Digital Realty owns, acquires, redevelops, develops and managestechnology-related real estate. It specializes in providingTurn-Key Datacenter and Powered Base Building datacenter solutionsfor domestic and international tenants in a wide range ofindustries, from information technology and Internet enterprises tomanufacturing and financial services.

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UnitedLayer says demand is up for services like collocation.Also known as co-location, collocation and colo, collocation refersto the process of locating IT and networking equipment at anoutsourced facility which has abundant and reliable data centerpower, mechanical systems and network access. Company CEO ArmanKhalili says the goal is to "stay ahead of the curve" by outpacingcustomer demand.

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But at the rate the digital universe is expanding, industryexperts say that's creating both challenges and opportunities. Justlast month, four former members of Staubach's National Contact& Data Center Practice took steps to help meet the challenge.The four--Pete Marin, Frank Lyles, Jason Chartrand and JimmyBailey--opened an Atlanta firm called T5 Partners LLC that willfocus on developing data centers.

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Marin says they want to "acquire or build centers from theground up and participate in ownership," adding that the firm israising equity and actively pursuing land and facilities for datacenters nationwide. "As we watched the expansion of the data centermarket over the past few years, we realized there is increasingdemand for more efficient data center solutions and the supply isnot keeping pace," Marin says.

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Statistic after statistic shows an imbalance between the supplyof digital data and demand for storage space. However, there arealso concerns that data center growth will lag because of theeconomic slowdown. In a recent report, Data Center Knowledge, awebsite devoted to daily news and analysis about the data centerindustry, warns it could be "crunch time."

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"Data centers are filled with servers and storage, and thedemand for the facilities is driven by trends in informationtechnology. But they are also real estate, and the supply of datacenters is governed by the ability to finance thesecapital-intensive building projects," it explains. Conditions inthe commercial real estate markets are emerging as major influencesin the future supply of data centers, it warns, and "for theremainder of 2008, the credit crunch is likely to be a major playerin the data center market."

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Late last year, HSBC delayed plans to construct a $139-million,275,000-sf data center in Niagara County in upstate New York. Theproject was designed to allow for future expansion to 350,000 sf,allowing HSBC to maintain and enhance their data operations forprocessing all bank transactions in the US and Canada.

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But HSBC, in a brief statement, cites "the current economicbusiness climate" for its decision to postpone the project. Itcontinues, "We remain in the planning phase and will takeappropriate steps to update local officials and surroundingcommunities as is necessary and appropriate."

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Plans to build other data centers, however, are moving ahead.One of the largest: Hartford Financial Services Group $100-millionbackup data center in Boulder, CO. IBM, which currently runs thecompany's primary data center in Hartford, CT, will build andmanage the center, which is designed to provide disaster recoveryin the event the Hartford data center is knocked offline.

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Economic development agencies nationwide are offering support.At the Spring Data Center World at the Las Vegas Convention Center,regional economic development agencies set up booths: the VirginiaEconomic Development Partnership, Nebraska Advantage, Temple(Texas) Economic Development Corp. and the North Dakota Departmentof Commerce. All four made it clear that they had space, andpossible economic incentives, for data centers.

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A fifth economic development agency, the town of Cedar Falls,IA, focused on the media. It distributed packages of economicdevelopment information addressing the region's advantages for datacenters.

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