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HawkPodcast 31 - Data Center Predictions for 2H 2020

By Mike Netzer · 7/29/2020

This is an episode of HawkPodcast, datacenterHawk’s viewpoints on the data center industry. If you enjoyed this episode, you can check them all out on our blog. If you’d like to know when we release future episodes, you can subscribe here. You can also click here if you want to read our 2Q 2020 data center overview for North America and Europe.

2Q has wrapped up, you can read more about it on our 2Q 2020 data center market overview, but we’ve started to look forward to the 2nd half of 2020. Below are a few of the points we discuss in the podcast above.

Big demand in 2nd half of 2020

We think the 2nd half of 2020 will look similar to the 1st in that demand will continue to be pushed forward by big buyers all across the industry. The enterprise sector of the data center industry took a bigger hit from COVID-19, but we expect to see those businesses rebound with increased demand in 3Q and 4Q.

Markets that will be active in 2nd half of 2020

After seeing the trends from 2Q, we think that there a few markets primed for activity in the 2nd half of 2020:

  • Portland – Though only a handful of providers have a Portland presence, it continues to see healthy growth due to the attractive power costs and connectivity to subsea cables.
  • Chicago – Tax incentives passed in 2019 were a factor in winning opportunities in 2Q. Given the large population and need for companies to be near their users, we expect growth to continue through the second half of 2020.
  • Northern New Jersey – This market had a strong absorption quarter and continues to surprise in 2020 after it’s been quiet in recent years. Northern New Jersey had a lot of activity back in 2011-2013, so we think that there may have been some long term contracts in place that are now starting to expire, and naturally, some companies will be making decisions that could cause activity and movement in this market.

Data center growth in Europe

The European data center industry has different challenges than the US does, a main one being that the growth is happening in different countries. Even with those challenges, we expect to see hyperscale maturity in the major European markets. This growth should trickle down to the secondary European markets as well.

Other things we talked about:

Don’t forget to check out the rest of our HawkPodcasts and don’t miss out on our latest release of market data for the data center industry.

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