IT shifts from owning to outsourcing data center space

Demand is increasing for data center space in multi-tenant facilities, driven by a number of trends, according to a new report.

There is increasing demand for data center space in multi-tenant facilities driven by a number of trends, according to a new report.

In the top 20 markets in the U.S., which include Northern Virginia, New York, Boston, Seattle and Silicon Valley, there is a total of 22.1 million square feet of data center operational space, according to 451 Research. Operational space is revenue-producing space in a data center.

The amount of data center space is growing, on average, about 9% a year, the market research firm said.

"In most areas, demand is really rising and growing faster than supply," said Kelly Morgan, research manager for multi-tenant data centers at 451 Research. "The result is that data centers are filling up."

The largest markets are adding space at a quicker pace. Northern Virginia, for instance, which accounts for about 3 million square feet, is averaging an additional 12% per year.

In its report, 451 Research said there is "an unstoppable move" to the cloud to host production workloads as well as to outsource services. Financial services and health care are leading the trend.

Healthcare facilities, in particular, are interested in creating more revenue producing space, and that often means moving IT equipment to an outsource facility, said Kelly.

Extreme weather, such as Hurricane Sandy, is also encouraging the trend to move operations to multi-tenant centers.

Patrick Thibodeau covers cloud computing and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at

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