Seattle EXECUTIVE OVERVIEW MULTI-TENANT DATACENTER MARKET

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1 Seattle MULTI-TENANT DATACENTER MARKET This report provides an overview of the competitive dynamics in the Seattle market, a 451 Research Market Map of the competitors in the area, market share of the dominant providers, supply-demand and utilization trends, and discussion of planned multi-tenant datacenter builds. KEY FINDINGS The Seattle market benefits from very good connectivity, clean, relatively inexpensive power, good climate for cooling and the availability of multilingual staff, particularly Asian languages. The market serves as the gateway to the APAC region and benefits from demand originating from APAC multinational enterprises that want to establish a presence in the North American market, as well as North American multinational enterprises that seek to establish a West Coast foothold that provides connectivity to the APAC region. The Seattle market has experienced considerable expansion activity for the past couple of years, creating pricing pressure in the competitive market until more of the supply has been absorbed. Demand dynamics in Seattle can be somewhat unpredictable. As in Silicon Valley, IT firms in growth mode can boost demand significantly for a period (as Microsoft and Amazon have been known to do). However, once they reach a particular threshold such firms often build their own datacenters in low-cost locations such as Central Washington or Oregon and consolidate their infrastructure, exiting many of their leases in Seattle. Retail colocation providers, particularly those that offer cloud, hosting and/or managed services, continue to see demand for services beyond pure-play colocation. We continue to see growing demand from enterprises for a hybrid combination of services: colocation, hosting, hybrid and private cloud, IaaS and SaaS. Retail colocation providers continue to add or leverage strategic partnerships to offer these services in an effort to differentiate themselves from one another and from wholesale providers seeking smaller deals typically fulfilled by retail colocation providers. We also expect to see continued consolidation in the market, as smaller providers join forces with larger ones to gain economies of scale both in datacenter operations and in providing a hybrid mix of services. SEP 2015

2 451 RESEARCH REPORT SNAPSHOT TITLE Seattle: Multi-Tenant Datacenter Market ANALYST Rick Kurtzbein, Research Analyst, Multi-Tenant Datacenters RELEASE DATE September 2015 LENGTH 18 pages ABOUT THIS REPORT Seattle has experienced consistent and steady expansion activity for the past couple of years. It currently ranks as the tenth-largest North American MTDC. A strong business presence, significant national and international connectivity, and reliable low-cost power have created continued demand for both colocation and wholesale datacenter space. While seismic activity in the Pacific Northwest has been relatively low for the past two centuries, Seattle has seismic risks, which has been factored into datacenter design. This report provides an overview of Seattle s datacenter market, looking at the changing landscape and how it affects this area and influences the MTDC providers within it.

3 Seattle: Multi-Tenant Datacenter Market TABLE OF CONTENTS SEATTLE MULTI-TENANT DATACENTER MARKET 1 Figure 1: Estimated MTDC Operational Space by City Top 10 2 MARKET DRIVERS WHOLESALE DRIVERS Figure 2: Comparison of Taxes, Electricity Rates and Risks 3 PRICING TRENDS COMPETITIVE OVERVIEW 4 Figure 3: 451 Research Market Map for Seattle MTDC Providers, Figure 4: Seattle MTDC Providers 6 WHOLESALE MARKET SHARE LEADERS Figure 5: Seattle Wholesale MTDC Market Share Leaders 7 TOTAL MARKET SHARE LEADERS Figure 6: Seattle Total MTDC Market Share Leaders 8 Figure 7: Market Challenges and Innovations 8 MTDC SUPPLY AND DEMAND 9 Figure 8: Seattle MTDC Supply 9 Figure 9: Seattle MTDC Supply/Demand and Utilization 10 SEATTLE PIPELINE Figure 10: Seattle MTDC Pipeline 12 SEATTLE MTDC MARKET MAPS Figure 11: MTDC Map Downtown Seattle 12 Figure 12: MTDC Map Suburban Seattle THE 451 TAKE 14 METHODOLOGY 14 TERMINOLOGY 15

4 451 RESEARCH TAXONOMY 16 MTDCS RETAIL COLOCATION WHOLESALE DATACENTER INTERCONNECTION MANAGED HOSTING INDEX OF COMPANIES 19

5 Seattle: Multi-Tenant Datacenter Market ABOUT 451 RESEARCH 451 Research is a preeminent information technology research and advisory company. With a core focus on technology innovation and market disruption, we provide essential insight for leaders of the digital economy. More than 100 analysts and consultants deliver that insight via syndicated research, advisory services and live events to over 1,000 client organizations in North America, Europe and around the world. Founded in 2000 and headquartered in New York, 451 Research is a division of The 451 Group Research, LLC and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication, in whole or in part, in any form without prior written permission is forbidden. The terms of use regarding distribution, both internally and externally, shall be governed by the terms laid out in your Service Agreement with 451 Research and/or its Affiliates. The information contained herein has been obtained from sources believed to be reliable. 451 Research disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although 451 Research may discuss legal issues related to the information technology business, 451 Research does not provide legal advice or services and their research should not be construed or used as such. 451 Research shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice. New York 20 West 37th Street, 6th Floor New York, NY Phone: Fax: San Francisco 140 Geary Street, 9th Floor San Francisco, CA Phone: Fax: London Paxton House (5th floor), 30 Artillery Lane London, E1 7LS, UK Phone: +44 (0) Fax: +44 (0) Boston 1 Liberty Square, 5th Floor Boston, MA Phone: Fax: