It’s been a turbulent year to say the least and data centre organisations must adapt to the technology demands thrust upon them by the pandemic, or risk being left behind. Will King, Managing Director, DC Byte, reflects on the past 12 months and predicts what the future has in store for the industry.
The data centre industry is not alone in its determination to adjust, adapt and thrive following the challenges posed by the pandemic, the energy crisis and the digital skills gap.
The latest DC Byte research revealed that not only is the data centre market showing signs of continued core expansion, but there is also strong growth in new markets outside of Frankfurt, London, Amsterdam, Paris and Dublin.
The pandemic has heightened demand across the data centre industry, accelerating buying cycles that were already on an upward trajectory, and increased awareness among the investor community of the profitability of technical real estate versus more traditional assets.
Reflecting on 2021
Dublin has been able to secure the most significant new aggregate supply this year, at 254MW (followed by London with 163MW and Copenhagen with 72MW). This new supply has come from a mix between colocation and self-build providers (London’s was dominated by colocation and Copenhagen’s by self-build). Interestingly, 2021 also marked the first time that colocation surpassed self-build development in Dublin in a single year, with 146MW vs. 108MW of new announced supply. This can be partly explained by the fact that although Dublin has traditionally been a self-build dominated market with the three leading public cloud operators operating most capacity, hyperscalers have increasingly turned to large wholesale leases or build to suit agreements as power becomes more constrained.
London has seen all major public cloud providers secure sites for self-build development in 2021. As the most significant data centre hub in Europe, it has historically seen most of the development via colocation operators. However, the increasing number of new hyperscale self-build facilities looks set to change London’s market composition in the coming years.
Frankfurt has a substantial amount of phased power but it has been widely reported this year that power constraints in Frankfurt have led to some of the operators having longer lead times on the power they have secured, with some unlikely to receive full power for another seven years. As a result, we are starting to see development expand outside the traditional submarkets, with one hyperscaler having already acquired three sites in Hanau, Erlensee and Dietzenbach in 2020.
Belgium looks set to overtake Finland as the third largest hyperscale self-build market in Europe with 186MW, compared to 184MW in Finland.
In Spain, AWS is on course to go live with the first hyperscale campuses in Spain in 2021. It initially announced a public cloud region in Spain in 2019 and started construction in 2020, choosing to develop in the autonomous community of Aragon, unlike other cloud providers which have continued to focus on Madrid.
Looking ahead to 2022
Competition to source and acquire land for data centre development will continue to be fierce next year, as efforts to deliver on existing commitments and to meet demand for increased supply continue.
The challenge will not only be identifying new sites at a time when both land prices are rising due to the scarcity of supply and most importantly the significant lack of power availability in established metros.
Strategic site selection away from established locations to areas which offer the ability to draw down on power availability over a longer period is expected, as is the continued rise in ‘power banking’ as operators strive to guarantee access to power in the timeframes and locations needed.
DC Byte’s research suggests that:
- Across the FLAPD region, we expect to see increased self-build activity from the hyperscalers, with further announcements and plans either underway or ready to progress by the end of 2022.
- Dublin will overtake Amsterdam as the second largest market in terms of live capacity. Both markets are facing power constraints, however, higher demand from public cloud providers in Dublin has encouraged colocation providers to increase their development pipeline.
- Stockholm will be the market with the third largest capacity scheduled to go live in 2022, after Dublin and London.
- More major players will have a presence across the Nordic region than in Dublin in 2022. DC Byte’s research indicates that the Nordics will support 470MW for the major hyperscalers. By comparison, Dublin will support 543MW of IT capacity for the major hyperscalers.
Investors, developers and business leaders seeking to identify and make time-pressured business decisions about the market, location, efficiency and profitability of their data centre investments will need access to real-time data but will also need to address the pressing issue of recruitment.
The skills and experience gap could well jeopardise the potential future of the data centre market if a sufficiently large and skilled workforce of network and mechanical & electrical engineers is not recruited to service and support the sector.Click below to share this article