Data Center Sector Primer
Overview:
Data centers house mission-critical IT infrastructure for corporations, governments, and other organizations.
On the outside, they are nondescript and typically resemble a standard office or industrial building. However, the interior of a
data center is highly specialized, and is equipped to handle the immense power requirements needed to keep IT equipment humming, even when the power goes out.
Data centers often have multiple layers of security, including 24-7 surveillance, and biometric locks to keep data safe. All this infrastructure comes at a price, with a new data center costing approximately $1,500 per sq. ft to build.
On the outside, they are nondescript and typically resemble a standard office or industrial building. However, the interior of a
data center is highly specialized, and is equipped to handle the immense power requirements needed to keep IT equipment humming, even when the power goes out.
Data centers often have multiple layers of security, including 24-7 surveillance, and biometric locks to keep data safe. All this infrastructure comes at a price, with a new data center costing approximately $1,500 per sq. ft to build.
Landlords Own:Land, building shell, and most of the longer-lived infrastructure (e.g. generators, batteries, cooling equipment).
Tenants Own:
Most of the short-lived infrastructure, including: servers, storage, and networking equipment.
Types of Data Centers
Enterprise:Enterprise data centers are where most data lives (e.g., the cloud) and are highly commoditized.
These are also known as: wholesale, hyperscale (cloud provider), and colocation (small tenant).
Enterprise data centers house most of the data society accesses (e.g., apps, websites, videos, social media)
Network-Dense:
Network-dense data centers act as critical switching points that allow the internet to function (this is where internet traffic is exchanged) and are prized assets.
Network-dense data centers are colocation data centers, but differentiated by the number of networks that interconnect within the facility (hence, “network-dense”).
It’s very difficult to replicate due to the ecosystem and high switching costs.
Typically one network-dense data center is located per major metro.
These also tend to have shorter-term leases and attractive interconnection revenue.
