Growth in Canadian Data Center Sector: Operators Illuminate the Benefits of a Canadian Data Center Site

July 5, 2014
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ImageCanada has been a favorable location for data centers for a long time. CIO noted that the country provides facility operators and service vendors a cool climate, low risk of natural disasters as well as proximity to the skilled workers present within the Canadian workforce. In addition, Quebec and other areas boast low utility costs, as well as a strategic location that is encouraging many businesses to expand in the region.

ImageCanada has been a favorable location for data centers for a long time. CIO noted that the country provides facility operators and service vendors a cool climate, low risk of natural disasters as well as proximity to the skilled workers present within the Canadian workforce. In addition, Quebec and other areas boast low utility costs, as well as a strategic location that is encouraging many businesses to expand in the region.

“We’re seeing large, global colocators with customers based in Europe and Asia who want to bring operations to North American but need regulations that protect the customer’s privacy,” noted Michel Cartier, Data Center Innovation Expo president and CEO.

Thanks to its Canada Privacy Act, as well as a host of other advantages, data center activity in the country has been spiking, with IBM, OpenDNS and Salesforce.com all announcing Canadian data center projects recently.

IBM’s Global Expansion
In late 2013, IBM went public with large-scale plans to bolster its global cloud service footprint. As part of these efforts, the company just announced that a Toronto-based facility would be among the 15 new data centers it is looking to establish, according to IT World Canada.

The Toronto facility, along with the other new locations, will leverage the SoftLayer platform, as IBM recently acquired the company. The sites were chosen based on the amount of client demands for the firm’s services.

“IBM is continuing to invest in high growth areas,” said Erich Clementi, IBM Global Technology Services senior vice president. “Last year, IBM made a big investment adding the $2 billion acquisition of SoftLayer to its existing high value cloud portfolio. [This] announcement is another major step in driving a global expansion of IBM’s cloud footprint and helping clients drive transformation.”

Besides Toronto, the company has also targeted markets in Washington, D.C., Dallas, Mexico City, India, China, Hong Kong and London for its worldwide data center growth.

Salesforce.com Adds Two Canada Data Centers
Another organization responding to increasing client demands in Canada is Salesforce.com, which recently announced that it would add two Canadian data centers to its service portfolio, stated Zacks Equity Research. The company noted that these additional facilities would help it make services available to small and medium businesses in Canada and would also boost its international market standing.

Industry research shows that this was the right time for Salesforce.com to expand its presence in Canada. Gartner predicted that the Canadian software market will grow by 8.7 percent this year. Additionally, data center revenues are poised to hit $3.4 billion by the end of the year.

“We believe that the company’s entry into new markets like Canada would provide a significant opportunity to grow beyond U.K., France and Germany, which have already reached saturation,” Zacks Equity Research stated.

OpenDNS Opens Two Data Centers in Canada
OpenDNS also announced investments in the Canadian data center marketplace recently, with the opening of two new data centers in Vancouver and Toronto. OpenDNS’s Andree Toonk noted in a blog post on their website that the company found the decision to expand in Canada a relatively easy one. He stated that when the organization evaluates a potential data center site, decision-makers examine a number of aspects, including the amount of users in the region, and the opportunities available to improve services. However, the deciding factor was the ability to keep data local.

“Canada is home to our second largest user base, second only to the U.S.,” Toonk wrote. “Up to last month, Canadian users were mostly using OpenDNS servers in our New York, Chicago and Seattle locations. With the addition of two new data centers, most Canadian users will now be routed to our servers in Vancouver and Toronto.”

This wasn’t the only thing that brought the company to Canada, though. Toonk also pointed out that the Toronto, in particular, is quickly becoming “the Internet capital of Canada.” OpenDNS is centering its Toronto operations in an Equinixfacility that is a major connectivity hub in the city, providing direct connections to a number of regional networks to improve the end-user experience.

Additionally, Vancouver boasted the new Internet Exchange, VANIX.

“We believe that with the new VANIX Internet Exchange and the brand new carrier neutral Cologix facility, Vancouver has the potential to become a major Internet hub for Canada,” Toonk wrote.