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Page 1: Siiconl Valley Data Center Market - Enterprise Data Center ... Silicon Valley Data Center Mark… · Silicon Valley Data Center Market TrendsinDemand Silicon Valley is a market of

brought to you by

Silicon Valley Data Center Market

Special Report

Page 2: Siiconl Valley Data Center Market - Enterprise Data Center ... Silicon Valley Data Center Mark… · Silicon Valley Data Center Market TrendsinDemand Silicon Valley is a market of

© 2019, Data Center Frontier 2

SPECIAL REPORTSilicon Valley Data Center Market

ABOUT DATA CENTER FRONTIER

http://datacenterfrontier.com

Data Center Frontier charts the future of data centers and cloud computing. We write about what’s next for the Internet and the innovations that will take us there. The data center is our prism. We tell the story of the digital economy through the facilities that power the cloud and the people who build them. In writing about data centers and thought leaders, we explain the importance of how and where these facilities are built, how they are powered, and their impact on the Internet and the communities around them.

Data Center Frontier is edited by Rich Miller, the data center industry’s most experienced journalist. For more than 15 years, Rich has profiled the key role played by data centers in the Internet revolution.

ABOUT DATACENTERHAWK

http://www.datacenterhawk.com

datacenterHawk is a technology company located in Dallas, TX. We strive to create industry-leading products that enable customers to make confident decisions in the data center market.

The Hawk Product Suite is designed to help customers locate, evaluate, and analyze data center solutions quickly. Hawk Search, Compare, Zoom, Financials, Swap and Insight are available through subscription only.

For non-subscribers, datacenterHawk delivers hard to find information on the top Internet exchanges, cloud computing providers, carrier hotels, and colocation facilities in North America on a per-report basis. With a credit card number, IT professionals can use datacenterHawk to reduce the time it takes to find data center market information down from hours to seconds.

IntroductionThis report was prepared by Data Center Frontier, in conjunction with datacenterHawk.

Introduction................................................ 2About Data Center Frontier ........................... 2About datacenterHawk ................................ 2

Market Overview and Analysis .......................... 3The Importance of Santa Clara ....................... 4History and Market Position ........................... 5

Trends in Demand ......................................... 6Trends in Supply ........................................... 7Business Environment .................................... 8

Connectivity ............................................. 8Power ..................................................... 8Disaster Risk ............................................. 9Economic Development and Incentives .............. 9

Overview of Data Center Providers ...................10Multi-site Providers ......................................10

CoreSite .................................................10Cyxtera ..................................................10

Digital Realty ...........................................11Equinix ..................................................11INAP ......................................................12QTS Realty Trust........................................12RagingWire .............................................12STACK INFRASTRUCTURE ..............................12Vantage Data Centers .................................13

Other Providers ...........................................13Colovore .................................................13EdgeConneX .............................................13Element Critical ........................................13Evocative ...............................................13Evoque Data Centers ..................................14H5 Data Centers ........................................14vXchnge .................................................14

About Our Sponsor ........................................14Methodology ..............................................15

Contents

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SPECIAL REPORTSilicon Valley Data Center Market

Market Overview and Analysis

The Silicon Valley data center market is entering a dynamic new phase of growth and competition, featuring new providers and a robust cycle of new construction. Silicon Valley continues to be one of the largest and most important data center markets in the U.S., providing space for servers to deploy new hardware and services from the Valley’s marquee technology companies, as well as a legion of fast-moving startups.

The Silicon Valley market is positioned for its strongest growth in years in 2019 and 2020, with a steady supply of new capacity coming online. Three new players plan to enter the region’s data center market, while three leading incumbents are expanding their footprints with new construction.

The cloud computing boom has created strong demand for data centers, and Silicon Valley continues to be a desirable site to deploy IT capacity, despite challenges in the availability and cost of development sites for data center capacity. In the current growth cycle for IT infrastructure, the absorption rate in Silicon Valley correlates closely with the amount of capacity available.

The Silicon Valley area is home to 2.9 million square feet (SF) of commissioned data center space, representing 411 megawatts (MW) of commissioned power, according to market research from datacenterHawk. That makes Silicon Valley the second-largest market for data center space in the U.S. for the first quarter of 2019, trailing only Northern Virginia.

The biggest change from 2018 is the amount of new construction in the pipeline in Silicon Valley. There is now 498 MW of new capacity planned, up from just 104 MW at the start of 2018. This includes projects from new market entrants RagingWire Data Centers, CyrusOne and EdgeCore Internet Real Estate, as well as new construction from Vantage Data Centers, Digital Realty and CoreSite.

Silicon Valley provides one of the industry’s most compelling proximity stories. The region is home to America’s leading tech players, including Apple, Google, Facebook, Intel, Cisco, Oracle and many others. Its residents represent a huge base of tech-savvy consumers, who are consistently among the earliest adopters of new products and services.

Northern California Market Overview (By MW)

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Proximity to corporations and Internet consumers is a major factor in site selection, guaranteeing Silicon Valley a secure future as a major data center market.

That’s why Silicon Valley remains one of America’s busiest markets for data center space, despite expensive land, comparatively high cost of power and the risk of earthquakes.

This places a premium on new projects in Santa Clara, the region’s primary data center hub, due to its lower cost of electric power. Land is hard to find in Santa Clara, but its status as the Data Center Capital of Silicon Valley is reinforced by recent projects. Rather than building on open land in other towns, developers have paid more to acquire properties in Santa Clara with existing buildings that must be torn down and redeveloped.

The expanded roster of data center providers also will boost competition, as new players seek to establish themselves in this strategic market. New market entrants can impact pricing trends, and several new campuses planned for Santa Clara include design features (on-site power, enhanced earthquake protection systems) that are likely to be marketed as differentiators.

The new growth positions Silicon Valley to retain its position as one of the largest U.S. data center markets, particularly with the volume of projects in other markets. In recent years, strong growth trends in Dallas, Phoenix and Chicago have raised the prospect that one or more of those regions could surpass Northern California in size by 2020.

Phoenix and Dallas continue to have larger volumes of planned data center capacity, but the burst of new construction could well keep Silicon Valley in the number two spot. All these markets continue to trail behind the more than 1 gigawatt of future capacity planned for Northern Virginia.

THE IMPORTANCE OF SANTA CLARA

Santa Clara boasts more than 40 data centers located in 18 square miles, rivaling “Data Center Alley” in Northern Virginia as the world’s largest concentration of data centers. The municipal utility, Silicon Valley Power, offers significantly lower rates than those available from PG&E in surrounding towns. The current price difference ranges between 25 and 40 percent.

The preference for Santa Clara has been reinforced by challenges at PG&E, which sought Chapter 11 bankruptcy protection in January, citing current and future liabilities from the Camp Fire, which killed at least 85 people and destroyed 15,000 structures. In May, state investigators determined that PG&E equipment caused the fire, and the utility says disclosures and accounting of wildfire risks are under investigation by the Securities & Exchange Commission.

While the long-term impact of PG&E’s bankruptcy and legal woes is unclear, few are expecting that they will result in lower power prices.

The power pricing differential highlights the strategic importance of new projects in Santa Clara. This is also seen in higher prices for development properties. Two recent transactions illustrate this trend:

▶ In August 2018, CyrusOne paid $53.1 million to acquire a 15-acre property (about $3.5 million per acre) in Santa Clara, which will serve as part of its new campus. The company acquired an additional 8 acres in March 2019, but has yet to disclose the precise cost in its SEC filings.

▶ In April 2019 CoreSite paid $26 million for a 3.8-acre property (about $6.8 million per acre) in Santa Clara with an existing one-story building. The company expects to create a 200,000 square foot data center at the site.

For comparison purposes, in 2017 Microsoft paid $1.12 million per acre for undeveloped land in San Jose that could support a 50 MW data center.

Power is usually a more important cost factor than land in the total cost of building and operating a data center, so Santa Clara will likely remain the nexus of activity in Silicon Valley for years to come.

New market entrants can impact pricing trends, and several new campuses planned for Santa Clara include design features (on-site power, enhanced earthquake protection systems) that are likely to be marketed as differentiators.

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SPECIAL REPORTSilicon Valley Data Center Market

HISTORY AND MARKET POSITION

Silicon Valley lies south of San Francisco, extending roughly from Palo Alto southward to San Jose. It includes the Santa Clara Valley, which was once rich farmland but has emerged as fertile territory for technology innovation, including the silicon chips that gave the region its name.

In the 1990s, the Valley’s tech companies focused on the Internet, creating a need for data facilities to house servers for websites and applications. Early activity was concentrated in multi-tenant “carrier hotels” that housed dozens of service providers and websites, including the Palo Alto Internet Exchange (PAIX) and the Market Post Tower in Downtown San Jose.

The dot-com boom helped define a new industry of colocation providers and hosting companies, who began building their own data center facilities around Silicon Valley.

Data center requirements in Silicon Valley typically originate from companies already located in the region, often representing the primary West Coast footprint for larger web infrastructures. In many cases, companies see data center space in Silicon Valley as a strategic imperative that outweighs other factors, similar to the attraction of Manhattan or downtown Chicago.

In theory, companies objectively evaluating the market for expansion should be deterred by the area’s expensive real estate, power costs and risk of earthquakes. In reality, Silicon Valley has seen consistent activity from large data center users and colocation/cloud operators over the last five years. Companies seeking space in Silicon Valley have clearly found a comfort level with the cost environment and earthquake risk (which nonetheless is a common emphasis of data center providers in rival markets like Phoenix, Las Vegas, Reno and Sacramento).

Providers in Silicon Valley compete with several other markets. Hyperscale companies often weigh options in both Santa Clara and the Pacific Northwest, which offers cheaper land and power and a favorable climate for using outside air for cooling. It’s important to note that several cloud providers deploy capacity in both regions. Companies that are risk-sensitive may weigh options in Silicon Valley alongside providers in Phoenix or Las Vegas, which offer low disaster risk; or Sacramento, which offers a combination of lower earthquake risk and short driving time.

Here’s a look at the trends in the Silicon Valley/ Northern California market, measured in square feet of space:

Power Space

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Trends in DemandSilicon Valley is a market of markets, with strong activity in both retail colocation and wholesale data center space. Tenants use data center space for a variety of purposes, including corporate IT, research labs and high-performance computing, as well as cloud deployments.

Over the past several years, the limited supply of new wholesale space in Silicon Valley has meant strong leasing and pre-leasing activity. The most recent affirmation of this came in April, when CoreSite executed pre-leasing of Phases 1 and 2 at its SV8 project, representing 108,000 square feet of space.

The lead time for procuring a site and building space in Santa Clara is an important factor for cloud players, who seek to deploy capacity in 6 to 9 months in other markets.

Vantage Data Centers has also seen strong leasing and pre-leasing as it has new space to market in recent years. Vantage filled the available capacity at its V6 facility within months of opening to new customers. Vantage has also pre-leased the first building at its second campus in Santa Clara, which is scheduled for delivery in the third quarter of 2019. The building will include 21 MW.

The early success for Vantage and CoreSite is consistent with recent trends in Santa Clara, which has historically seen significant pre-leasing, with customers reserving space while a facility is still under construction.

Will that trend hold true as additional new inventory becomes available from multiple new projects, several of which hope to deliver in late 2019? The lead time for procuring a site and building space in Santa Clara is an important factor for cloud players, who seek to deploy capacity in 6 to 9 months in other markets. This could prompt early commitments from customers with short-term requirements.

Looking beyond cloud, what are the other demand drivers? Growing adoption of artificial intelligence is driving more demand for high-density computing.

These high-density workloads are driven by the growing use of GPUs and FPGAs, which use more power than traditional CPUs, and are becoming common in AI computing infrastructures. The ability to support these rising densities will be an important factor in data center design going forward, especially in Silicon Valley.

Many retail colo customers, including content companies and social media providers, seek interconnections and network-rich data center ecosystems. Equinix is the leading player in this niche, and operates seven data centers in Silicon Valley, including a large data center campus in South San Jose. Digital Realty’s Telx unit also offers interconnection services from multiple facilities in the region.

Many companies are seeking to move server rooms and technology labs out of their headquarters, as the recent hiring boom has led to a shortage of office space on corporate campuses.

This has created several types of opportunities for data centers providers. There have been multi-MW deals with lab tenants for “variable resiliency” space, which support high-density workloads with a non-redundant (N) power configuration. These requirements are expected to be an ongoing component of the region’s data center demand profile.

“Variable resiliency” space, which support high-density workloads with a non-redundant (N) power configuration, is a requirement expected to be an ongoing component of the region’s data center demand profile.

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Trends in SupplyAs of the first quarter of 2019, there was 42 MW of capacity available in Silicon Valley, with another 9 MW under construction, according to datacenterHawk. The available capacity is up from just 25 MW in 2Q 2018, and includes a mix of wholesale data center capacity and smaller pockets of retail colocation space. Pre-leased capacity—including Vantage CA21—is categorized as commissioned power.

The vacancy rate for available space in the region has remained low, but trended slightly higher in recent quarters as new inventory has become available, as seen in the chart above from datacenterHawk.

That strong demand has paved the way for new construction, with Vantage Data Centers, Equinix and Digital Realty all expanding their data center footprints in Silicon Valley.

Here’s a look at the inventory in the pipeline:

▶ Vantage Data Centers is building a new campus on Mathew Street in Santa Clara, where it plans to create 69 MW of new data center capacity. The first phase of 21 MW is schedule to be delivered in the third quarter of 2019.

▶ CoreSite is developing its SV8 property, which will offer 175,000 square feet of data center space and 18 MW of power capacity. The first and second phases are fully leased, and the company has begun construction on Phase 3.

▶ Digital Realty has announced plans for a new campus on Lafayette Street that will add 48 MW of power across 403,000 square feet of data center space. The company has not yet set a timetable for delivery of the first phase. Digital Realty has also reportedly acquired a data center property on Mission College Boulevard to provide additional runway for growth.

Northern California Vacancy Rate Comparison

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▶ RagingWire Data Centers has announced its entry into Silicon Valley with a 16-MW, 160,000 square foot building on a 3-acre site in Santa Clara, which will open for business in mid-2020.

▶ EdgeCore has acquired 12 acres in Santa Clara and plans a campus that can support four data centers and up to 80 MW of capacity. The 36-MW first phase is scheduled for delivery in 2020.

▶ CyrusOne has bought two adjoining parcels to create a 23-acre new campus in Santa Clara, where it plans to deploy 144 MW of capacity. CyrusOne will knock down several buildings from the previous owner, a recycled paper mill that closed in late 2017. It will retain a cogeneration plant, which can provide up to 27 MW of on-site power generation, using natural gas as fuel.

▶ STACK Infrastructure says its San Jose data center campus (previously operated by Fortune Data Centers and Infomart) is likely to be expanded, as it has a building available for retrofit and a parking lot that could be converted to data center use.

CyrusOne says its on-site power generation creates the ability to offer electricity that is “meaningfully cheaper” than Silicon Valley Power rates.

The new projects bring several new wrinkles on the competitive front. CyrusOne says its on-site power generation creates the ability to offer electricity that is “meaningfully cheaper” than Silicon Valley Power rates. The gas turbine can generate power for data center customers, while the steam heat from the turbine can be used in absorption chillers to produce cold water for the data center’s cooling system.

Meanwhile, RagingWire is installing a base isolation system to provide building-level protection against earthquake damage. These systems are widely used in Japan in data centers for NTT (RagingWire’s parent company) but are uncommon in the U.S. In the Bay Area, Digital Realty’s 365 Main facility in downtown San Francisco has a base isolation system.

It remains to be seen how these features will be received by customers, but they will become part of the conversation in Silicon Valley site selection.

Business Environment

CONNECTIVITY

Legacy carriers AT&T, Sprint and Verizon all run long-haul fiber connections on the west side of San Francisco Bay. These fast connections to the Internet backbone link tech businesses from San Francisco in the north to the concentrations of data centers south of the Bay in Santa Clara and San Jose.

Fiber from newer carriers CenturyLink, Cogent, Electric Lightwave, Integra, Level3, M Power, Paxio, Telepacific, XO Communications and Zayo all follow similar paths but also add connections to east Bay Area-suburbs of Berkeley and Oakland in the north, out to the growing eastern suburbs of Dublin, Pleasanton and Livermore, and circle back southwest to link up to San Jose/Santa Clara. Northern California also has a half-dozen localized fiber providers servicing specific areas.

Municipal fiber is available in Palo Alto, Sun Bruno (just south of San Francisco proper) and San Leandro, while Wilcon and Northern California Fiber serve the data center-heavy areas in Santa Clara and San Jose.

POWER

Power pricing is a meaningful competitive factor in Silicon Valley, where the average power costs range from 9 to 15 cents per kilowatt hour (kWh), significantly higher than competing data center markets.

Within the Silicon Valley market, Santa Clara has emerged as the prime location due to power pricing from the municipal utility, Silicon Valley Power, whose rates average 25 to 40 percent lower than the cost of power from PG&E in surrounding towns.

Silicon Valley Power’s base rate for large industrial customers is about 22 percent lower than the average for PG&E in surrounding towns. Santa Clara does not have a city user tax, which means another 5 percent savings for customers compared to San Jose or 3 percent compared to Sunnyvale. In addition, Silicon Valley Power negotiates volume discounts with customers that use a large amount of power, but those rates are kept confidential.

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One exception to the broader pricing trends is the INFOMART data center in San Jose, which qualifies for PG&E’s Direct Access program. The program allows it to competitively source power directly from other electricity providers. INFOMART says it can offer power rates around 9 cents per kilowatt hour, compared to about 10 cents in Santa Clara and 13 to 15 cents per kWh in other PG&E service areas.

As noted above, it is unclear at present how PG&E’s bankruptcy and legal woes will impact power pricing, but the company’s journey bears close watching.

These costs often factor into the decisions for Northern California-based companies to locate in the Pacific Northwest, where the power cost for data center users is considerably cheaper, with markets like Quincy, Washington, offering power for as little as 3 cents per kWh.

Northern California has a reliable and extensive electrical grid. Both PG&E and Silicon Valley Power encourage using renewable power such as solar, wind and the more exotic biomass solutions. However, these “green” power sources can often increase a data center’s total cost of ownership.

DISASTER RISK

The largest natural hazard threat in the Northern California market is earthquakes. According to the United States Geological Survey’s 2014 findings, the Northern California market is in one of the areas most likely to be impacted by an earthquake. Because of this, data center users and providers have invested significant capital in building facilities designed to

handle these seismic events. As we noted earlier, some providers are marketing advanced seismic protection systems as competitive differentiators.

Another challenge for the Northern California market is the availability of water. Many data centers need large amounts of water to cool their facilities, and the multi-year drought in California creates challenges for data center operators.

Newer facilities now use free-air cooling and rooftop DX cooling technologies. Although some media coverage has created a perception that data centers abuse Northern California’s limited resources, the data center industry as a whole worked hard even before California’s provincial water crisis to conserve and use water in environmentally-friendly ways. As far back as 2005, numerous data centers (including many in Northern California) received Leadership in Energy and Environmental Design (LEED) certifications designed to conserve both water and electricity.

A current concern is the risk from wildfires, which is a front-of-mind issue after the extensive loss of life and property in recent wildfires affecting Santa Rosa and Paradise in Northern California. The only recent incidence of wildfires in the region has occurred in the Santa Cruz mountains, south of the developed property in San Jose and Los Gatos.

Nonetheless, in recent months Santa Clara County officials have proposed multi-million-dollar investments in additional staff and equipment to centralize the county’s management of wildlands and reduce reliance on equipment and resources that are shared with other agencies.

ECONOMIC DEVELOPMENT AND INCENTIVES

Tax abatement opportunities are not currently available through the State of California. Brook Taylor, a spokesman for the California Governor’s Office of Business and Economic Development, told the Associated Press in 2015 that: “If anything, [data centers] are being built in spite of the fact that we don’t have specific tax credits or incentives for them.” Local tax abatement opportunities do exist in certain markets in Northern California.

Northern California has a reliable and extensive electrical grid. Both PG&E and Silicon Valley Power encourage using renewable power such as solar, wind and the more exotic biomass solutions.

Many data centers need large amounts of water to cool their facilities. Newer facilities now use free-air cooling and rooftop DX cooling technologies.

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Overview of Data Center Providers

MULTI-SITE PROVIDERSHere’s a look at the data center providers that operate two or more facilities in the Silicon Valley market, presented alphabetically.

CORESITE

CoreSite is a Denver-based colocation provider with 17 data centers in eight markets across the U.S. CoreSite serves both small and large customer power requirements. In Northern California, CoreSite operates seven data centers, five of which are clustered in Santa Clara.

Located at 55 South Market Street, CoreSite’s SV1 data center is a 15-story carrier hotel building in San Jose and has commissioned multiple data halls inside the over 309,000 SF interior. SV1 has direct access to CoreSite’s Open Cloud and Peering Exchange, a valuable connectivity resource. CoreSite SV2 in Milpitas is a single-story, 80,000 SF building located at 1656 McCarthy. With 38,000 SF of data center space, SV2 has commissioned approximately 3.8 MW of critical power.

CoreSite’s largest investment in Northern California is its Santa Clara campus at 3001 Coronado. The data center campus will eventually contain five data centers. There are currently five data centers on campus, with an additional building to be constructed based on tenant demand. The campus is directly adjacent to a 75 MW dedicated substation, with electricity provided by Silicon Valley Power.

Three of the buildings—SV3, SV4 and SV6—are fully leased to leading technology companies. SV7, the largest data center on their Santa Clara campus at 230,000 SF, is more than 60 percent leased (a build-to-suit project for Amazon Web Services).

In April, CoreSite announced that it has pre-leased 108,000 SF of space in phases 1 and 2 of SV8, a new data center under construction on two acres of land adjacent to SV7. The company also said it was accelerating the construction schedule for phases 1 and 3 of the SV8 project.

In 1Q 2019, CoreSite entered into contract to purchase a 4-acre parcel adjacent to their Santa Clara campus, which enables them to continue expansion after SV8’s delivery.

CYXTERA

Private equity firms BC Partners and Medina Capital acquired CenturyLink’s colocation portfolio in 2017, combining the assets gained to create a brand-new company called Cyxtera Technologies with 57 data centers in more than 30 markets. The company offers highly secure solutions to meet strict requirements such as those expected in financial and government entities. Cyxtera Technologies is headquartered out of Coral Gables, Florida, and is comprised of Cryptzone, Catbird, Easy Solutions and Brainspace to offer a reliable and cloud-ready infrastructure platform for more than 3,500 customers.

Cyxtera operates six data centers in the Northern California market. The SN1 data center, located at 1400 Kifer Road in Sunnyvale, is a 76,000 SF building with 6 MW of total utility power delivering power densities of up to 150 W/SF. Cyxtera SN2 is located directly next door at 1320 Kifer Road. This 24,000 SF facility has 2 MW of total utility power and densities of up to 150 W/SF. Both were former Savvis facilities acquired by Cyxtera in 2011. Power is provided to the buildings by Pacific Gas & Electric.

To the east, Cyxtera’s SC4 and SC5 data centers are leased spaces in a Digital Realty-owned building on Walsh Street in Santa Clara. SC4 is a two story 167,000 SF building with 8 MW of total power capacity and provides power densities up to 150 W/SF. Cyxtera’s SC5 data center is directly next door at 2403 Walsh Street. The 105,000 SF, one-story building has 8 MW of total utility power and provides densities of up to 150 W/SF.

4650 Old Ironsides is the location of Cyxtera’s SC9 data center in Santa Clara, CA. The 124,000 SF building owned by Digital Realty has 10 MW of total utility power. Cyxtera SC9 leverages that power to deliver up to 150 W/SF densities on their data center floor. Silicon Valley Power provides electricity to the site and its electrical and mechanical systems are designed in an N+1 configuration. Directly next to this data center is 4700 Old Ironsides, Cyxtera’s SC10 data center, which is approximately 90,000 SF gross space.

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DIGITAL REALTYDigital Realty (DLR) is a real estate investment trust (REIT) and the largest wholesale data center provider in the world. The company has grown to over 195 locations across five continents after going public in 2004. Digital Realty delivers colocation, powered shell, private suite and custom data center solutions. The company is also focused on providing services surrounding connectivity to the Internet and cloud providers at multiple locations.

DLR’s largest concentration of data centers in Northern California is in Santa Clara, where it owns or operates 17 facilities.

In July 2015, Digital Realty acquired Telx, a New York-based company offering colocation, interconnection and access, for $1.89 billion. The Telx acquisition expanded and expedited Digital Realty’s ability to provide integrated services for SMB-to-enterprise customers.

The two Telx data centers DLR now operates in Santa Clara, SCL1 and SCL2, are strategically located on major fiber routes and power grids. Telx SCL1 at 1100 Space Park Drive in Santa delivers power densities of 125 W/SF. The SCL2 data center at 2820 Northwestern Parkway Clara is part of the Vantage Data Centers multi-tenant data center campus.

In 2Q 2017, Digital Realty began construction on 3205 Alfred Street, a new two-story, 6 MW data center. Digital Realty also announced its merger with DuPont Fabros Technology (DFT), with Digital Realty absorbing DuPont’s data centers. That includes a 360,000 SF building (SC1) located in at 55 Reed where DuPont Fabros fully leased the 36.2 MW of commissioned power and 173,000 of data center space. DFT built multiple data halls in the facility to handle up to 2.275 MW and 11,000 SF of data center space each.

In 3Q 2017, Digital Realty/DuPont Fabros delivered the third phase at their SC1 data center. The 16 MW of commissioned power was fully leased at the time of delivery.

In 2018 Digital Realty completed its most recent project in Northern California with the delivery of 6 MW of commissioned capacity at 3205 Alfred Street.

In 3Q 2018, Digital Realty purchased three sites in Santa Clara. The sites are at Lafayette Street, 561 Walsh, and 2305 Mission College Boulevard, where they plan to demolish existing buildings and construct up to 200 MW of commissioned power.

EQUINIX Equinix is a global data center company providing colocation, interconnection, and connectivity services to users. The California-based company has over 180 data centers in 44 markets throughout the world.

Equinix pricing is typically higher due to the ecosystems created in Equinix facilities and access to cloud and connectivity services. In North America, Equinix revenues come from colocation and telecom interconnections while a mix of colocation and managed infrastructure services bring in more revenues for the rest of the world.

Equinix operates four data centers in San Jose: SV1 is located at 11 Great Oaks Boulevard, SV3 is on 1735 Lundy Avenue and SV5 is just down the street from SV1 at 9 Great Oaks. To the west in San Jose, Equinix SV2 is in the tech-centric suburb of Santa Clara on 1350 Duane Avenue.

Equinix recently opened its SV10 data center at its Great Oaks campus, investing $125 million on the first phase. The facility is anticipated to deliver approximately 14.4 MW of commissioned power at full build. Equinix also has plans to expand and add SV11 on additional land adjacent to SV10.

In Sunnyvale, Equinix operates two data centers: SV4 at 255 Caspian Drive and SV6 at 444 Toyama Drive. Tucked away in Palo Alto is SV8 on 529 Bryant Street.

In late 2016, Equinix acquired five Verizon data centers in the Northern California market. This included the former Terremark campus in Santa Clara, which consists of four facilities (Pod A, Pod B, Pod C, Pod D) that now become Equinix SV14, SV15, SV16 and SV17, totals more than 350,000 SF.

The deal also included Terremark’s NAP West data center at 2030 Fortune Drive in San Jose, which delivers power densities of 120 W/SF with a power and cooling infrastructure configured for N+1 redundancy.

In North America, Equinix revenues come from colocation and telecom interconnections while a mix of colocation and managed infrastructure services bring in more revenues for the rest of the world.

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INAP

INAP (formerly known as Internap) is a colocation company headquartered in Atlanta, Georgia, with a presence in 15 cities around the world. The company’s focus on the technology, healthcare, financial, online education and gaming industries has propelled their growth over the last few years. In addition, INAP’s focus on low latency/high availability network services provide vertically-integrated services to their clients.

INAP markets the scalable, high-performance AgileCLOUD to the region’s numerous small-to-mid sized developers of software applications who demand agility and speed in a competitive industry.

INAP operates two Northern California data centers in the Santa Clara cluster to serve Silicon Valley businesses. These data centers offer colocation along with INAP’s OpenStack-based AgileCLOUD service. INAP markets the scalable, high-performance AgileCLOUD to the region’s numerous small-to-mid sized developers of software applications who demand agility and speed in a competitive industry.

In 1Q 2018, INAP executed a lease with an unnamed social media networking group. The group will lease capacity at INAP’s Dallas and Northern California data centers.

QTS REALTY TRUST

QTS Realty Trust (QTS) is a publicly-traded real estate investment trust (REIT) with twelve data center properties in the continental United States. The company traditionally finds large, robust facilities and transforms them into LEED-certified data centers. QTS owns and operates a total of 2.1 million RFSF of data center space, of which 961,000 SF is rentable and 1.1 million SF is in development.

QTS operates two fully-occupied data centers at 2805 and 2807 Mission College Boulevard in Santa Clara, which provide approximately 55,000 RFSF of total data center space on a sprawling 135,000 SF campus. Both buildings receive dual-fed utility power from Silicon Valley Power substations with power and cooling infrastructure configured for N+1 redundancy. As of 2Q 2017, both facilities were 84% leased. As of 1Q 2019, both facilities were 74% leased.

RAGINGWIRE

Founded in 2000, RagingWire Data Centers currently operates over 1.5 million SF and is headquartered in Sacramento, CA. The majority of RagingWire was acquired in 3Q 2014 by NTT Communications in an effort to expand their North American footprint. The company provides colocation and network solutions for users needing cabinets, cages or private suites.

In 4Q 2017, RagingWire purchased a 3-acre site in Santa Clara at 1150 Walsh Avenue. The site currently has a 37,000 SF building, which RagingWire will demolish to construct a 5-story 200,000 SF data center. RagingWire is currently in the permitting process, but will deliver up to 16 MW of commissioned power at full build. Phase I is scheduled for delivery mid-2020 with 6 MW of commissioned power. The second phase will deliver the remaining 10 MW of capacity by the end of 2020.

STACK INFRASTRUCTURE

Launched in 2019, STACK INFRASTRUCTURE is a data center company branded and sponsored by investment company IPI Partners. Designed to meet the needs of both rapidly scaling enterprises and hyperscale companies, STACK offers an array of tailored infrastructure services to customers across the US. The company provides three data center solutions: HYPER STACK (hyperscale campuses and build-to-suit options), POWER STACK (powered shells), and READY STACK (readily available wholesale colocation and private suites). STACK’s current assets include eight data centers spanning six US markets, with expansion sites located adjacent to six of those facilities.

The company’s San Jose data center is the original “Fortune Data Center” location. The two-story building features 9.3 MW commissioned power and 41,000 SF of data center space. The space can be divided into multiple data halls with 1.1 MW/10,000 SF available. The data center in San Jose meets ISO, LEED, and Uptime Institute standards, functions on 100% renewable energy, and offers 24/7 on-site security and premium amenities such as office space and conference rooms.

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VANTAGE DATA CENTERS

Headquartered in Silicon Valley, Vantage Data Centers is a leading North American wholesale data center provider in six strategic markets: Silicon Valley; Northern Virginia; Phoenix; Quincy, Washington; Montreal and Quebec City, Canada. Vantage has 10 operational facilities totaling 98MW of capacity and five facilities currently under development totaling 97MW. The company provides highly scalable, flexible and efficient data center solutions to hyperscale, cloud and enterprise customers, offering unique value through its commitment to exceptional customer service and sustainability.

Vantage’s flagship Silicon Valley campus in Santa Clara includes six data centers totaling 75 megawatts (MW) of critical IT load. Power to the buildings are served from two 50 MW dedicated on-site substations. Each building on the Vantage Santa Clara campus is a combination of both data center and premium office space. The campus is nearly leased with only 8.5 MW of available capacity.

Vantage is currently building a second campus in Santa Clara. The company is scheduled to deliver the first of three buildings in 3Q 2019. The first building, which is already pre-leased, will include 21 MW of capacity. Upon completion, the campus will total 69 MW of IT load.

OTHER PROVIDERSCompanies with one data center in Silicon Valley, listed alphabetically.

COLOVORE

Founded by Sean Holzknecht and Ben Coughlin, Colovore is a Bay Area colocation and cloud provider that focuses on providing high-density IT solutions to enterprises in Silicon Valley. Jointly owned by Digital Realty, Pelio & Associates, and a group of private investors, Colovore operates a carrier-neutral facility

in Santa Clara that offers high-density cabinets, spacious racks, secure access, blended bandwidth, and dedicated access to the Amazon Web Services and Softlayer clouds. Colovore is headquartered in Santa Clara, California.

In 2Q 2017, Colovore began the Phase 2 expansion to their data center, adding 2 MW of critical capacity. The first 2 MW phase was fully leased when Colovore began construction on the second phase.

EDGECONNEX

EdgeConneX is a colocation and network services company headquartered in Herndon, Virginia. The company created a network of 23 smaller “edge-of-network” data centers throughout the United States designed to lower latency and increase application performance. The company’s Edge Data Centers (EDC) enable distribution of content at the edge of the Internet. All EdgeConneX EDCs are designed to support extremely high power densities with a simplified per kW pricing model.

The company’s Silicon Valley EDC is located at 1700 Richard Avenue in Santa Clara, California. EdgeConneX designed their EDCs to support extremely high densities, and 1700 Richard Avenue is capable of over 20 kW per rack/cabinet and 600 W/SF.

ELEMENT CRITICAL

Element Critical was previously known as Central Colo, which was founded in 2014 to operate a 94,500-square foot carrier-neutral colocation facility at 1360 Kifer Road in Sunnyvale. In August 2016, Central Colo received new investment from global private equity firm Safanad, which brought in Ken Parent as CEO. The Sunnyvale facility has 4 MW of available power, with the ability to add another 4 MW in three to six months.

EVOCATIVE

Evocative is the relaunch of a brand that for many years offered colocation services from its headquarters in Emeryville in the East Bay. Entrepreneur Arman Khalili is the company’s CEO. The company provides colocation services from one facility in the Silicon Valley market at 534 Stockton Avenue in San Jose. The facility was built by Switch & Data, purchased by Equinix, and then sold to 365 Data Centers in 2012, and to Evocative in 2017. The site is a 20,000 SF building with approximately 15,000 SF of data center space and 800 kW of commissioned power.

Vantage Data Centers provides highly scalable, flexible and efficient data center solutions to hyperscale, cloud and enterprise customers, offering unique value through its commitment to exceptional customer service and sustainability.

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EVOQUE DATA CENTERS

Established in 2019, Evoque Data Center Solutions is a colocation provider that operates 30 data center facilities worldwide. A portfolio company of Brookfield Infrastructure, the company was launched in January 2019 upon the Brookfield acquisition of AT&T’s data center assets. The subsequent rebranding to Evoque included the transfer of colocation operations, fixed assets, leases, and ownership of 31 facilities (18 located in North America) to the new company. Evoque Data Centers is headquartered in Dallas, Texas.

The San Jose IDC, located at 400 Holger Way in San Jose, offers two direct connections to AT&T’s ultra-fast 40 Gb national network, in addition to multiple fiber connections from competing carriers. The two-story building was constructed in 1999 and retrofitted in 2005 for data center use. The 76,000 SF San Jose IDC is designed with 24/7 data and physical security, fault-tolerant power infrastructure, loading docks, equipment staging, and onsite office space.

H5 DATA CENTERS

H5 Data Centers is a colocation and wholesale data center provider with seven facilities in the United States. The privately-owned company designs data center and interconnection solutions for carriers, colocation, enterprise and government customers.

H5 San Jose is a purpose-built, 73,000 SF carrier-neutral data center with access to numerous fiber carriers. H5 offers this facility as either a wholesale data center space or as a powered shell with dedicated data center infrastructure.

VXCHNGE

Created in 2013 when private equity firm Stephens Group bought the Bay Area Internet Services (BAIS), vXchnge is a national colocation provider. In May 2015, vXchnge bought eight Sungard AS data center facilities to expand their footprint into a total of fifteen U.S. markets. The acquisition is part of vXchnge’s strategy to create “Built for Performance” carrier-neutral data centers and address distance to customer or localization issues for the cloud and service providers that fuel the digital economy.

vXchnge’s 83,000 SF Santa Clara data center at 2050 Martin Avenue is a secure, carrier-neutral facility. The building receives 7 MW of dedicated utility power, and all power/cooling infrastructure is configured for N+1 redundancy. vXchnge offers 24/7 onsite security and remote hands support, and the data center is SSAE 16 Type II, SOC 2 Type II, HIPAA and PCI compliant.

www.vantage-dc.com

Vantage Data Centers is a leading wholesale data center provider in North America with campuses in six strategic markets: Silicon Valley; Northern Virginia; Phoenix, Arizona; Quincy, Washington; Montreal and Quebec City, Canada. Founded in 2010, Vantage has an unceasing commitment to provide major hyperscale, cloud and enterprise companies with reliable, efficient data center environments with outstanding service to help them achieve their business goals. The company owns and operates some of the most scalable data centers in the world with a meticulous focus on efficiency, operational excellence, reliability and sustainability.

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MethodologydatacenterHawk continuously monitors data center activity for 35 regional markets in North American. Regional markets are placed into one of two categories:

1. Primary – Large markets with multiple colocation and cloud data center facilities

2. Secondary – Mid-to-small markets with data centers.

We define our market sizes based on the total amount of power and space in the market. The total amount of power and space in each market is calculated by datacenterHawk’s team of analysts based on four key attributes:

▶ The amount of commissioned power and space

▶ The amount of available power and space

▶ The amount of under construction power and space

▶ The amount of planned power and space

As an example, Data Center Provider A builds a 75,000 gross square foot (SF) data center facility, with 3 separate data halls of 1,200 kilowatts (kW) and 10,000 raised floor square feet (RFSF) each. Data Center Provider A leases one of the data halls (1,200 kW/10,000 RFSF) to a user, and makes the second data hall (1,200 kW/10,000 RFSF) available by completing construction to be ready to lease the next opportunity. The third data hall is in shell condition and therefore considered planned space.

In addition, the datacenterHawk analysis considers that many colocation and cloud providers lease infrastructure from larger data center providers. In our analysis, we count power and space leased from one data center provider to another only once.

As an example, if the lease completed by Data Center Provider A in the scenario above was completed with Data Center Provider B with the intent to sublease that 1,200 kW/10,000 RFSF to users, the analysis would only include the 1,200 kW and 10,000 RFSF of space one time.

At datacenterHawk, we track these attributes in each market throughout the year and frequently refresh them. By continuously monitoring these attributes, we can calculate a baseline for each market, rate how a market grows relative to their baseline score, and deliver the most current and valuable information needed by our customers.

datacenterHawk has made every attempt to ensure the accuracy and reliability of the information provided. However, the information is provided “as is” without warranty of any kind. datacenterHawk does not accept any responsibility or liability for the accuracy, content, completeness, legality, or reliability of the information provided.