Data Center Locations: Europe
United Kingdom
The UK, and especially London, has learnt how to be a reliable player in the data center market, according to Mark Larard, Director of Jones Lang LaSalle’s data center advisory group
data centers in Europe. As the market has evolved, more data centers have been built in the UK than elsewhere in Europe, and as a result, the skill-set and knowledge is second to none. This combined with a commercial and fl exible approach means there are more data center development companies registered in London than the rest of Europe put together.
The UK - where fi nance came fi rst
To many in the US, Europe is just one amorphous market, ignoring the language, fi nancial, political and cultural diff erences that exist between the diff erent nation states. But the nuances between the various countries can have tremendous consequences for new data centers.
The market for data centers in the UK grew from the success (and concerns) of the fi nancial services sector. The City of London’s fi nancial services sector is currently ranked fi rst and equal to New York City, and accounts for 4% of UK GDP alone. Together with the other fi nancial districts of Canary Wharf, Mayfair and indeed Greater London, the region accounts for more than 25% of the country’s GDP.
When fi nancial regulatory organizations began to look more seriously at how they should regulate the storage of data, the UK Financial Services Authority (FSA) took the lead at a similar time that the US legislature enacted the Sarbanes-Oxley Act. With the predominance of the fi nancial services industry, combined with the initial routes for the early transatlantic fi ber network and a positive approach to zoning and relatively competitive taxation, Europe’s earliest purpose-built data centers were located in London.
In 2011, the UK remains the largest data center hub in Europe, accounting for close to 45% of the market.
Why favour the UK? »
Connectivity remains a key determining factor. The UK was an early investor in
fi ber technology, and combined with its position to the west of Continental Europe this led to an initial advantage. Latency is now far more prevalent across Western Europe but the sheer amount and number of suppliers available in the market means that the UK, in particular London and the south of England, maintain a clear advantage.
» Power is the life-blood of data centers. Much of Europe has underinvested in its infrastructure, and the UK is no exception. Some areas of the UK power network are beginning to creak but new investments are being made, and while the provision of power upgrades can be viewed as expensive (but comparable with other competing countries), once a contract is put in place certainty is assured. Lead-in times for delivery of new power can be up to two years in some locations but this can be seen as advantageous from a development perspective.
» Land use and zoning (planning) fl exibility remain key assets to the UK data center market. The local authorities maintain a considerable level of autonomy in terms of controlling and permitt ing changes in zoning use and as such have maintained a competitive approach to granting their consent.
» The UK has the largest track record with regard to the design, construction and critical infrastructure management of
The current questions When considering the UK as a new data center destination, a few questions must be considered. First and foremost, do you need to have synchronized replifi cation with the City of London? This may appear an innocuous question but more than 80% of data center transactions currently occur within the area approximately 60km around London – an area that also comes with higher real estate price. The availably of choice is also considerably curtailed. If synchronicity is a prerequisite, then there are opportunities with both third- party (colocation) providers and development sites but the choice is unlikely to be huge, and timescales may be long.
The colocation market has a wide variety of participants (many of which have US parent companies and operations across continental Europe) capable of providing enterprise data centers, data halls, data retail facilities, racks, managed services and a variety of diff erent wrap-around services. Freehold sites, Leasehold, contracts for services, fl exibility, growth, all can be taken account of, and competition is often sharp. If synchronicity is not required then there are a number of alternative solutions across the country, and fi nancial savings can be made. Outside south-east England land is usually considerably cheaper, and the power grid less strained. Lead-in times should be easier, and some regional governments have speculatively built facilities, or made infrastructure available, to try and prime the local economy.
Surely other European Countries can off er cheaper, more environmentally sustainable, quicker, data center solutions? The answer is probably ‘some can’ but the track-record for delivery and eff ectiveness in operations are often less tried and tested.
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