbed of activity for the financial services industry.

    The region has also become a favored location for hosting, colocation and cloud computing companies. Chicago sees strong demand from the enterprise sector as well, both for primary data centers and as backup/disaster recovery facilities.

    The greater Chicago market is home to more than 1.85 million square feet (SF) of commissioned data center space, representing 210 megawatts (MW) of commissioned power, according to DatacenterHawk, a Dallas-based research firm that tracks the availability of data center space. Demand for space is strong, as reflected in the vacancy rate of just 8.5 percent for the region.

    The Chicago data center market appears poised for growth. Leasing was strong during 2015, with net absorption of 27 MW of capacity. This robust leasing has prompted new construction, with up to 200 MW of additional capacity planned for coming years.

    There are several new players entering the Chicago market, while incumbent providers are adding space to accommodate future demand.



    Chicago is among the regions positioned to benefit in coming years as new technologies drive massive demand for data center space and network capacity. Chief among these trends is the gradual shift of IT capacity from enterprise data centers to web-scale cloud computing platforms, which is already driving historic demand from cloud builders like Amazon, Microsoft and Google.

    Other demand drivers include the growth of “BigData” analytics, the Internet of Things, virtual reality and connected cars. Each of these trends are in their early days of adoption, and will require enormous volumes of data storage and connectivity, positioning the data center industry for growth into the foreseeable future.

    The Greater Chicago data center market consists of two sub-markets with unique characteristics.

    Downtown Chicago

    Downtown Chicago is an urban market with excellent connectivity and a limited amount of space.


    350 East Cermak, the 1.1. million square foot carrier hotel owned by Digital Realty, is a key connectivity hub in Downtown Chicago. (Photo: Rich Miller)

    The downtown data center real estate is focused on “carrier hotels” that lease space to IT and telecom companies, many seeking proximity to the city’s financial trading platforms. The massive. 1.1 million square foot Digital Realty facility at 350 East Cermak has emerged as Chicago’s primary data hub, housing dozens of service providers.

    Downtown Chicago has primarily been a retail colocation market, offering connectivity and interconnection services but few large physical footprints. Space at 350 Cermak and other downtown hubs has been in short supply in recent years, with limited new inventory coming online.

    That’s beginning to change, with several new data center developments underway or on the drawing board. QTS Realty Trust, Inc. (QTS) has just opened a data center in the former Chicago Sun-Times printing plant on South Ashland Avenue. Windstream is the first announced customer for the facility.

    Meanwhile, Ascent is building a new facility on South Desplaines, and 1547 Realty is seeking to purchase the Schulze Banking Company building on the Chicago’s South Side and plans to convert it for mission-critical space.

    Suburban Chicago

    Suburban Chicago is home to a thriving market for wholesale providers and single-tenant data centers. Chicago’s suburbs offer the larger footprints that are difficult to find downtown. Data center development west of Chicago heated up in 2007, when DuPont Fabros and Equinix built huge data centers in Elk Grove Village and Microsoft leased a facility in Northlake to host its cloud services.

    Leasing in the suburban market was initially slow, but soon accelerated with large deals for space by service providers like Rackspace and ServerCentral. Enterprise deals soon followed, notably at the Ascent Corp. site in Northlake. Digital Realty has also made the move to the suburbs with a large campus in Franklin Park.

    In March, the CME Group sold its 428,000 square foot data center in Aurora, which houses its Globex trading platform, to wholesale provider CyrusOne for $130 million. The deal is structured as a sale/leaseback, with CME continuing to operate under a long-term lease. The building includes vacant space, which CyrusOne will seek to lease. This week CyrusOne said it has already pre-leased 2 MW of that space, which is currently under construction.

    The sale/leaseback structure seen in the CyrusOne-CME deal is an increasingly popular way for providers to gain inventory, and market watchers predict there may be more in the pipeline. “There are a couple enterprise users contemplating sale-leasebacks which will further provide additional supply,” reported North American Data Centers.

    For more on the Chicago market, we invite you to download the Data Center Frontier Special Report: The Chicago Data Center Market.


    Kevin Knight
    August 4, 2016

    Great report Rich! Some of us in the Chicago area believe that there are actually 3 distinct markets in Chicago with 350 Cermak being a separate market from the rest of downtown. The design, infrastructure, user base and overall pricing at Cermak are in fact distinctly different than the rest of the downtown market


    http://datacenterfrontier.com/the-ch...center-market/

  2. #2
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    Chicago developers in 'an arms race' to build giant data centers


    Rendering of Digital Realty's planned data center annex at 330 E. Cermak


    John Pletz
    November 12, 2016

    It's not much to look at now, just a patch of dirt at Calumet Avenue and 21st Street, squeezed between McCormick Place and a new basketball arena.

    But developers plan to build a huge data center to complement an older facility across Calumet at 350 E. Cermak Road, one of the biggest server farms in the United States.

    Like the rest of the country, Chicago is enjoying a wave of construction of data centers, the big, nondescript industrial buildings that house the servers that deliver Facebook posts to smartphones, Netflix to TVs and business software to laptops.

    More software and data are shifting to the cloud, moving from companies' own servers and data centers to those operated by Amazon, Microsoft, Google and IBM. The software that companies buy from Oracle, Salesforce.com and Microsoft also is in the cloud. All those Periscope video streams, Instagram photos and Snaps require data center space. So do on-demand music services, like the one recently launched by Amazon, and multiplayer video games.

    "It's an arms race," says Kam Patel, an executive in suburban Minneapolis at CommScope, which provides cabling and other gear for data centers. "Cloud providers want to be close to the population base."

    Increasingly, these companies lease space in big multitenant data centers rather than building their own. Last year, Chicago had the second highest absorption of multitenant data center space by customers of any city in the country, according to real estate brokerage North American Data Centers. The most space was gobbled up by Microsoft, Facebook, Oracle, Jump Trading and Salesforce (see the NADC's PDF).

    The amount of new data center space, measured in megawatts, leased in Chicago more than tripled from 2014 to 2015 to 27 megawatts, according to real estate firm CBRE. Through the first nine months of 2016, it was 37.

    Until now most of the data center activity in the Chicago area has been in the suburbs, where land and other costs are cheaper than in the city.

    That's unlikely to change: Through 2018, suburban data center capacity will grow about 13 percent a year, compared with 4 percent downtown, estimates 451 Research.

    But demand has picked up in the city recently, giving San Francisco-based Digital Realty Trust, which owns 350 E. Cermak and more than 100 other U.S. data centers, the confidence to announce plans to build an expansion.

    • In July, QTS Realty Trust opened a 24-megawatt data center in the former Sun-Times printing plant at 2800 S. Ashland Ave. and quickly signed up three customers, including one of the largest business-software companies, a major institutional investment firm and a connection point for Amazon Web Services. "We're off to a fast start," says Dan Bennewitz, chief operating officer of QTS, based in Overland Park, Kan. "We already have under contract over $6 million in annualized revenue."

    • ServerFarm Realty's data center at 840 S. Canal St. recently leased 2 megawatts to Zayo Group, a large telecom provider based in Boulder, Colo., that will serve a software analytics company.

    • A major data center planned for the South Side, at the former Schulze Baking—at 55th Street and Wabash Avenue, just 5 miles from the Cermak site—has signed up one tenant and is in negotiations with another, says Ghian Foreman, the local lead for the project. He expects to close on financing this month.

    The idea of adding capacity near 350 E. Cermak has been a hot topic among the data center crowd for a decade. Why all the fuss over one facility? It's one of the largest, most high-profile and most expensive data centers in the world because it's so close to the main fiber trunks connecting Chicago to the coasts and to the rest of the world.

    Major telecommunications carriers that provide the backbone of the internet are there, along with other big trading, software and media companies. Even though CME Group moved some of its computers to Aurora in 2012, 350 E. Cermak never saw the drop-off in demand many feared.

    "The building has been effectively 100 percent leased," says Todd Bateman, who leads the North American data center practice at CBRE, which is leasing the planned facility at 21st and Calumet. "No one is suggesting this will be the lowest-cost-to-build data center. The drivers of demand—the internet—are such that the reality becomes that having access to something like this is attractive."

    Still, there are real questions about whether the market is strong enough to support all the planned expansions. The new facility across from 350 Cermak would add as much as 54 megawatts and 660,000 square feet of space. The former Sun-Times printing plant will add up to 24 megawatts and 320,000 square feet when it's finished. And because it's being built from scratch, the new data center at 21st and Calumet could require more than double the $100 million investment needed to convert the former R.R. Donnelley printing plant at 350 E. Cermak.

    "The market is healthy," says Avner Papouchado, CEO of ServerFarm Realty, who has leased about one-third of 840 S. Canal since he acquired it five years ago. "There's still a lot of space downtown to absorb."

    http://www.chicagobusiness.com/artic...UE01/311129993

  3. #3
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    Will enterprises all soon be relying on the same few hyperscale data centers?

    Cisco projects that a mere 485 data centers will be handling close to half of the world's workloads and data in a few years.

    Joe McKendrick
    November 14, 2016

    By 2020, a good chunk of the enterprise computing world will be relying on a grand total of 485 data centers across the globe to handle their workloads.

    That's the call from Cisco, which just released its latest stats on current and future data center traffic for the world.

    The bottom line is cloud computing is really turning the IT market upside down and shaking out all its loose parts. There's a great deal of efficiency and economies of scale in making used of shared services that are commodity in nature. In fact, the Cisco analysis holds, a lot of it will come down to 24 hyperscale operators that aren't necessarily data centers in their own right -- they "might own the data center facility, or it might lease it from a colocation/wholesale data center provider," according to the report's authors.

    These hyperscale data centers will grow from 259 in number at the end of 2015 (the latest full year data is available) to 485 by 2020. They will represent 47% of all installed data center servers by 2020. "In other words, they will account for 83% of the public cloud server installed base, and 86 percent of public cloud workloads," the Cisco analysts add.

    The authors of Cisco's latest data center traffic report project that within three to four years, 92 percent of workloads will be processed by cloud data centers -- versus only eight percent being processed by traditional data centers.

    Is this a good thing, to have so many enterprises relying on so few for their applications and infrastructure? Look at it this way: the rise of packaged software in the 1990s resulted in reliance on a core group of software vendors, such as Microsoft, Oracle, IBM and SAP. Again, there are many functions that can be commoditized and don't need to be re-invented a million times across enterprises.

    The real value is what gets built or configured on top of those packages. The success of the business doesn't come from technology itself, but how inspired and forward-thinking management can use that technology to the benefit of customers and employees alike. Plus, with the rise of big data and all things associated with it -- analytics, Internet of Things, security threats -- things are only getting more complicated, requiring scale and expertise that many enterprises simply can't afford on their own.

    The Cisco report estimates that globally, the total amount of data stored in data centers will quintuple by 2020 to reach 915 exabytes by 2020, up five-fold 171 exabytes in 2015. Big data will account for 247 exabytes by 2020, up almost 10-fold from 25 exabytes in 2015. Big data alone will represent 27 percent of data stored in data centers by 2020, up from 15 percent in 2015.

    The Cisco report notes that a lot of the traffic is increasingly coming from big data and all things associated with it. "The growing importance of data analytics--the result of big data coming from ubiquitously networked end-user devices and IoT alike--has added to the value and growth of data centers," the report's authors observe. "The efficient and effective use of data center technology such as virtualization, new software-based architectures, and management tools and use of public vs. private resources and soon can all add to the agility, success, and competitive differentiation of a business."

    By the way, Cisco provides a definition of what it considers to be "hyperscale" provider:

    • "More than $1 billion in annual revenue from Infrastructure as a Service (IaaS), Platform as a Service (PaaS), or infrastructure hosting services"
    • "More than $2 billion in annual revenue from software as a service (SaaS)"
    • "More than $4 billion in annual revenue from Internet, search, and social networking"
    • "More than $8 billion in annual revenue from e-commerce/payment processing"


    Currently, the report notes, 24 hyperscale operators meet the preceding criteria.

    http://www.zdnet.com/article/will-en...-data-centers/
    Última edição por 5ms; 16-11-2016 às 23:22.

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