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Comments Off on London to Dominate Data Centre Market in 2017 Thanks to Brexit and GDPR

London to Dominate Data Centre Market in 2017 Thanks to Brexit and GDPR

Posted by Admin | December 16, 2016 | Telecoms

Mitul Patel, associate director, datacentre systems at CBRE discusses UK’s data centre landscape for 2017

The UK’s data centre market (which really means London) will continue to grow in line with recent trends. Brexit is not a major issue but data protection issues will be of concern. The continued growth of cloud services will drive demand, with more firms willing to outsource to cloud service providers.

There is a strong UK supply pipeline – which will help to maintain market equilibrium given recent quarters of high take-up.

Representing around 80 per cent of the total UK data centre capacity, London is the key data centre market in the UK. This dominance looks unlikely to change. London has 384MW of total data centre supply (at Q3 2016), which represents 44 per cent of the total across the major European markets, which also includes Frankfurt, Amsterdam and Paris.

London is the largest colocation data centre market in Europe by total supply, and always has been (colocation data centres are those where occupiers can lease IT rack space and associated power). During 2017, the market will grow by a further eight percent to 10 per cent, in line with recent trends.
Data protection issues and cloud service providers will shape 2017

Two major trends will influence London’s continued success in 2017 and beyond.

– The continued growth of the major cloud service providers. The sector has never been so reliant on such a small number of companies providing so much of the take-up of IT power. If these companies continue to be active in the UK, then the London market will continue to be successful.

– Data protection regulation. After Brexit, matching the EU framework will be important to ensure the free flow of data across borders. The UK risks losing data centre occupiers if hosting in the UK means being non-compliant with EU regulations.

– However, the UK data centre industry will probably not be negatively affected directly by Brexit; we expect the industry to adapt to any concerns given the UK’s global position as a major marketplace.

Supply pipeline is strong so demand for capacity can be met

There is a strong and good quality supply pipeline which will ensure that new requirements can be satisfied in London. The UK is still a key marketplace for data centre occupiers because of rapidly increasing usage of applications powered by cloud service providers. Further ahead, there will be a resurgence in demand for data centre space from more traditional corporate sectors. This will strengthen London’s digital ecosystem, maintaining its dominance as a European data centre destination.

Given the dominance of the cloud service providers in the European data centre market, there’s a risk of oversupply if demand from that source reduces.

Corporates are increasingly willing to rely on cloud services

Many large corporates are developing cloud strategies, and providers are increasingly developing solutions to the issues of governance, customer service and data protection which have prevented many potential adopters, to assist them in doing so.

We expect cloud demand to grow strongly for the foreseeable future as more corporates integrate cloud solutions into their overall IT architecture. This will in turn drive growth in the data centre sector.

Source: v3

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