January 19th, 2012: RBC Capital Markets
by Jonathan Atkin, David Coleman, Brian Hyun, Dave Rodgers and Michael Carroll
In this post we feature content from an analysis by RBC Capital Markets, LLC on Telecom Services, Towers, and Datacenter/Hosting Infrastructure.
During the 1990s and early 2000s, growth in the datacenter market mirrored the emerging trend of Internet-based businesses and broadband-capacity expansion. Aggressive datacenter investment construction ensued to accommodate the growth expectations in many Internet-based segments. However, significant overcapacity arose in the early 2000s as the technology sector and broader economy experienced a downturn, and many customers had committed to space they did not need or experienced business failures. During that downturn, many datacenter assets were decommissioned or consolidated. New construction essentially shut down starting in 2002. According to BroadGroup data, occupancy (square meters utilized) in the European datacenter segment declined in absolute terms by 14% during the 2001– 2003 timeframe.