Shanghai Bolsters Data Center Hub as Demand Spikes

By Alex Tam, Managing Director, Equinix Greater China

The surge of data through China is moving at a staggering rate and the confluence of data intensive activity in our economy means that demand for the best of breed in data housing is at an all time high.

China is one of the fastest growing markets in the Asia-Pacific region and as such continues to be strategically important for many multinational companies as they seek to gain a foothold on the mainland. As financial power centers, Beijing and Shanghai are experiencing the biggest demand for data center space with satellite cities also drawing expectant demand.

This strong demand for premium data center services has led to expansion of our footprint in China with the launch of the second phase of our Shanghai data center, SH5-II. With over a quarter of data center infrastructure in China currently outsourced, the demand nationally is poised to accelerate rapidly and Equinix is preparing for demand from high-end customers.

SH5 is being built in three phases and once completed will provide a total capacity of 900 cabinet equivalents over a gross area of 80,000 square feet. Internationally active customers deployed in SH5 will be taking advantage of Equinix‘s global footprint across 31 markets and our rich business ecosystem to connect directly to other companies outside of China, giving them the flexibility to scale rapidly and grow their businesses.

Demand for premium data center services continues to outpace supply in China. China’s data needs are being pushed by the same currents that drive demand all around the world. With a rapidly inflating Internet population and the rise of usage of social media and mobile applications, the need for new data center capacity is inevitable and insatiable.

Meanwhile beneficial factors continue to bolster the evolutionary growth rates with the Chinese government continuing to invest heavily in innovation and technology development, especially cloud technology. This has fostered demand for data center capacity and helped promote new innovation on the technology front.

Analyst firm Gartner has shared in recent studies that data center modernization remains a key strategic investment area for businesses in China, with virtualization-led consolidation and cloud computing as the common thread across most projects. As China’s data center capacity is expected to grow at an 11.3 percent CAGR through 2016, the timely expansion of Equinix’s data center facility in Shanghai will prove critical to international and local businesses in their IT upgrading projects.

China’s data center demand is specifically driven by its healthy and robust economic growth. As one of the fastest growing economies, the online realm is fuelling new business development in addition to our foundation engine of financial services. With a government mandate to keep specific content housed locally, China’s data housing demands are not only being fuelled by internal growth and development but by global players wanting to operate, engage and enter the lucrative and dynamic China frontier.