Boston Data Center Market

Boston Data Center Market Analysis

The Boston Data Center Market is expected to register a CAGR of 3.5% during the forecast period.

• Boston is one of the most significant cities in New England and the eleventh most populous metropolitan region in North America, with the ninth largest GDP. The city has had consistent demand for colocation and wholesale data center facilities. Financial services, technological research and development, biotechnology, healthcare, education, commercial fishing, food processing, tourism, printing, and publishing are among the major businesses in Boston.
• Boston is also the state capital and the regional headquarters for several federal agencies, which generates government demand for data center providers. The metro Boston area comprises over 100 colleges and universities, which provide a well-educated workforce and significantly impact the Boston economy.
• Boston remains a fantastic area to expand, owing to an emphasis on green projects. Massachusetts has some of the country's highest energy rebates and incentives, making it an excellent site for any company's data center goals.
• While the region's concentration of data-driven global corporations and high-tech startups produces many new business opportunities across industries, the region faces severe data gravity concerns. This data explosion has significant consequences. This is because when more data is created and processed across organizational locations, the enterprise's management becomes increasingly complicated.
• Furthermore, with the outbreak of COVID-19, the country was significantly affected, which disrupted data center service providers in the region. Moreover, with the nationwide travel ban enforced in the country, many organizations adapted to work from home, which increased the data traffic significantly and put tremendous pressure on the data center, coping with the existing capacities to prevent downtime.

Boston Data Center Market Trends

Cloud Computing in BFSI will increase the demand of Data Center

• The BFSI industry has undergone a significant digital transformation in recent years. The increased penetration of smartphones and high-speed internet has encouraged people to opt for digital banking, which has also led to the integration of powerful cloud tools to store and analyze data. Such developments will generate significant demand in data centers for processing the data generated through the baking sector's digital transformation, boosting the Unites States market.
• For instance, new payment convenience concepts like Buy Now Pay Later (BNPL) are fast catching up in the United States, with promising adoption from the population. The gaining popularity of such fintech platforms contributes significantly to generating data, demanding data centers for the same. Klarna, a prominent BNPL service provider in the U.S., registered more than 20 million users in the United States in 2021, compared to 11 million in 2020 and 7 million in 2019, marking the United States as its largest market among all the operational regions.
• For instance, in February 2022, U.S. Bank announced a significant investment in modernizing its technology foundation by selecting Microsoft Azure as its primary cloud provider for U.S. Bank applications. Microsoft and U.S. Bank will work to develop new growth opportunities to allow the Bank to expand its partnerships and take advantage of an evolving financial services market. Through this significant technology investment, machine learning, and artificial intelligence will transform applications and infrastructure to create personalized, compelling, leading-edge experiences. The transition to the cloud by the Bank will also improve the security of data, financial assets, and customer privacy while adding resiliency for the U.S. Bank and strengthening technology risk management.
• In addition, with the growth in data generation, telecom companies are rapidly migrating to the cloud, and various I.T. companies in the region are launching industry-specific solutions, thus positively impacting the market growth. For instance, in February 2023, Microsoft announced to launch of its next-generation hybrid cloud platform, "Azure Operator Nexus," for telecommunication service providers. According to the company, modern network infrastructure will assist its telecommunications partners in monetizing and improving their existing infrastructure while lowering their overall ownership cost.
• Furthermore, advances in digitalization, such as solid e-commerce growth and the proliferation of mobile wallets, are likely to pave the way for the development of numerous new payment methods. The growing number of payment choices, like Apple Pay, Google Pay, and Amazon Pay, is expected to boost the rise of digital payments in the country. Furthermore, increased cloud migration in banks, growing digital transformation, and a surge in digital payments will likely generate massive amounts of data, driving the need for data center building.

IT & Telecommunication will drive the Market

• The significant demand in the region IT and telecommunication industries for data processing and storage of vast amounts of data daily has been one of the primary reasons for the growth of the data center market in the segment. Moreover, most of the major telecom companies in the world, such as AT&T, Verizon, and Comcast, have their presence in the country and some of the world's biggest IT companies, thus driving significant investments in the United States data center construction market.
• The spread of COVID-19 drove investments to modernize IT and telecommunication sectors with cloud technologies. This translated to a massive demand for hyper-scale data centers and caused significant investments to construct hyper-scale and internet data center facilities.
• Furthermore, consumer and business environments are rapidly altering with the rise of smart homes, smart cities, industrial automation, and over-the-top (OTT) services. These factors have created significant data for the country's telecom operators. To boost connectivity, telecom service providers are expanding their telecom services, such as 5G technology and broadband networks, which are expected to encourage data center construction in this industry.

Boston Data Center Industry Overview

The Boston Data Center Market is fragmented in that key vendors are utilizing inorganic growth techniques, such as mergers and acquisitions and strategic partnerships, to increase their market share. Some players include Digital Realty Trust, Inc., DataBank, Equinix Inc., Cyxtera Technologies, and Cogent.

In November 2022, Amazon acquired two Massachusetts data centers. State Street Corp. sold the two Worcester County, Westborough, and Grafton properties to the corporation for USD 26.7 million. Amazon paid USD 11.6 million for 600 and 800 Friberg Parkway in Westborough. The building at 600 Friberg is a State Street data center with a total area of 9,200 square meters (99,150 square feet). The 800 Friberg site is currently undeveloped. Both parcels total 19 acres. The Grafton property is a 14,400 square meter (155,000 square foot) structure on a 1.8-acre land on Centennial Drive. The property was purchased for USD 15.1 million by Amazon.

Boston Data Center Market Leaders

Boston Data Center Market News

• January 2023: TOWARDEX completed the first open-access utility entrance solution for fiber optic networks in the Boston area at CoreSite DC. The Hub Express System, a new fiber optic corridor, provides a hyper-scale network of underground conduits to accommodate carrier installations of more than 135 additional fiber optic cables, significantly increasing the area's digital infrastructure capabilities for interconnected data centers and laying the groundwork for the continued growth of internet traffic throughout New England.