Data centre market continues to boom

These days data centres seem to be popping up like mushrooms. Announcements are coming thick and fast, with no sign of slowing down. Service providers are busy building ever-more fibre and 4G/5G connectivity to connect these new data centre investments into the international backbone, as data traffic continues to rise. New builds and expansions are not just taking place in new growth regions but in more mature markets such as the UK, Germany and The Netherlands – fuelled by the move to Cloud, increased collaboration in key sectors, the rise and rise of Big Data, plus the exponential growth in streaming media. For example, recently:

  • Equinix has announced it has invested EUR31 million in a data centre in Poland.
  • SAP is opening a data centre in Singapore.
  • Amazon is spending USD800 million on a new data centre in Argentina.
  • Google is spending USD850 million in Taiwan and building a second LATAM data centre in Uruguay. Google’s investment in Uruguay comes on the back of the Tannat cable, a 2,000 km JV between Google and Antel Uruguay (2017) and the Currie cable, a 10,000km installation that links Chile to the west coast of the US (2019). In early 2019, its CEO also announced it was spending USD13 billion bolstering its data centres in the US, with major expansions in 14 states.
  • Turkcell is also building both network and data centres, announcing its first solar-powered data centre in Ankara this month.
  • The Africa Media Fund is set to spend USD99 million building a range of infrastructure to support the Media industry, including data centres.
  • Maincubes is opening new carbon neutral data centres in Frankfurt and Amsterdam.
  • Global Switch is opening a EUR115 million data centre in Frankfurt, Germany in partnership with China Telecom Global and Daily-Tech. It will be the company’s second facility in Frankfurt. The three partners recently opened a new USD205 million data centre in Singapore.
  • Echelon is spending EUR1 billion on Irish data centres, winning planning permission in West Dublin and County Wicklow.

Echelon also recently spent £150 million on a Docklands data centre with the aim of bringing it online in 2020. It has built in an area that already contains 20 data centres, although these are at capacity due to buoyant demand. As a European hub, London is fibre dense – particularly around Canary Wharf and the City of London – but finding space for new data centres can be challenging.
The negative press around Brexit might suggest that the UK market would flatten, but this has not materialised. Not only have UK businesses continued to migrate to the cloud, but government itself is following suit – through G-Cloud and by migrating into Crown Hosting colocation.
Tech UK has recently announced, however, that it expects UK data centre operators to play their part in the UK meeting its net zero carbon targets. It says this must be achieved without compromising “resilience, affordability and sustainability”. Noting that the data centre sector is a significant consumer of power – accounting for up to 3% of total energy consumption in the UK – Tech UK notes that data centres could “make a significant contribution to investment in additional renewable generating capacity, and with the deployment of emerging fuel cell and battery storage technologies, could be important energy prosumers in a smarter grid.”
Omnisperience View
We do not expect Brexit to make a significant dent in demand for data centre capacity in the UK. UK businesses will continue to migrate to the Cloud, as will businesses in other regions. Although data centre providers are challenged to make their operations as sustainable as possible, space will continue to be one of the most challenging aspects of data centre development in key locations such as London and The Netherlands, with power being a challenge in many high growth markets. The move by Turkcell to diversify its energy supply into solar energy is an indication of the synergy between green energy generation and data centre supply.

  1. […] should be noted that Tech UK has already stated that it expects UK data centre operators to play their part in the UK meeting its net zero carbon […]