With low utility rates, solid fiber infrastructure and demand from large cloud users, Chicago is a growing data center market. But how big can it get as more end users look to the Second City for their data center needs?
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150 guests assembled under the big top we hoisted outside QTS's Chicago data center at Bisnow's 5th Annual Data Center Boom event yesterday to hear what our expert panelists had to say about the current and future landscape, and to get up-close and personal views of Chicago's newest entry into the market.
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Digital Realty Trust senior asset manager Rafal Rak says Chicago continues to have a lot of untapped demand from end users such as insurance companies and airlines that still have data centers in their offices, and are reluctant to turn over the responsibilities of maintaining that to an operator. Other end users like financial firms have become more comfortable with a shared infrastructure because it gives them a level of required redundancy built into their network and secondary sites. These firms are gravitating toward operators with proven track records of success, like Digital.
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Cushman & Wakefield EVP Alex Smith says data center pricing has been consistent between downtown and the suburbs and that the biggest driver of activity for the user is flexibility. Alex calls it the McDonald's/Burger King theory: suburban data centers want to be close to their users and, depending on the type of usage, end users want the same. Alex says data center deal activity is averaging 1 to 2 MW, while retail demand generally falls under 200 kW.
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JLL regional director Sean Reynolds (right, with Digital Realty Trust senior asset manager Steven Smith) says trading firms have been very active in the market, a trend he expects to continue. Fortune 1000 firms, however, still suffer from cloud paralysis. They want to show their boards there's a cloud and plan to utilize it in place, but they don't know what that is. Sean predicts we'll eventually see a hybrid of direct connectivity and cloud conduit.
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Snapped: the QTS Chicago data center team of QTS director of Midwest sales Bill Winsininski, Mortenson Construction general manager Andy Stapelton and QTS site director Nabon Marisco, along with ESD real estate consultant David Lambiaso. Andy says the building, a former printing press for the Chicago Sun-Times, lent itself well for repurposing as a data center. The building's central spine, where the printing presses were located, became the heart of the new data center's electrical gear.
Nabon says the site itself is unique for Chicago, a 30-acre campus near the heart of downtown, where land is at a premium for horizontal development. There's tons of growth capability to provide customers with custom data center solutions. The facility has amenities that are rare in a landscape where white space is maximized to generate the most revenue. The Chicago data center has a large customer break area, ample office space for clients who require it, and QTS is in the process of adding a gym. The facility provides 24 MW of critical power and will be adding another 8 MW in the near future.
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