Online gambling and Colocation
We expect that growth will be steady rather than a big leap forwards because such factors will result in the substitution of players from offshore to legalized markets, from land-based to online options, and from fixed to mobile devices. Demand will also be tempered as operators use technologies such as virtualization and flashbased storage to reduce their space and power requirements, even as the number of players and the amount of data collected from them grow. More so than in many industries, regulatory requirements influence where online gambling operators can locate their equipment, and they are also constrained by data protection laws. While online gambling operators will move into new colocation markets as certain jurisdictions open up, we also expect they will move equipment and functionality between jurisdictions to reduce complexity and cost. The operators are likely to move front-end functionality to cheaper data center locations, including eventually the cloud, and make the best use of the equipment they are legally required to site in certain markets. Most markets that have regulated or are looking to legalize the online gambling sector already have mature colocation industries where operators routinely build capacity as demand dictates. We do not believe, therefore, that online gambling operators will be in danger of running into constraint issues in order to service a particular market, nor that operators will have to scramble to meet a sudden surge in demand.