Forecasting Data Center Supply & Demand

Implications: 1) Telecom and data center assets are highly specific infrastruture. 2) Both require significant investment and lead times to deploy. 3) For data center forecasts, the starting point is real estate.

Analysis: This article in some ways reminds me of Bernie Ebbers and his public comments on Internet growth back in the pre-bubble days.  It would be great if there were a way to accurately predict demand.

Specific to data centers, the reality is that while tracking public build announcements is relatively simple, monitoring the demand side of the equation is much more difficult.  How long will it take the market to absorb the 36MW DuPont facility in Chicago?

What I see in the market is continued demand for new product driven by the technology refresh cycle.  DuPont's facility has the latest, high-density space, making it some of the only space on the market.  They believe it will sell out before the end of 2008.  From where I sit, I'm inclined to agree.