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New York Data Center Market Overview

Why Have a New York Data Center

New York City is the largest metropolitan area in the United States with over 22 million people. There are also nearly 125 million people on the Eastern Seaboard of the United States. This number of people represents an excellent opportunity for companies with distributable content to more seamlessly connect with their customers. A New York data center also enables enterprises based in New York to have data and processes closer to employees. This can reduce the latency of business operations. Further, instead of having to cross bridges, pay tolls and spend precious IT resources on travel time, a local enterprise can easily access New York data centers located in and around Manhattan. Some of the key data centers evaluated here include 60 Hudson, 111 8th Avenue, 325 Hudson and 32 Avenue of the Americas. Deploying a data center in proximity to a headquarters location is a highly-utilized strategy by the world's largest organizations.

There are more than 650 unique networks that peer in the New York/New Jersey area, making it one of the top points of interconnection in the world. Not only can buyers find lower network costs and a wider array of communications services, but having a New York data center can enable direct network access across parts of Canada, Europe, Asia and even South America and Africa. A direct connection can be established with a specific network and networks can take advantage of several Internet exchanges including DE-CIX New York, NetIX, NYIIX, Equinix New York and Digital Realty New York.

New York Data Center Options

There are many buildings from which to choose for a New York data center, however, we look herein at only some of the largest and most prominent. Historically, people have thought of New York data centers as only 60 Hudson and 111 8th Avenue. Going back two decades or more, these data centers served as the primary points of carrier-neutral interconnection for New York City. Since the late 2000's, however, there have been several additional New York data centers that have risen in prominence.

60 Hudson

60 Hudson was once known as the Western Union Building and is located in Tribeca. The Art Deco building was designed by Ralph Thomas Walker who also designed 32 Avenue of the Americas, another New York data center. 60 Hudson is regarded as the legacy point of interconnection in New York City for copper-based telephony services. Consequently, there are many international networks located at 60 Hudson. There are multiple data center providers within 60 Hudson, including Equinix, who recently announced the closing of their data center there.

A challenging point to consider in evaluating 60 Hudson is the fact that each data center provider acts as their own, independent ecosystem. While more than 150 networks have a POP at 60 Hudson, it can be a physical challenge and economic burden to connect from one data center provider to another in order to access a remote network.

111 8th Avenue

111 8th Avenue is owned by Google and is located in New York's Chelsea neighborhood. Originally one of the primary points of Internet interconnection, 111 8th Avenue has seen a decreasing communications ecosystem since Google acquired the building in 2010. Physically one of the largest buildings in New York (2.9 million square feet), Google has shown more interest in constructing office and commercial space at 111 8th Avenue than in growing the interconnection community. Over time, 111 8th Avenue is expected by many experts to not serve any carrier-neutral data center requirements. Ultimately, it remains to be seen what will become of data centers at 111 8th Avenue managed by the likes of Digital Realty, Databank, FiberNet, and CrownCastle.

We recommend that all prospective customers steer clear of 111 8th Avenue due to the lack of surety as a long-term data center location. Existing customers would be wise to have a contingent plan when/if Google management would like to convert data center space to an alternative commercial use. Relocating a data center can be a time-consuming process that puts commercial contracts and business operations at risk. With this said, 111 8th Avenue still serves more than 150 networks with access to multiple New York Internet exchanges.

325 Hudson

325 Hudson is a 220,000 square foot building that was recently purchased by DivcoWest, a vertically-integrated real estate firm. DivcoWest is working directly with H5 Data Centers to manage and grow the existing interconnection ecosystem. This is unique for the New York data center market as often there are multiple data center providers in the same building that may not 'play nice in the sandbox' together. Located along the Hudson fiber corridor, 325 Hudson boasts access to more than 40 unique carriers and access to Internet exchanges such as DE-CIX New York and NetIX. The building offers excellent rooftop line-of-site to New Jersey buildings and is centrally located in New York City between 60 Hudson and 111 8th Avenue.

Historically there has been an opportunity to deploy without having to pay incremental cross connection charges.

32 Avenue of The Americas

32 Avenue of the Americas (also known as the AT&T Building) is a 27-story, data center in Tribeca. As mentioned above, the 32 Avenue of the Americas building was designed by Ralph Thomas Walker who also designed 60 Hudson, another New York data center. Once owned by AT&T, the building is now a mixed-use facility that houses several data center providers such as Digital Realty Trust and CoreSite. Digital Realty Trust manages the legacy meet-me room for the building.

What is the Requirement?

Each data center deployment is unique and finding the right data center will largely depend on what the goals are for the deployment. Does the organization plan to distribute content? Will the location serve as an 'on-ramp' for cloud services? How many network connections will be required and what networks will likely be selected for services? Is the deployment more of a traditional enterprise IT footprint? How would this New York data center site fit into the organization's disaster recovery and business continuity plans?

These are some of the key questions to answer before making a decision on a New York data center location.

How to select a New York Data Center

Ultimately, the desired use of the data center, economic package and specifically with whom you are trying to connect should largely dictate which New York data center you choose. However, there are some other important circumstances and criteria that one could consider.

Some additional criteria to assess when selecting a New York data center:

  • Is the building landlord also the direct data center provider or closely aligned? If not, there is more risk to deploying and maintaining a New York data center in that kind of environment.
  • What are monthly recurring cross connection fees? If necessary, how can connections be made outside of the providers' specific data center suite?
  • How did the data center fare during Hurricane Sandy? Is it read for potentially worse flooding in the future and associated power outages?
  • Can the initial deployment scale to be 1-2x larger?
  • Is the building a potential at a higher risk for a terrorist attack?

Sourcing a location for a New York data center can be a difficult task and there are many criteria to consider. Evaluating these data centers and others in the surrounding metro area can be a great place to start. For interest in a quote for 325 Hudson, please click here.

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