We continue our series of stories on the leading geographic markets for data center space. Data Center Frontier is partnering with DatacenterHawk to provide in-depth market reports on each city we profile. This time, we explore the Phoenix data center market. The third entry in our four-part series explores Phoenix data center market supply and trends that are luring data center providers to the Phoenix area.
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From a geographic perspective, most of the colocation data center providers are located in Phoenix proper and Chandler, Ariz., a city approximately 25 miles to the southeast of downtown Phoenix. A Digital Realty-owned data center at 120 East Van Buren is also the prime carrier hotel in the downtown Phoenix market.
Digital Realty purchased the property back in 2006 and has grown it to be one of the largest in the market. Several other providers, including Iron Mountain (IO), Cyxtera and PhoenixNAP are located west of downtown Phoenix, near Phoenix Sky Harbor International Airport. QTS Data Centers has also procured land for a large future campus just north of Sky Harbor. Phoenix data center market supply is indeed growing, even for the surrounding areas.
A combination of lower electricity prices and real estate costs have lured data center providers to Chandler, prompting Digital Realty, CyrusOne, and NextFort to create facilities designed to meet the needs of large users. In addition, other areas including Tempe, Scottsdale, and Deer Valley have several data center providers.
A combination of lower electricity prices and real estate costs have lured data center providers to Chandler, prompting Digital Realty, CyrusOne, and NextFort to create facilities designed to meet the needs of large users.
Over the past 18 months, Mesa has also emerged as a sub-market, with projects in the pipeline from Apple, EdgeCore, CyrusOne and DuPont Fabros Technology (which has since been acquired by Digital Realty).
Over the past 18 months, the amount of planned power to be delivered in Phoenix has nearly tripled, from 265 MW in Q1 2017 to 707 MW in Q2 2018. These are planned projects that could be built if demand is there. Here’s an overview of some of the notable projects in development:
Iron Mountain commences new data center on former IO campus
In July, Iron Mountain launched construction on a 550,000 square foot data center on its Phoenix campus, on land adjacent to the former IO Phoenix facility. The project will add 48 megawatts of capacity in two phases, with the first 24 megawatts of capacity scheduled to come online in June 2019. Iron Mountain expects to invest $430 million in the new facility. Iron Mountain has invested more than $2 billion in data center acquisitions and development since early 2017 resulting in a 2.5+ million square foot global portfolio comprised of 12 data centers in four countries.
EdgeCore breaks ground on first data center on 7-building campus
EdgeCore, a new wholesale provider, officially broke ground on their Phoenix campus on a site located in Mesa. The campus is designed to accommodate seven buildings and an on-site substation. Each facility will include two main data halls, totaling approximately 180,000 SF and 32 MW of commissioned power operating at a PUE of 1.25 or better. EdgeCore plans to deliver the first 6 MW and 30,000 SF in 4Q 2018. EdgeCore is also active in Dallas and Reno, with plans to announce additional markets in 2018.
Big 4Q 2017 win for Aligned Data Centers pushes next stage of development
After signing a large lease with a tenant at the end of 2017, Aligned started to expand its Phoenix facility in 1Q 2018. The expansion plans include preparing additional space to accommodate 60 MW of commissioned power, which will be completed as demand presents itself.
Evocative comes to Phoenix with CyberVerse purchase
Evocative purchased CyberVerse in 1Q 2018, which added three data centers to Evocative’s portfolio. Included in the acquisition is the CyberVerse 600 kW lease inside Aligned’s Phoenix data center. The purchase also included a presence for CyberVerse inside both Los Angeles and Dallas.
Digital Realty now offering Oracle cloud
Digital Realty increased their cloud service offering in 1Q 2018 by adding Oracle Cloud Fast Connect to their Phoenix locations (among others throughout the U.S.). Similar to AWS Direct Connect or Azure ExpressRoute, Fast Connect provides a dedicated, direct, and secure link between a user’s colocation and cloud infrastructure. Oracle leases over 500,000 SF across 16 different Digital Realty data centers.
EdgeMicro to introduce mini data centers at cell towers
To accommodate future demand for IoT adoption, companies like EdgeMicro are going to begin installing micro data centers at the bases of cell towers. Doing so would help handle the increased amount of data generated from connected devices and self-driving cars, with very little latency. EdgeMicro announced a list of 30 different metros in the U.S., including Phoenix, where they would begin deploying these micro data centers.
Land banking provides expansion options for Digital Realty, QTS and CyrusOne
Several providers have secured property to provide runway for future capacity in Phoenix. QTS has an 84-acre site in Phoenix to support its growing focus on hyperscale deals, while CyrusOne (68 acres) and Digital Realty (56 acres) have land in Mesa for future campuses. Digital acquired the site through its acquisition of DuPont Fabros Technology, which has identified Phoenix as an attractive expansion market for its hyperscale product.
This Data Center Frontier series focused on Phoenix data center growth will also cover the following topics for the area:
- Market Overview & Analysis
- Trends in Demand
- Business Environment
Download the full Data Center Frontier Phoenix special report, courtesy of Iron Mountain.
And for further coverage, check out Data Center Frontier’s page dedicated to the Phoenix Data Center Market, that will provide the latest stats and info on this quickly growing area that is becoming a leading market in the colocation industry.
Data Center Frontier is edited by Rich Miller, the data center industry’s most experienced journalist. For more than 20 years, Rich has profiled the key role played by data centers in the Internet revolution.