Some of the hottest data center markets are found in some of the coldest parts of North America
By Maxime Guévin, Eng., MBA, Vice President & General Manager, Canada, Vantage Data Centers
Published in Issue 6 | May 2021
Canada continues to attract a number of companies and data center providers and is expected to grow at a CAGR of 3 percent between 2020 and 2025. The hyperscale data center market has been particularly robust as major cloud providers like Amazon, Google, Microsoft and others have migrated northward over the past couple of years.
While the entire country appears to be booming, there are some specific locations worth noting. Toronto continues to be in demand, in part due to its status as the country’s largest population center. Vancouver is up-and-coming, as evidenced by the recent news of Microsoft’s plans for a cloud hub. But the fastest growing location by far appears to be Montréal, thanks to its hyperconnectivity, skilled workforce and competitive rates for clean energy.
Let’s take a closer look at the growth drivers that have made the country a hotbed for new data center builds and acquisitions, and what the near future might look like.
SUPPORT OF ECO-FRIENDLY INITIATIVES
Sustainability is a critical initiative for data center providers and the companies using their facilities. A winning combination of cool temperatures and a commitment from Canadian utility companies to provide clean energy support this initiative.
Cooler temperatures lead to less energy consumption, and the Canadian climate is naturally colder than many parts of the developed world. The most efficient operators reduce the cooling unit’s utilization by using low external air temperature to cool server rooms. This process can, in many cases, cool a data center for free. With this is mind, data centers can save on cost by leveraging the colder environment, which allows providers to reduce the amount of cooling units needed compared to the number found on campuses in warmer climates. Pairing that natural advantage with power companies’ commitments to green energy makes for a highly favorable environment for companies that prioritize sustainability. Canada prides itself on its green energy initiatives, with a goal of having its energy grid be 90% clean energy by 2030. Companies like Hydro-Québec, which powers all the data centers in the province of Québec, are doing their part by being 99.6 percent green today.
Cleaner energy can lead to lower power rates. Hydro-Québec’s rates are one of the cheapest in North America, and the rate varies between 4 to 5 cents Canadian dollars per kilowatt of power in the city. Those low rates are very attractive, particularly to hyperscalers. Cheaper rates are better for their bottom lines given their large digital footprints and energy consumption.
STRONG FIBER NETWORKS
The fiber optic networks in major Canadian metropolitan areas are particularly strong and extensive. Toronto has long been considered the country’s telecommunications center. Data center operators within that area have access to a wide range of connectivity options, allowing them to easily deliver services to potentially millions of customers in the Greater Toronto area. Montréal is perhaps even better, with three times the number of fiber networks as Toronto. Latency in both these areas is very low. Low latency is a key selling point for many of Canada’s fastest growing industries. Montréal, for instance, has become a big market for artificial intelligence and gaming, both of which require a lot of data and near realtime responses. Meanwhile, Toronto remains a financial hub—another market that calls for fast response times and transactions. All areas are attracting cloud service providers that need to get closer to their customers. Strategically placed data centers, in areas with very low latency, can help them deliver services reliably and quickly.