Colocation or third party-leased Data Centres are specialized projects where servers, equipment, managed space and bandwidth are available on rent to wholesale or retail customers who are in need of such customized solutions. Such types of Data Centres have become very popular among fast-growing companies which operate Internet-based businesses and are driving the growth of this industry.
Colocation Data Centres bring various inherent benefits:
The third-party Data Centre market is growing exponentially both internationally and in India. As per a recent report from 451 Research, the annualized revenue of the Data Centre colocation market is projected to reach $36 billion worldwide by end of 2017. At present, this market is worth around $25 billion.
If we analyse the industry, around 75% of the generated revenue comes from local providers, but there is also constant consolidation happening in this sector. An approximate 40 million square feet will be added to the global Data Centre market by the end of 2017 – and interestingly, a significant part of this will come in Asia Pacific region, which presently contributes around 25% of the global market.
Data Centres – The Real Estate Story
Obviously, the exponential growth of the Data Center industry offers an excellent opportunity to the real estate and construction industry. To understand this opportunity, it is important to envision the scope of a typical Data Center set-up. We are talking about a large facility which has a well-controlled and secured environment, housing high-capacity computer systems, telecommunication lines and systems with adequate redundancies to promise uninterrupted working environment.
While some companies will be able to develop their own data centers, many will follow the third-party or Colocation Data Center route. The level of back-ups and provision required for a tier 3 Data Centre setup is 99.982% capacity, effectively allowing maximum 1.5768 hours downtime in a year. Tier 4 setups call for 99.995% capacity, which allows maximum 0.438 hours downtime in a year. In both these categories of Data Centres, the requirements are extreme and therefore create demand for technology, products, infrastructure and people.
Data Centers are also extremely high power consumption zones, having dense arrays of computer and telecommunication systems and equally dense cabling. For this reason, Data Centers need well-planned sturdy buildings, multiple fiber lines for Internet and a large amount of equipment associated with power supply, cooling systems, fire extinguishing and building management systems.
This obviously provides a very good – though intensely focused – opportunity to developers of such buildings and infrastructure, specialized equipment suppliers as well as contractors and consultants:
The Indian construction industry is quite capable of delivering on all these fronts, but there is a strong need for discussion forums, education and deeper understanding of technology and quality levels from facilities across the globe so that we can match and perform to global benchmarks.
The colocation or 3rd-Party Data Centres industry faces challenges on multiple fronts:
Obviously, premises where Data Centres can be developed are very limited. Moreover, if the building has to be developed from scratch, the overall project timelines are considerable.
JLL India’s Data Centre Expertise
As a global pioneer in real estate solutions, JLL India provides an end-to-end approach to building, running and upgrading Data Centre developments. This approach includes services for land or premises acquisition based on specific client requirements, project management during development stage and facilities management of the completed Data Centre.
As already outlined, a Data Centre project requires meticulous project planning, design coordination, management of multiple supplier and contractors. JLL’s project management team supports such requirements, along with a strong focus on processes that drive quality, safety, cost control and timely completion of the project.
Authored By: Piyush Gandhi, National Director – Project & Development Services, JLL India
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