Montreal: An Emerging Data Center Market
At datacenterHawk, we analyze search frequently to understand what data center markets are drawing interest in North America. Over the past two years, two data center markets located in Canada have been among the top 15 most searched locations. One of those two markets is Montreal, and its emergence as a growing data center market has been taking place over the last few years for several reasons.
Montreal offers companies with data center requirements an attractive location to house their IT initiatives. For organizations with data privacy concerns, the city’s Canadian footprint provides increased protections related to data located in that market. Because of this reason, several data center transactions landed in Montreal and avoided other markets unable to guarantee this data safekeeping. Montreal provides economic advantages for the data center user as well. Data center users can save by participating in Montreal’s tax incentives, which are offered to companies that hire new IT professionals or use renewable energy. In addition, some companies are eligible to receive a 30% tax credit on certain R&D expenditures and a 5% tax credit for labor costs in multimedia titles. The city offers several operational cost advantages also, as the power cost in Montreal is extremely low. The use of hydroelectric power provides renewable energy at a cost of approximately $.04/kWh (USD), making the area attractive when compared to Toronto’s $.08-.09/kWh. The climate is also an advantage, as data center users and providers are able to utilize free cooling for up to 90% of the year. Montreal’s geographic location is within proximity to other major Northeast markets, like Toronto, New York, New Jersey, Boston, and Northern Virginia. Companies wanting to locate close but outside of these markets view Montreal as a legitimate option to accomplish this objective.
Data center requirements in Montreal come from a variety of companies, but a majority of Montreal’s data center absorption over the last few years has come from major cloud providers. Amazon, Google, Microsoft, and Softlayer have all established a Montreal presence during that time period. In March 2017, Google announced they planned to construct a data center in Montreal, which will be their first cloud presence in Canada. Amazon specifically chose to establish a presence in Montreal because the city’s inexpensive power costs. The presence of major cloud providers will greatly benefit companies in Montreal, and provides an asset for startups, as well.
Over the last several years, the Montreal colocation market supply has become more competitive, as data center users have expressed interest in growing in city. One of the data center operators in Montreal is Root Data Center, who currently operates two facilities there. Root’s success in attracting companies with data center needs originates from a number of factors, including facility efficiency. Their use of KyotoCooling systems and hot aisle containment creates a PUE of 1.15, a direct benefit to the end user. Root’s data centers also offer high-density data center solutions, averaging 6 kw per cabinet. The company is capable of retail deployments in 24-hours, and large scale deployments of approximately 3 MW in 90-120 days. Root’s ability to deliver highly efficient, highly customizable, and rapidly deployable data center capacity has been one of the primary factors in their ability to achieve success in the Montreal data center market.
While most North America data center market growth has taken place in large, primary cities, emerging markets like Montreal prove data center users are also looking for locations in smaller markets that are attractive from a cost perspective. We anticipate Montreal will continue to be a growing search market at datacenterHawk in the near future.