Expect Sustained Data Center Demand in First-Half of 2008

Implications: 1) Despite economic uncertainty, data center demand is strong. 2) The data center economy is smarter and stronger than ever.

Analysis: In the data center economy, with basic real estate on the left of the continuum and fully-outsourced, managed hosting on the right, I see continued demand all along the spectrum, including shell space, wholesale data centers and retail colo.  And with 45% of companies with more than $100MM in revenue planning to build/renovate in 2008, versus only 22% in 2007, it would appear I am not alone.  Combine that with the continued emergence of Internet businesses and it would appear that a near-term slowdown in activity is unlikely. 

And in the event of a slowdown?  Well, Equinix has what, four million sq-ft?  They have been a very cautious investor, and are anything but overextended.  A flight to quality would only benefit their business in the long run.

Savvis may be vulnerable.  With four new facilities, and their ongoing re-positioning as an integrated, facilities-based, managed service provider, their ability to execute is going to be tested.