Boston’s rich tech history paves the way for data centers

Strong customer groups in higher education, biotech, and pharmaceuticals are driving demand for data center space in the Greater Boston market. (Photo: Digital Realty)





























































































































































































































This week, we wrap up a series of special reports on the Boston data center market by examining some key market updates and the city’s rich technology history.

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Establishment of cloud and connectivity hub in New England bolsters demand in Boston

Local data storage and the low latency needs of data center users continue to be catalysts for the development of the Northeast as a regional data center hub. While many end-user needs are greater in Northeast Northern Virginia, businesses still value the proximity of their IT infrastructure to their offices. As a result, the Northeast is growing as a necessary region to host data center operations to meet these regional demands. Boston, alongside New Jersey, New York, and Connecticut, is turning into a data processing and communications corridor.

Since downtown areas are typically rich in power and fiber optic infrastructure, these areas typically offer converted office buildings providing shell leasing opportunities for data center operators.

H2 2021 development activity in Boston:

  • Digital Realty accelerates its development of commercial colocation and offers new scalable turnkey solutions from the 1st quarter of 2022
  • Lightpath extends Boston’s regional fiber optic network
  • AWS Establishes Boston Local Zone
  • Telia expands to Boston with CoreSite
  • Markley Group adds Google Cloud Interconnect services

Data center development in Boston is finding its way into both the downtown and outer suburbs of the city

This is a trend that can also be observed in other American markets. Since downtown areas are typically rich in power and fiber optic infrastructure, these areas typically offer converted office buildings providing shell leasing opportunities for data center operators.

Downtown Boston is home to the massive Markley Group Transportation Hotel, offering colocation, cloud and connectivity services in the 920,000 square foot facility. The data center provides access to over 80 network providers as well as the Boston Internet Exchange.

Boston is well insulated from cyclical economic trends due to the high concentration of major universities, financial services firms, and established medical and life science institutions.

Cogent, CoreSite and INAP all operate facilities on Innerbelt Road, which is also close to the city centre.

Providers like Digital Realty and Cyxtera are located in surrounding suburbs, primarily in Waltham, Needham and Burlington. Digital Realty is the largest data center operator in Boston, with nearly 20MW of capacity across three suburban facilities, offering colocation, interconnect, cloud and hybrid solutions.

Boston: a rich technological history and a diversified economy

Boston has a diverse economy, the 8th largest GDP in the United States, and an unemployment rate of just 3.7% (compared to 3.9% nationally). These statistics alone position the city for long-term viability as a data center market. As cloud platforms and local on-ramps allow enterprises to do more with less, Boston is poised to continue to benefit from enterprise colocation and regional/edge computing requirements.

Boston is well insulated from cyclical economic trends due to the high concentration of major universities, financial services firms, and established medical and life sciences institutions. It is also the regional hub for the entire New England region, with major roads, fiber networks, and transportation routes running through the city.

Boston also has a very rich technological history. Bolt Beranek Newman (BBN) was founded in 1948 by graduates of the Massachusetts Institute of Technology (MIT) and became a computer pioneer who implemented the ARPANET, the predecessor to the Internet. In 1955, Business Week published an article titled “New England Road Upends Old Way of Life” and called Route 128 a “magical semi-circle”. In 1958, it needed to be widened from four lanes to six, and the company’s growth continued, often driven by technology from Harvard University and MIT.

However, the region’s fortunes changed with the emergence of the personal computer, which brought hard times to the minicomputer industry. Massachusetts lost 30,000 tech jobs in the mid-1980s as the center of gravity of the US tech scene shifted to Silicon Valley. There were some successes, including the rise of Lotus Development and its Lotus 1-2-3 spreadsheet and Notes groupware system.

The 1990s saw the rise of EMC Corp., the Hopkinton-based technology company that became the market leader in data storage. The late 1990s saw two MIT researchers launch Akamai Technologies, a pioneer in content distribution to improve website performance. Akamai remains the market leader
in the CDN industry, with more than 216,000 servers delivering content in 120 countries.

The region was also a pioneer in the field of robotics, again led by several leading companies started by MIT scientists. iRobot, which was founded in 1990, became known for its Roomba consumer vacuum cleaner, but also distinguished itself with military robots that detect and eliminate explosive IEDs in Iraq and Afghanistan. In 2011, robotics company Boston Dynamics was acquired by Google, where its quadruped robots became viral video sensations.

Download the full report, Boston Data Center Market, courtesy of Digital Realty, for exclusive insight into the top service providers in the Boston market. The report profiles ten data center operators in the region.

Ramon J. Espinoza