Digital Realty and Mitsubishi partner to conquer Japan
Mon 23 Oct 2017
U.S. data centre real estate investment trust (REIT) Digital Realty is partnering with Mitsubishi Corporation to build data centres in Japan.
The joint venture will create a new company called MC Digital Realty, which will operate on a 50/50 basis between the two existing firms, and will start with an initial capital of more than 400 million Japanese Yen (approx. £2.7 million).
The new joint venture will use Digital Realty‘s Osaka facility and Mitsubishi’s Tokyo site as seed assets. These two sites are currently worth around 40 billion Japanese Yen, and MC Digital Realty plans on managing more than 200 billion Yen worth of data centre assets by 2022, both through the acquisition of existing properties and development of new ones.
According to Mitsubishi, the company will look to provide clients with robust facilities, high-level physical security, steady electricity supply, air conditioning and other key requirements.
Looking at the advantages of the partnership, the Japanese firm states that the joint venture will allow it to take advantage of Digital Realty’s large, global customer base, its strong design and construction credentials, and its experience in operating high-capacity data centres, while drawing on its own ‘significant expertise’ in the Japanese real estate and IT markets.
Mitsubishi cites several driving forces behind the partnership, including the rapidly increasing amount of data being created by the adoption of new technologies such as artificial intelligence, IoT, and cloud technology.
Thanks to the increased use of cloud applications and storage, the firm sees a higher demand for data centres. It notes, however, that there are not currently enough facilities in Japan to meet the increased demand from cloud service providers.
The joint venture will be one of the few providers of carrier-neutral, high capacity data centre providers in the country. As well as this, Mitsubishi states that it intends to bring in interconnection services into its portfolio as demand grows.
The Japanese data centre landscape differs from the U.S. and Europe, in that more companies, such as carriers and financial institutions, have their own data centres, meaning there are a greater amount of small data centres spread around the country.
In contrast, in America and Europe, companies such as Digital Realty, which provides third-party, high capacity data centres, have taken hold. Mitsubishi expects this trend to take place in Japan and is looking to place itself at the forefront of the movement.