According to Infonetics Research, there are a number of drivers of data center investment. [see the nice chart here]

Chief among the reasons is that Enterprises need to improve application performance.

Next is improve security, especially in our highly regulated society. (Ironic that our government both calls for stringent security and privacy controls then circumvents them for their own use.)

The compliance space is getting to be an alphabet soup of confusion. ISO/IEC 27001:2005; SOC 1 and SOC 2 SSAE 16/ISAE 3402; Cloud Security Alliance Cloud Controls Matrix; Federal Risk and Authorization Management Program (FedRAMP); Payment Card Industry (PCI) Data Security Standards (DSS) Level 1; SOX; GLBA; HIPAA and HITECH. It is expensive to implement these guidelines and policies for compliance but it is even more expensive to pay for the audits for this .

Improve scalability, improve management capability and rapid application deployment are more fitting benefits associated with cloud services providers for VPS or PAAS than for data center space. Yet I can see how the IT staff would invest in data center to build out their own PAAS system.

I don't see consolidating data centers as much as I see moving into new ones for disaster recovery or better connectivity or to be close to the office.

Now, my buddy, Dany Bouchedid, CEO at COLOTRAQ, a master agency specializing in data center everything, says, "This [chart] is spot on as it coincides perfectly with what we have been experiencing for years as to why customers come to us." He has alittle more data center experience than I do (and mine is mainly from CLECs and ITSPs.)