The Las Vegas market for colocation has heated up significantly in the last six months, with expansion reports from providers reaching approximately 745,000 gross square feet. With the recent opening of Cobalt Data Centers and ViaWest, and anticipated opening of Switch’s new site, scheduled for May 2013, the total gros square feet will top 2,453,000 million, according to provider numbers.
What makes the market compelling to developers is its stable geography with few natural disasters. The challenge is that the local demand isn’t enough to support such a large inventory. Las Vegas and Clark County encompass roughly 75,000 businesses, and about 1200 of those have 50 or more employees. There are 150 to 200 enterprise data centers at organizations with 200 or more employees. While this provides a reasonable sized pool of opportunities for hosting, the market does not have significant demand for colocation. The market is or course heavily skewed toward tourism and retail, where there are high employee counts and a low amount of IT.
Data center provider success is be based on attracting tenants outside the local geography. While Southern California is the most compelling based on the need for stable and accessible DR facilities, Cobalt Data Centers has an accelerating list of clients from across the US, including Chicago and NYC.