New report reveals data centre demand remained high in Q1

DatacenterHawk, the creator of a global data centre real estate analysis platform, recently released its 1Q 2023 Data Centre Market Recap, reporting on the high demand and ongoing challenges across the North American, European, Asia-Pacific (APAC), and for the first time, Latin American (LATAM) markets.

Company president David Liggitt said he anticipates a “fascinating year of development in the data centre industry.”

Market analysis, he said, “will play a crucial role as key stakeholders navigate the challenges of power limitations, supply chain issues, and rising costs, all while demand for data centre infrastructure remains strong.”

Regional data centre market highlights:

North America: While still active, demand in North America cooled after multiple record-setting periods of absorption between 2020-2022. Absorption remained high, however, recording the sixth largest quarter ever.

“Many enterprise users are currently favouring a conservative strategy regarding their IT infrastructure, with some opting to renew their leases at shorter terms, likely in anticipation of less volatile pricing in the near future,” the report stated. “Emerging secondary markets continue to experience vast growth, as developers are seeking new markets that offer similar benefits to major hubs, but at more favorable costs, and power availability.”

Europe: Data centre capacity demand remained consistent in the first quarter. Many European countries are adjusting their operations, strategies, and policies regarding data centre practices in an effort to increase data sovereignty, privacy, and security.

Power supply, the report states, also remained a challenge, limiting leasing and development in areas such as Amsterdam, Dublin, and London. As a result, markets where power is more readily available grew significantly within the last year, including Paris, Madrid, Milan, and the Nordics.

APAC: According to the report’s findings, the region’s geography presents a unique challenge, as different regions have their own distinct climates, infrastructure systems, power grids, and other logistical factors that make development challenging.

Despite obstacles, Singapore and Hong Kong are undergoing major developments as the demand for cloud services rapidly increases, though high demand has limited some options for future development.

Latin America: The report notes that “the market is currently experiencing a surge in growth, due in large part to strong industry tailwinds, including technology adoption and data centre investment. Prior to the pandemic, international hubs such as Dallas, Miami, and Los Angeles primarily serviced the region’s data centre needs, as most local enterprises had not yet outsourced their IT or undergone digital transformation.

“Today however, Latin America is expected to see the highest global growth in technology adoption. This will spark regional demand for colocation in key LATAM markets such as Mexico, Brazil, Chile, and Colombia over the coming decade.”

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Jim Love, Chief Content Officer, IT World Canada

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Paul Barker
Paul Barker
Paul Barker is the founder of PBC Communications, an independent writing firm that specializes in freelance journalism. He has extensive experience as a reporter, feature writer and editor and has been covering technology-related issues for more than 30 years.

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