25 February 2021
Henry Longhurst By Henry Longhurst

3 Trends Determining the Future of European Data Centres.

The data centre industry is booming.

Infrastructure is projected to reach $200 billion worldwide by the end of the year and there’s a newfound optimism throughout the sector. Even with the challenges of 2020, Europe’s data centre market has managed to prosper.

In the first half of last year, the European market saw investments worth €26 billion – which is four times the annual average. In the next 18 months, over 1032MW of new data centre space is expected to come online across Europe alone – which is close to a quarter of the data centre space that’s ever been built. Beyond this, a further 2801MW of phased capacity is planned for development in the next three to five years.

The European market is growing rapidly and there’s no sign of investment slowing down now.

The Rise of Hyperscale DCs

Major tech giants like Apple, Facebook and Google are continuing to double-down on hyperscale DCs – which they own and operate themselves – for their robust, scalable applications and storage portfolio of services.

This type of data centre has been born out of necessity, supporting the massively scalable architectures of the global web, social media, streaming media, AI/Machine Learning, cloud gaming, and of course, hyperscale cloud providers.

Investments in hyperscale DCs first gathered pace in 2017, with Apple, Facebook and Google all building 70MW data centres in Denmark. But four years on, this trend still continues to shape today’s data centre industry. This is reflected by the many recent investments in submarine cable schemes, which have helped tech giants lower costs at their hyperscale facilities by increasing the capacity of their cables.

Facebook, Google, Microsoft and Amazon Web Services (AWS) have already invested $20 billion in new cables all over the world. And in the next two years, it’s estimated that hyperscalers will contribute a further $8 billion to upcoming systems.

This capacity to shuttle data across the ocean is becoming increasingly important to hypercalers, with more data centres popping up all over Europe.

A Diversifying Geography

While Frankfurt, London, Amsterdam and Dublin remain the traditional hubs for European data centres; we’ve started to see date centres enter new areas. This trend has been motivated by reduced data transit costs and the potential to mitigate the impact of changes in data sovereignty laws.

In 2019, AWS secured planning consent for the biggest data centre development that Spain and the Iberian Peninsula has ever seen. In Belgium, Google’s St. Ghislain campus has increased its IT power to now represent over 75% of all data centre space built in the country.

There are plenty more similar examples of the industry emerging in new locations, but the upshot is that there’s now more development underway outside of the traditional core markets than within. In Zurich, Vantage Data Centers are currently on schedule to deliver their first European hyperscale DC in 2021, a 40MW campus, to go alongside its recently opened 15MW facility in Frankfurt.

As long as there’s availability of land, a large production of cheap green energy and strong connectivity; then a location will be favourable to developers. Demand is important too, so these areas also require high populations with limited data centre investment to date. Second-tier markets such as Madrid, Copenhagen and Warsaw are therefore all seen as the next big opportunity.

Taking these specifications into consideration, many report that third-tier locations like Istanbul, Prague, Rome and Berlin also have high potential for future hyperscale and cloud-scale data centre investment.

Sustainability is Still Crucial

As the space continues to develop and grow, it will become increasingly important for data centres to be built and developed with sustainability at front-of-mind. This is something the industry has continued to get better at over the last decade – especially in Europe.

Although large data centre infrastructures seem the prime suspects for huge levels of energy consumption and CO2 emissions, the industry has worked hard to reduce its environmental impact. Today the energy consumption per gigabit in European data centres is 12 times lower than in 2010 (despite being reliable for 15 times more output) and many sites have leant on renewable energy sources to lower their carbon emissions.

In November 2020, Google opened the doors to its CO2-neutral data centre in Denmark. The €600 million infrastructure is one of the company’s most advanced data centres yet.

Google is constantly investing in new sources of renewable energy to stay on top of its 100% green energy commitment. Recently, the tech internet giant purchased additional renewable energy from three new Finland wind farms that produce a total of 190 MW.

Google’s dedication to renewable energy is impressive, however, the outside-the-box-thinking of Microsoft and Project Natick has to be admired too.

Microsoft's Project Natick

Two years ago, Microsoft sank a data centre off the Orkney coast in a wild experiment. After being retrieved from the ocean floor last year, the American multinational has found the underwater station to have worked reliably, practically and sustainably.

For example, the Project Natick team selected the Orkney Islands partly because its grid is supplied 100% by wind and solar, plus experimental green energy technologies under development at the European Marine Energy Centre. While most land-based data centres would find this an unreliable grid, the underwater data centre did not – which opens-up a lot of questions.

Project Natick has got people thinking. Possibilities of co-locating an underwater data centre with an offshore windfarm may not be as far forward in the future as once thought. And with the commitment to go carbon neutral by 2030 (as part of the European Green Deal), we’ll need the support of many more innovations like this.

Nevertheless, the future looks bright for the data centre industry. It’s becoming greener, benefitting from a more geographically diversified market and seeing huge investments in its hyperscale DCs.

If you recognise these trends in the market or have anything that you’d like to share with me about you, your company or the European data centre market; please email me at Henry.Longhurst@industrial-cm.com.

Please find more of my content on my consultant page.

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Henry Longhurst

Henry builds specialist teams across the Hi-Tech & Mission Critical Construction and Engineering markets globally. His pioneering and dedicated approach to recruitment has led him to become one of the most reputable consultants in the global data centre and life science EPCM markets. Henry has a strong track record of successfully building technical and commercials teams, routinely delivering collaborative solutions for both his clients and candidates alike.

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