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Strategies & Market Trends : Value Investing

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To: anializer who wrote (33475)2/9/2009 4:46:44 PM
From: Grommit  Read Replies (1) of 78751
 
DFT -- I found this recent WSJ article.

The slowdown in new data-center facilities comes at a difficult time. To cut costs during the recession, many businesses running out of space in their own data centers have turned to third-party data-center providers to rent out space. Demand for these services rose 14% from a year earlier in 2008 and is expected to increase at similar or greater rates for the next several years, according to Tier1 Research.

Now the demand and supply is likely to diverge even more over the next few years, as the typical data center takes 12 to 24 months to build, says Daniel Golding, a Tier1 analyst. "It could be a big problem," he says.

"In the U.S., prices for space in commercial data centers could rise 10% a year compared with 3% a year typically, predicts Mr. Golding, the Tier1 analyst. But he adds that it is still cheaper for businesses to swallow such a price increase than build their own data center, because the facilities typically cost more than $1,000 a square foot and the price tag for a large center can exceed $100 million."
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