Doug Adams's blog

A message from Doug Adams, President and CEO of NTT Global Data Centers Americas

April 22, 2020

As we move into the 2nd month of COVID-19 quarantine, I wanted to take a few moments to check in with our customers, partners and vendors during this challenging ongoing situation.  We are all clearly adjusting to a new reality as we have shifted to a remote working model and continue to implement new procedures to ensure the safety of our employees and customers who are required to still work in the data center. 

I personally have been adjusting to working at home, and our teams have done a great job adapting to 100% usage of video conference tools, although my dog Coco seems ambivalent to being on camera all day long. Although the majority of our teams are now working from home, we all remain committed to managing our data centers and ensuring that we are supporting our customers’ needs now and in the future.

We are continuing to work to bring new capacity to market 

We continue to work closely with our construction partners at all our sites to find ways to stay on schedule without putting anyone at risk.  Together with our partners, we have implemented new safety protocols and procedures to ensure that teams can safely continue construction on our data centers.  We remain on track across several data center developments in Oregon, California, Virginia and Illinois. 

How can our customers help? 

We are continuing to add new precautionary health and safety measures, including a temperature scanning protocol for everyone who enters any of our facilities. We are asking anyone who is not required to be in the data center to avoid coming in.  We have not closed any of our facilities at this time, but ask for your help in minimizing the number of people entering our facilities, and avoiding any non-essential contact within our facilities. 

Our team is here to support you 

If you have any questions about these protocols or procedures, please contact your account manager or your specific site contacts.  We are all dedicated to support our customers and maintain the highest levels of support across the data center, while keeping everyone safe and not spreading this disease.  

You can reach our NOC 24x7 Support team at 916-286-3000 to answer any questions and connect you with operations personnel at each site to assist with any needs that might arise.     

Thank you for your cooperation and patience at this critical juncture in the fight against the COVID-19 pandemic. We will continue to update you with any changes in procedures, and we look forward to resuming our normal operations as soon as we are able. 

Wishing you and your loved ones all the best,

Doug Adams
President and CEO

NTT Global Data Centers Americas

Why a robust intelligent infrastructure can help you decrease cost and complexity, improve performance, and innovate faster

Today, there are a number of ways of providing a backbone for your network. Thanks to the rise of hyperscalers, the role of the telco is being redefined. Instead of using a single provider, businesses are increasingly turning to the public internet. This has been accelerated by the maturation of SD-WAN technologies, an area that’s experienced massive growth in the last few years.

I believe that it’s important to evaluate all your options, given that there are now so many choices for connecting and improving the performance of your network, and how it connects to a hybrid cloud environment.

In my experience, with the accelerating growth of hybrid cloud environments, and an increasing dependence on hyperscalers to provide lower cost and more innovation, a good SD-WAN implementation can help you to:

  • increase business intelligence, reliability, and networking agility
  • reduce complexity, cost, and sleepless nights

In the year ahead, I expect to see more businesses relying on hybrid cloud to improve their performance and help them to innovate faster, while implementing a robust intelligent infrastructure to decrease cost and complexity. This will require investment in the relevant skills for the design, installation, and management of their new WAN for optimal performance.

This is certainly an exciting time for those of us working in the field of intelligent infrastructure. At NTT, we’re actively exploring all the new opportunities that recent technology advancements in this space are creating. We’re applying our research and development capabilities to explore how we can leverage these to innovate and push the boundaries of what’s possible. One of the current domains we’re working on is adaptive computing. It has applications in complex environments such as smart stadiums and safe hospitals, where information comes from a range of sources – massive video feeds, sensors, and so on – and a fast, real-time response is key.

We’re creating a new generation of capabilities for NTT data centers to tackle these complex scenarios and target 5G. Adaptive computing uses Field Programmable Gate Arrays (FPGAs), a new generation of semiconductor devices configured to manage and process massive amounts of information. We aim to create the first full-stack solution that can, for example, process information in real time from thousands of feeds from cameras, sensors, and other devices, as well as social media, to assist with fast decision-making and quality responses.

Read this article for more insights on the key intelligent infrastructure trends to watch in 2020.

In the Data Center Colocation Industry, Top Markets Matter

You may have seen some articles recently talking about the rise of secondary markets in the data center colocation industry. Cities often mentioned on a list of secondary data center markets include: Cleveland, Jacksonville, Kansas City, Milwaukee, Minneapolis, Nashville, and Pittsburgh.

For those of us involved in the data center industry, whether as suppliers or buyers, it is important to consider secondary markets as part of our data center strategy. But, it is also important to remember that top markets are top markets for a reason. The top six US markets (Northern Virginia, New York / New Jersey, Bay Area / Silicon Valley, Dallas-Fort Worth, Chicago, Los Angeles) represent over 70% of US sales, and the US represents over 50% of the world’s data center sales.

In short, in the data center colocation industry – top markets matter.

Let’s take a look at a few key considerations regarding data center colocation markets.

The Fundamentals of the Colocation Market are Sound

The good news is that whether you are looking at top markets, secondary markets, or a combination of the two, the fundamentals of the data center colocation industry continue to be strong.

Businesses of all sizes are taking advantage of the “pay as you go” model offered by colocation, shifting their financials from up-front capital expenses to ongoing operational expenses. Enterprises looking to replace aging in-house data centers or support the growth of their business applications are increasingly looking to colocation.  Cloud-based companies, both hosting and software applications, need a place for their systems to live. These cloud-based companies typically do not want to design, build, and operate their own data centers.

Economies of Scale Add Up

The data center colocation industry is vast, growing, and commoditizing all at the same time. This combination of attributes tends to drive economies of scale which can be more prevalent in top markets. The colocation providers that win in these market conditions have access to low-cost capital and then spread the infrastructure costs across a diverse and growing customer base. Scale economies are particularly strong in the wholesale colocation markets where multi-megawatt deployments are the norm.

Be Wary of Growth Rates

Most of the analysis of secondary markets talks about growth rates. As always, be wary of comparing growth rates across bases of different sizes. For example, the most recent report from 451 Research on data center supply in secondary markets lists Nashville as having 109,500 square feet of operational data center square footage. If the entire Nashville data center market grew by 50%, it would still not be as large as one of RagingWire’s data centers in the top market of Ashburn, Virginia.

“Competitive Mass” Helps Everyone

We’ve all heard of critical mass being required to get a market growing. The same concept can be applied to competition. Both buyers and suppliers benefit from having multiple providers of similar data center colocation offerings in the same market. Buyers benefit from having multiple options to compare, and the assurance of getting a fair price. Suppliers benefit from having access to the talent, technology, and potential customers that the market attracts.

In can be difficult to find “competitive mass” in secondary markets. For example, according to 451 Research, the top three providers in a secondary market typically have 50-70% of the operational space and these market leaders vary from city to city. In addition, secondary markets tend to have lower utilization rates and absorption per year when compared to top markets, leading to reduced market efficiencies. According to 451 Research, top markets achieved utilization rates over 80% while secondary markets had an average utilization rate of 68% in 2014.

The Drivers for Secondary Markets: Regulations, Network Optimization, Economic Development

As we have seen, there are a number of forces driving the top data center colocation markets. What’s driving the secondary markets? Regulations can require that data generated within a geography stay in data centers within the geography. For example, some hospitals build on-site data centers as part of their HIPAA regulations. Network optimization might drive you to have a data center in a secondary market as part of your global footprint. Finally, economic development incentives might attract data center companies to build a facility in a secondary market.

Conclusion: Top Markets Matter

Top data center markets are critical as part of your data center portfolio. Top markets offer dense fiber and robust telecommunications, reliable and cost effective utility power, experienced data center staff, and an economic environment that enables a data center ecosystem to thrive.

We expect that top markets will continue to drive the data center colocation industry while secondary data center markets will develop as spokes to the top market hubs, not as a replacement.

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