Digital Realty

Digital Realty’s competitive advantage rests on multiple pillars. Switching costs are high: colocated workloads and cross connects create data gravity that makes migration risky and time‑consuming.

Efficient scale is strong in key metros like Northern Virginia, Chicago, Frankfurt, Dublin, and others where land, permits, and power are scarce and long lead‑time grid upgrades deter new entrants. Global scale and procurement lower unit costs for design, power, and equipment.

Interconnection‑driven network effects exist, but are moderate versus the category leader, making this pillar supportive rather than dominant. Intangibles include trusted brand, neutrality, and platform software (ServiceFabric, PDx) that standardize deployments across regions.

We also consider potential moat erosion: hyperscaler insourcing on owned campuses, next‑gen liquid cooling designs that could favor purpose‑built operators, and regulatory or community resistance to large power draws. Weighting switching costs and efficient scale most heavily, the composite moat quality is high and durable.