Enter the Cloud: The Times, They are a Changin’

July 27, 2012 

The cloud, another way to refer to the new digital storage age, has finally arrived – and it will change commercial real estate in San Diego, and our lives, forever. 

 

Sure, it’s been hyped for the past couple of years. The late Steve Jobs was one of the first to push us into the electronic abyss, launching iCloud for his new iPads before he died last year. New Web-based file storage programs such as Dropbox have been explored, and Google turned on Google Drive two weeks ago, offering 5GB free in-the-cloud storage to anyone, and more for a fee. 

But this is only the beginning. Baby-Boomers – this isn’t the black-and-white, three-channel era any longer. 

Jobs, the consummate Baby-Boomer, led the cloud push, building a $1 billion, 500,000-square-foot massive server farm in Maiden, NC in 2010. Data centers such as these, with server space for every person and company on the planet, are growing exponentially, from Chicago to New York City, from Toronto to Beijing. (My prediction? Amazon warehouses and data centers are today’s steady CRE bet.) 

Imagine all the data you own or create – pictures, videos on DVD or VHS or Betamax or whatever, work files, etc. – stored on the Internet, available using any device you choose, be it a laptop, tablet or even cell phone. It’s all WiFi-accessible, or even not necessary, using today’s 4G speeds. 

The hitch now is that storage is still pricey past five gigabytes (about three movies), going for about $50 per month for 1 terabyte (1,000 gigabytes). Too cheap, or worried about security? Forget Web storage –this past weekend I connected a two-terabyte hard drive to my WiFi system at home for about $160. Not only can I call up any file or movie I own to any laptop, phone, tablet or TV in the house, the drive has software to allow me to access those files on that drive from anywhere in the world where I can get an Internet connection — which IS pretty much anywhere in the world these days. 

How will this impact San Diego commercial real estate leasing today? It probably won’t. The industry is still, at its heart, about getting out, meeting people in person, walking a property, firmly shaking a hand. 

But technology will soon change the playing field. 

Office workspace will continue to shrink, just like experts at firms such as Jones Lang LaSalle have predicted, as more employees forego a desk for a portable tablet. Sharing files electronically and teleconferencing, a fad only about six years ago, will take over as being the desired office environment – making the office moot for most employees. 

In San Diego commercial real estate leasing, store space, as in the ironic twist exhibited by electronics-giant Best Buy, will continue to shrink as people shop online. Stores selling or renting DVD-style movies or games, i.e. Game Stop or Family Video, will cease to exist, gone the way of music stores. Barnes & Noble will follow, along with more newspapers and magazines that don’t jump firmly on the digital bandwagon. 

How quick is technology moving? So quick that the Kindle, the ebook industry leader that came out just four and a half years ago, is already obsolete. Remember the iPod? “One Thousand Songs in Your Pocket” was the catch phrase that made Jobs a billionaire. Today? Think every song, every movie, every book – at your fingertips at a click. 

Boom. 

Source: GlobeSt.com – Robert Carr

 

DISCLAIMER: This blog has been curated from an alternate source and is designed for informational purposes to highlight the commercial real estate market. It solely represents the opinion of the specific blogger and does not necessarily represent the opinion of Pacific Coast Commercial.