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- October 1, 2017: Vol. 29, Number 9

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Cloudy with a chance of windfall: The powering up of data centers

by Michael Lester

1 Data needs a home. It can live in a small back room of a big office; it can live in servers stacked in cabinets arranged in hundreds of rows in huge warehouses. A data center is a hardware store full of servers, storage devices and network connections. “On a nonweighted percentage, the overwhelming majority of data centers are tiny closets and rooms with a handful of devices,” says Todd Smith, chief technology officer at Transwestern Data Center Solutions. “But on a weighted basis, IT infrastructure has been moving at an accelerated pace to large, third party–managed facilities.” And right now, publicly traded REITs are becoming dominant as the third-party owners of data centers. According to Smith, “The U.S. REITs — and one in Europe — make up about 25 percent of the global market of third-party data center owners and operators.” “It’s very difficult to be a one-off develo

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