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Digital Realty Expands Facility to Enhance Customer Experience

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Data Center REIT — Digital Realty Trust (DLR - Free Report) — recently announced the opening of Global Operations Command Center in Clifton, NJ. The move is aimed at optimizing customer experience by offering superior monitoring, rapid response and disaster recovery. Such efforts will eventually help the company continue its business efficiently and ride on growth curve as well.

Specifically, Digital Realty’s new command center would help customers quickly adjust to changing technologies. Moreover, per management it would enable “to better utilize the right tools to correlate events, automate certain tasks and provide visibility into network health”.

Notably, Digital Realty has consistently strived for attaining operational excellence. In fact, for the 11th consecutive year, the company has achieved "five nines" of uptime, surpassing 99.999% availability throughout 2017. This reflects its efficiency in developing and delivering data-center solutions, which can be relied upon by customers.

This operational excellence has been achieved despite growth of the company’s portfolio over the years — expanding from 74 data center suites at the beginning of 2007 to more than 750 by the end of the year.

With projected growth in cloud computing, Internet of Things and big data, and an increasing number of companies opting for third-party IT infrastructure, data-center REITs are experiencing a market boom. In fact, demand is outpacing supply in the top-tier data center markets and despite enjoying high occupancy, these markets continue to randomly absorb new constructions at a faster pace. T

This, along with improved outlook for economic growth, will significantly propel growth of data-center REITs, such as Digital Realty, Equinix, Inc. (EQIX - Free Report) , CyrusOne Inc. (CONE - Free Report) , CoreSite Realty Corp. (COR - Free Report) and others.

Amid these, accretive acquisitions and development efforts are anticipated to boost top-line growth for Digital Realty. Last year, the company announced the completion of a merger with DuPont Fabros in an all-stock deal for an enterprise value of about $7.8 billion. This move enhanced Digital Realty’s portfolio in the top U.S. data center metro areas across Northern Virginia, Chicago and Silicon Valley. It helped it upgrade hyper-scale product offering and grow the company’s blue-chip customer base. The company is also focused on expanding its footprint in Europe, Australia and Asia.

However, given the solid growth potential of the data-center real estate market, competition may intensify in the upcoming period from existing as well as new players. Amid these, an aggressive pricing pressure is anticipated as well in the data-center market.

Digital Realty currently has a Zacks Rank #3 (Hold). However, shares of the company have slightly underperformed the industry it belongs to, in the past six months. The stock has gained 4.2%, while the industry has rallied 4.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.



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