Hartford Business Journal

12 HARTFORDBUSINESS.COM | JANUARY 13, 2025 company to apply for benefits under the program, according to a DECD spokesman. The health insurer is upgrading its 153,462-square-foot data center at 9 Griffin Road North, in Windsor. The cost of the renovation is about $380 million. Cigna did not respond to a request for comment. Connecticut has about 60 data centers, according to datacentermap.com. DECD Commissioner Daniel O'Keefe supports leveraging the economic benefits of data centers, but said the state isn't likely to further incentivize them. "The state of Connecticut is a denser state than other states in the country, and regionally, our energy costs are comparatively high to other places," O'Keefe said. "So, it isn't necessarily a deeply logical place for a massive amount of data centers." He added: "If there's an investment in compute that makes sense for our industries or academic institutions, there are ways to do it." Despite it not being a priority, DeSantis said he isn't opposed to running a data center in Connecticut. If he were to do so, it would probably be in Fairfield County, he said, due to its proximity to businesses in New York City. Companies prefer to rent space at data centers they can access by train or via a short drive. Data centers don't tend to create a large number of jobs, but they do require millions of dollars of invest- ment each year to maintain their infrastructure, DeSantis said. They support jobs indirectly, because more companies will stay in regions with data centers that can support their infrastructure needs, he said. Evolving business Meantime, 365 Data Centers is working to adapt to a changing business climate. Around 2014-15, some businesses began switching from colocation to cloud services, which offer nearly unlimited storage capacity and a pay-as-you-go structure. "There was a bit of cannibalization of (colocation), as the cloud opportu- nity became available," DeSantis said. While cloud hosting is still growing faster than colocation, DeSantis said some customers that switched to the cloud are now returning. Also, many industries in the North- east — including health care, financial services, higher education and tech — prefer colocation because it gives them more protection and control over their data. "A lot of this has to do with the proprietary data and the proprietary applications they run," DeSantis said. Some companies are also choosing a hybrid-cloud deployment, he said. As a whole, the data center industry is expected to continue growing, driven by "the rapid digitalization of businesses and rising investments from colocation, cloud, Internet and telecommunication providers," according to the 2024 U.S. Data Center Colocation Market report. For example, telecom companies such as AT&T and T-Mobile are deploying 5G services, which offer faster speeds, more reliable connec- tions and higher capacity — and are preparing for the adoption of 6G technology. The U.S. data center colocation market was valued at $12.4 billion in 2023, and is projected to grow to $26.95 billion by 2029, according to the report. DeSantis said the proliferation of AI is requiring data centers to run more powerful equipment that uses more electricity. 365 Data Centers may, in the future, purchase an AI data center, he said. For now, the company is upgrading its data centers to provide enough power to meet customers' needs. "I lead the company in a way that we want to keep every customer we have," DeSantis said. "To me, it's very important, because I'm an owner, it's reputational to me." The outside of a data center in Philadelphia owned by 365 Data Centers. CONTRIBUTED PHOTO THU, MAR 6, 2025 — 7:30PM Global Affairs Perspectives on Today's Changed World and Looking Ahead to 2050 Live and unscripted at The Bushnell Tickets on Sale ctforum.org With Admiral James Stavridis Anne Applebaum Yamiche Alcindor Moderator How will the world order be reordered? LIFETIME VISIONARIES: Connecticut Public | The Hartford Financial Services Group | Lincoln Financial Group | RTX Corporation | The Rosalyn Group | Travelers Data Centers Continued from page 11

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