The Los Angeles Data Center Market

The Los Angeles Data Center Market

Los Angeles is not only one of America's largest cities, it is also a global hub for commerce and finance. The region has a broad and diverse economy, but is most often associated with the entertainment industry. As Hollywood and other entertainment properties such as video games embrace Internet delivery, the Los Angeles data center market has grown to meet the demand—especially for colocation.

The downtown Los Angeles area has a strong presence of data centers. Demand in the Los Angeles market typically comes from companies already located in Southern California. The growing business environment continues to create data center requirements that remain in the region.

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Power Overview

Los Angeles' electrical grid is managed by the publicly-owned utility, Los Angeles Department of Water and Power (LADWP). Electrical transmission lines and substations in Los Angeles proper are plentiful, but in some areas they are decades old. Due to political and market factors that hobble the market's overall supply, the average electrical rates throughout the City of Los Angeles are extremely high. In the sprawling suburbs outside LADWP coverage area, rates can be a little less expensive but are still higher than most other data center markets. However, rates that are a few cents per kilowatt-hour less can make a big difference in total electricity costs for a data center. This is why so many data centers in the Los Angeles market are located in El Segundo and other suburbs where LADWP is not the electricity provider.

Connectivity Overview

Los Angeles' demand for high-performance connectivity is driven by several factors, but it's in no small part to the entertainment industry. AT&T, CenturyLink, Integra, Level 3, Sprint, and XO all run long-haul fiber connections through the center of the city. Cogent, Electric Lightwave, Verizon, and Zayo also offer long-haul fiber in the Los Angeles market but do not run through the areas of data center concentration. Regionally focused fiber networks have been developed by Edison, El Paso Global Networks, M-Power, Spectrum, Syringa, Telepacific, and Wilcon. Municipal fiber available in Burbank, Culver, and Los Angeles serve the data center-heavy areas.

Hazard Risk Overview

Despite the seismic threat on the West Coast, data center operators and users have grown accustomed to the risk. Data center providers in Los Angeles build facilities with redundancy and backup strategies in mind.

Los Angeles DATA CENTER MARKET OPTIONS

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