New research report positions Chicago’s data center market fourth globally

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CHICAGO, February 10—The Windy City, long a hub for global trade spanning the full duration of the first three Industrial Revolutions, helped define America’s growth and maturity in commerce and trade, industry, transportation, as well as in society and culture. Now it enters the era of Digital Transformation, Industry 4.0 poised yet again as a global leader. 

For a long time the third-largest data center market in North America, a new Cushman & Wakefield research study, Data Center Global Market Comparison, positions Chicago as the fourth most influential global data center market. The study was undertaken by C&W’s Data Center Advisory Group research unit headed by Kevin Imboden. 

This new report, plus an economic study performed for the state by Mangum Economics to test the likely outcome of state tax incentives to spur new data center development, form the basis for a keynote roundtable at the Sustainable DigitalInfra Chicago Summit, “Towards Carbon Zero Digital Infrastructure 2030,” May 20, Chicago Marriott Marquis. 

In the assessment study, Chicago places globally only behind 1. Northern Virginia, 2. Silicon Valley and 3. Dallas, beating out, in order, such other global hotspots as 5. New York/New Jersey, 6. Singapore, 7. Amsterdam, 8. Los Angeles, 9. Seattle and 10. London to round out the top placers, with seven of the top 10 markets globally in the US.

“Chicago has always benefited from being a key connectivity hub in the middle of the country, and we’ve definitely seen a recent boost over the past year with the announcement of (tax) incentives available for the data center industry from the State of Illinois,” said Alex Smith, vice-chair with Cushman & Wakefield’s Chicago office.

“The speed with which the industry is shifting makes the creation of a data center strategy a complex and daunting task,” said Dave Fanning, executive managing director of the Data Center Advisory Group. “Enterprises must determine what to do with their on-premises facility, which workloads to move to the cloud and how to implement a hybrid IT strategy.

“Developers and operators require (property) with robust fiber and access to power as well as a thorough grasp of the permitting process and all risk factors. Investors must be able to assess the long-term potential of a data center to hold its value and how easily it can be upgraded. All involved require access to capital and a clear understanding of objectives.”

The study examines 38 global markets comprising 1,162 data centers around the world, applying its unique weighting methodology to rank 38 global markets to arrive at an overall top 10 ranking. 

The indexing compared markets against criteria as cloud availability, fiber connectivity, overall market size (the three “heavyweights” as well as the data center development pipeline, government incentive, colocation vacancy, political stability, environmental risk and overall sustainability (this latter two being the “lightweights”), land pricing, power costs and taxes. 

Key takeaways from the report, according to its authors, include the fact that the spread in the scores between the first three markets and all others was significant, meaning Northern Virginia, Silicon Valley and Dallas had a clear lead over all other global markets in the Top 10 ranking, with the others more tightly grouped.

The report also highlighted EU cities such as Zurich, Paris and Madrid are emerging as hyperscale contenders, assuming power availability. And the report doesn’t discount the “considerable growth” anticipated in Asia-Pac markets.

The “Towards Carbon Zero…” Summit Series, beyond Chicago, includes Northern Virginia, July 29; UK & Ireland (London), September 8; and Paris, September 24.

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