Atlanta Perfectly Positioned To Attract 'Hyperscale' Data Center Users
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A global data center provider is powering up a major Atlanta facility.
This marks the Atlanta debut for CyrusOne — a company with more than 30 data center locations and 3.8M SF around the globe — during a time when the market is showing strength with data center activity.
“Atlanta has become a nexus for data in the Southeastern U.S., driven by a diverse business community, including corporate headquarters, financial services, payment processing, higher education, technology and manufacturing,” CyrusOne Executive Vice President Robert Jackson said in a statement.
Atlanta was one of the most active data center markets in the country in the first half of 2017, according to a recent CBRE report. Over that time frame, data center providers saw tenants power up 3 megawatts in various locations in Metro Atlanta. That helped push landlords' vacancy rates down below 10%, according to CBRE.
Most recently, INAP Corp. inked a long-term deal to lease all of Lincoln Rackhouse's 4.8 megawatts in an 88K SF data center in Central Perimeter, a facility the data center division of Lincoln Property Co. Southeast and its joint-venture partner Bailard Inc. purchased in May. INAP is a co-location provider.
“It's pretty much exploding,” Green House Data Chief Technology Officer Fred Tanzella said. “[Atlanta] was pretty static for a while, and just recently now you're seeing a lot of new build-outs.”
Part of the reason for Atlanta's growth is more Fortune 500 companies are outsourcing their data center operations into the cloud — that term for data center companies who manage data storage in their own facilities for outside companies.
“Atlanta has all the DNA of a great market,” DartPoints Chief Development Officer Michael Ortiz said.
Not only is the number of Fortune 500 headquarters a factor, but also the numerous regional corporate offices in the area. Plus, there is a robust fiber network with five major carrier hotels. The climate is steady and power is relatively cheap, Ortiz said. That could have Atlanta absorbing as much as 10 megawatts of power to users this year, Ortiz said. At the very least, 6 megawatts.
“Now you've got the hyperscale guys looking at Atlanta,” he said.
Incidents like the Equifax hack have raised the visibility of hacking on corporate America, Tanzella said. When hacking instances occur, and company executives are hauled before the U.S. Senate for hearings, it makes in-house IT executives nervous.
“I don't want to be facing the CEO [and saying], 'Hey, we got hacked,'” Tanzella said.
Many cloud-hosting data center providers have IT security members on staff, he said.
Hyperscale tenant use is also driving data center leasing in recent months, Compass Datacenters President Jared Day said.
Hyperscalers are users who need massive amounts of megawatt power and real estate for a single data center. Think the likes of Google or Oracle.
“Even the big multi-tenant co-locators, more than half [of their absorption has] been from hyperscale cloud providers,” Day said.
And while Atlanta has not historically been a hyperscale market, as companies like Google expand their data center footprints, cities like Atlanta will be a target of opportunity for them especially given the metro area's lower power costs and perceived safety against natural disasters like earthquakes and hurricanes, he said.
“I think safety, in that being in an area where there are no natural disasters, is continuing to be a focus,” Day said. "I think it may be now a focus more than ever."
Hear from Day and other data center executives, including Carter Validus CEO Michael Seton, Lincoln Rackhouse Managing Director Ryan Sullivan, Green House Data Senior Director Steven Dreher and Equinix Senior Director Rick Galietta at Bisnow's DICE Southeast full-day event Feb. 27 in Atlanta.