Moment of Opportunity

I often get calls from reporters researching stories about data centers, who inevitably end up on the CarrierHotels.com site. These calls increase when a major player files for bankruptcy or closes facilities. Gloom and doom makes for good headlines, but often leaves part of the story untold. That's the case with today's Wired story, which quoted myself as well as Joe Suppers of Node Com. As reporter Joanna Glasner noted, there are many data centers for sale, and C&W and Sprint will place additional pressure on a struggling market. But make no mistake: this is a moment of extraordinary opportunity for data center acquirers.

It's true that few hosting companies are seeking large data centers. But that's not where the action is. Many of the data centers now on the market will make excellent disaster recovery centers for enterprise companies. Wall Street has figured this out, and a growing number of financial firms are shopping for quality data centers.

The current market conditions expand that opportunity. It's not only Wall Street that needs to invest in business continuity. Joe Suppers likens it to insurance - you may think you can get by without it, but if disaster strikes you could be out of business. After the Sept. 11 attacks, most large data-intensive corporations vowed to take steps to enhance their disaster recovery efforts.

Yet it was a much smaller group that followed those promises with action. Recent surveys on disaster recovery by mi2g and Robert Half Management Resources reinforce earlier findings that between 30 percent and 50 percent of corporations lack a thorough disaster recovery plan. That's not because they think it's a dumb idea. It's because they think they can't afford it, especially in today's economic climate.

That may have been true when folks were spending $60 million to $100 million to build data centers. If a company has a need for a mission-critical facility, the resale prices on these buildings offer a compelling case for action. That's why we've seen an acceleration of deals in the last six months, and why there are more in the pipeline in the months to come.

It's easy to look at the industry today and see the glass as half empty. But in years to come, the companies that are buying data centers may well look back and see the glass as half full.