Data Center Wars Chicago – The Lines Have Blurred
Prevailing wisdom would have you believe that there are two distinct data center markets in Chicago; city vs. suburbs. While it may be easier to divide the market geographically, it does little to inform data center users of any distinct differences in the market place. As the lines between retail colocation, wholesale data centers and managed service/cloud providers continue to blur it becomes ever more critical that end users understand these subtle differences and their long term influences.
Legacy Wholesale Providers
New competitors along with the changing focus of existing data centers will have far greater impact on the Chicago market in 2015 than simple geography. On the wholesale front, planned expansions by DuPont Fabros in Elk Grove Village and Digital Realty in Franklin Park are underway. Recent activity by both companies has shown increased emphasis on pursuing smaller colocation opportunities that fall outside of their traditional areas of expertise. New wholesale competitors in the Chicago area already working under a similar hybrid approach include both QTS with their recent acquisition of the former Sun Times plant and Byte Grid acquiring the former CNA Insurance facility in Aurora.
A common theme among most of the wholesale companies listed above has been a slow move towards vertical integration. In addition to wholesale/retail integration, network solutions and cloud connectivity options have also become quite prevalent among the traditional wholesale providers. This is a trend that we first witnessed in the retail space with Equinix offering of Financial Exchange and Equinix Exchange services. Equinix has since expanded offerings into areas as diverse as CDN and WAN Optimization. Expect to see this trend accelerate as a result of acquisition and consolidation within the industry (see Latisys/Zayo) with the possibility of data center providers starting to look more like legacy telecommunications companies.
Legacy Retail Providers
Among local Chicago area retail providers, expansions of existing facilities have also been on the rise. Latisys very successful Oak Brook facility has initiated yet another 25,000 sq. ft., 3.6 megawatt expansion. Continuum Data Centers has also pursued expansion through their recent move from their Lombard location to their new recently upgraded, 80,000 sq, ft, facility in West Chicago. Altered Scale in downtown Chicago has also recently completed extensive upgrades to both infrastructure and client amenities to attract a wider cross section of end users. Additionally, we have heard of a rumored expansion of the Savvis/Century Link data center in Elk Grove Village, IL.
Probably the most interesting newcomer to the Chicago market has to be long time engineering and IT Consulting firm Forsythe Technology. With their new 221,000 sq. ft. Elk Grove Village data center offering private 1,000 square foot client suites, Forsythe has put a new spin on wholesale/retail hybridization. The new development will be worth watching due largely to Forsythe’s unique approach of offering consulting services to support everything from move logistics to hardware and software installation and maintenance. While this does appear to be the most vertically integrated data center solution we’ve seen in the area, there are still many questions surrounding this unique approach.
If you are in need of a more detailed view into the Chicago data center market, please contact us directly. Todd and Kevin can be contacted via e-mail at firstname.lastname@example.org and email@example.com.
About the Authors:
Todd Smith and Kevin Knight specialize in the data center facility market working for the technology advisory firm Kiamesha Global (www.kiameshaglobal.com). If your organization is considering the potential benefits of a data center relocation, expansion or simply want to better understand your options in the data center marketplace, Todd and Kevin can be contacted via e-mail at firstname.lastname@example.org and email@example.com. Even if you have no changes under consideration for the New Year, they would welcome the opportunity to provide you with an assessment of the current market value of your existing data center portfolio’s in-house and/or collocated facility assets in order for you to better recognize where you stand in this rapidly evolving market.
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