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Market Opportunity Report Excerpt G R E A T E R N E W Y O R K C I T Y D A T A C E N T E R MARKET OPPORTUNITY REPORT EXCERPT Greater New York City Data Center Market Opportunity Report Greater New York City Data Center Market Opportunity Report Which Colocation and Wholesale Data Center Operators in the Greater New York City Area Are the Most Digitally-Savvy? 2018 Edition Introduction 5 Methodology 9 Differentiation in the Modern Buyer’s Journey 14 Thought Leadership Strategy and Website Authority 15 Competitive Positioning 56 Company Social Media Presence 69 Lead Generation 99 Paid Search Acceleration 112 Full-Funnel Revenue Growth and Digital Infrastructure 122 Ranking the Leaders vs. the Laggards 141 Summary of Rankings 152 The Bottom Line 154 Glossary 155 Feedback and Updates for Future Editions 162 Data Center Sales & Marketing Institute Page 1 ​ ​ Greater New York City Data Center Market Opportunity Report Introduction The data center industry is changing fast, and the Greater New York City regional market is no exception. Company-Specific Changes ● AT&T still wants to sell off its data center business including facilities in Manhattan ​ (NYC2 / 811 10th Avenue) and Piscataway, New Jersey (PNJ1 / 3 Corporate Drive North). ● Cyxtera Technologies has closed on the purchase of six data center facilities in the region formerly owned by CenturyLink. Its locations in the Garden State now ​ include Jersey City, Newark, Piscataway, and Weehawken. ● Digital Realty has closed on the purchase of DuPont Fabros Technology. This ​ brings its footprint in the Greater New York City area to 11 facilities in Manhattan, Trumbull, Connecticut and throughout Northern and Central New Jersey including Clifton, Piscataway, Totowa, and Weehawken. ● Equinix has closed on the purchase of Verizon’s data center portfolio. Its 11 ​ facilities in the region now span from Elmsford, New York to Manhattan to an extensive footprint in Secaucus, New Jersey as well as North Bergen, Newark, Carteret, and Piscataway. ● Iron Mountain has closed on the purchase of IO Data Centers. This gives Iron ​ Mountain presence in Edison, New Jersey. Regional Macro Factors ● The Greater New York City area continues to be the fifth largest colocation and wholesale data center market in the United States because there are so many ​ companies headquartered in the region, especially within the financial services, healthcare, media, pharmaceuticals, and telecommunications industries. However, the region used to have even stronger U.S. market share -- only second to Northern California/Silicon Valley. However, the growth of data center markets in Chicago, Dallas, and Northern Virginia have taken share from the Greater New York City region. (Source: Michael Rareshide of Site Selection Group) ● The financial services industry continues to impact the data center marketplace in the Greater New York City area. For example, modern trading platforms demand very ​ low latency. And following the Great Recession in 2008 and Superstorm Sandy in 2012, many companies in the region began to see greater value in outsourcing to colocation and wholesale data center providers for both CAPEX reduction and greater business continuity. (Source: Rich Miller of Data Center Frontier in partnership with David Liggitt of DatacenterHawk) Data Center Sales & Marketing Institute Page 2 ​ ​ Greater New York City Data Center Market Opportunity Report ● Investments in smart buildings (Internet of Things - IoT) from companies within ​ healthcare, cloud services, IT, entertainment, and media sectors will require significantly more colocation and carrier capacity in the Greater New York City region, especially within the five boroughs. (Source: JLL) ● The region’s market growth has lagged following Superstorm Sandy, as well competitive disadvantages with a lack of tax rebates and power incentives, and limited available capacity. However, population density, proximity to financial, ​ healthcare, and other data-intensive companies, and highly-trained IT staff still makes the region very attractive for colocation and wholesale data center buyers and operators. (Source: New Jersey Business & Industry Association) But it’s not just the data center industry going through dramatic changes and challenges. The broader IT and business marketplace in the Greater New York City region -- including Long Island and much of New Jersey and Connecticut -- is seeing tremendous transformation, growth, and disruption. Population Growth United States Census Bureau estimates still see the region as the most populous in the nation with the biggest population growth in recent years (from 2010 Census to 2016 estimates) in Hudson County, New Jersey (6.89%), Bronx County, New York (5.10%), Kings County, New York (4.84%), Queens County, New York (4.59%), Bergen County, New Jersey (3.76%), New York County, New York (3.65%), Union County, New Jersey (3.57%), Middlesex County, New Jersey (3.36%), and Somerset County, New Jersey (3.19%). Especially notable, colocation and wholesale data center providers have facilities in half of these counties. Even before considering how this population growth impacts digital transformation and requires more data center capacity across a handful of especially data-centric industries, we’re already seeing drastic changes in buyer preferences -- regardless of whether we’re talking about influencers or decision makers. Changes in Buyer Behavior Starting with the release of the original iPhone in 2007, the way people research and make purchase decisions changed. Word of mouth. Cold calls. Cold emails. Interrupting people with obnoxious, self-serving advertising. Direct mail. Print advertising. All of these marketing channels that were mainstays of business development playbooks, literally for decades (1980s, 1990s, and early 2000s), have been called onto the mat. In nearly all cases, these channels have become far less effective and have gotten far more expensive. Why? People grew tired of interruptions and proved they were willing to pay to get what they wanted (no more, no less), exactly when they wanted it, 100% on their own terms. Data Center Sales & Marketing Institute Page 3 ​ ​ Greater New York City Data Center Market Opportunity Report The empowerment rooted in search engines, social media, mobile devices, and cloud computing has fueled entirely new business models based on selective consumption of information. People subscribe to streaming video services like Netflix and Hulu -- and use DVRs -- to avoid watching commercials. People subscribe to satellite radio providers like SiriusXM to avoid annoying radio advertising. What many miss: all of these personal preferences that may start at home don’t stay at home. These same influencers and decision makers, and all the other stakeholders that purchase data center-related products and services, bring these preferences into the workplace. The Great Paradox That’s Not Sustainable Ironically, the data center, mission critical, cloud services, and telecommunications industries have benefited greatly from all of this growth in demand. Yet many of those in leadership roles at outsourced data center providers have failed to appreciate how these changes impact demand generation, desired customer experience, differentiation, competitive positioning, and their ability to stave off market disruption. Technologies like Gmail’s Priority Inbox make it tougher for any commercial email to make it to the Inbox. And do people answer their phones anymore without checking caller ID? The rules have changed for businesses of all sizes and shapes -- including colocation and wholesale data center providers in the Greater New York City region. Their clients and potential clients have become accustomed to -- in many cases, addicted would be the more accurate term -- using search engines, social media, and mobile devices to find answers to questions and seek out solutions to problems. Staying Relevant in a Buyer-Centric World Regardless of required power, bandwidth, space, or industry-specific needs, this behavior change has completely upended the buyer’s journey -- the active research process someone goes through in between when that person begins searching for answers and when that person becomes a paying client. In the pre-iPhone era, potential clients reached out to IT companies like colocation and wholesale data center operators for information when they were 10% to 20% of the way through their decision-making process. Those days are long, long gone. Today, as much as 70% (or more) of their decision may be over before a potential client even reaches out to a colocation or wholesale data center provider. Data Center Sales & Marketing Institute Page 4 ​ ​ Greater New York City Data Center Market Opportunity Report This change in the decision-making process presents enormous challenges to most data center operators in the Greater New York City area that are stuck in the past, using the same business development, marketing, and sales playbook that they’ve used since the 1980s and 1990s. But digital transformation also presents enormous market opportunities for digitally-savvy data center providers that can get found by the right influencers and decision makers, in the right places, at the right time, and most of all: in the right context -- to be seen as trusted advisors and educators, rather than just IT vendors. In the Greater New York City Data Center Market Opportunity Report, we’ll explore which ​ ​ colocation and wholesale data center operators in the Greater New York City area are the most digitally-savvy
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