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Data Center Evolution: Major Markets Receive A Boost From Users Looking To Reduce Network Latency

Americans’ consumption of digital content has become insatiable. Imagine how dissatisfied users would be if their internet kept stalling or Netflix kept rebooting in the middle of a binge.

This is where managing network latency comes in to play for data centers, and it’s become an important factor when determining location, according to JLL’s Data Center Outlook report for 2016. Data center users are growing their presence in major cities throughout the country in hopes of reducing network latency and bringing reliable data to users with speed.

“Latency is the voidance of delay when you’re using your computer,” JLL managing director Jon Meisel (pictured left) tells Bisnow. “So if you want to call up a website and it takes too long to load you’ve got a latency problem. It’s the speed at which the information travels through the internet.”

The need to increase data centers' presence near customers is keeping top markets like Northern Virginia, S.F., Chicago and Dallas ahead of the game. Cloud and social media users, including Microsoft, Google, Facebook, LinkedIn, AWS and Oracle have recently absorbed a bunch of space, signing up to 55 MW of capacity in Q2.

“Latency continues to be a bigger and bigger concern for companies,” JLL managing director Mark Bauer (pictured above, right) tells Bisnow. “For example, Google and Microsoft having to move closer into the major markets where their customers are because their customers are demanding low latency on everything that they do.”

Mark said in the past users would merely find space in the cheapest markets, but that will no longer suffice. Data users are keeping those old facilities, and they’re expanding to major markets as well. In addition, the first wave of multi-tenant data centers’ 10-year leases are coming to term, JLL reports. This is allowing users to renegotiate for shorter leases and lower rates.

“The two main components for locating a data center have been low latency very robust fiber networks, coupled with inexpensive power costs,” Mark tells us.