Is Europe the Next Frontier for North American Data Center Providers?
by Josh Anderson
NEW YORK CITY, NY — Is Europe the next frontier for North American data center providers? Perhaps. As more and more markets fill with construction, more and more firms are looking across the pond for greener pastures. At CapRE’s New York City Data Center Summit last week, we convened a panel of leading data center insiders from the U.S. as well as Europe to talk about the latest trends they’re seeing in end-user demand.
First, we heard from Drew Leonard, Senior Vice-President at UPSTACK. “One of the major things that I’ve heard, and listening to a lot of the data center providers and their drivers are that Europe is the next frontier for expansion,” he replied. “Moving into a European market provides more economic return than expanding in Tier 2 or Tier 3 markets in the U.S. So it gives them a foothold or opportunity to start opening up the doors.”
Leonard then stressed that these drivers are customer-driven expansion. “So you have a customer base that you serve here in the United States or in other markets that is looking to get to Europe, whether it’s for cloud expansion, whether it’s for management of data traffic, whether it’s for regulatory reasons,” he explained. “And it’s working both ways. People are moving into Europe as well as moving out of Europe. So I think those are the drivers I’m actually seeing now.”
Next, we connected with an insider from a buzzworthy market – Ireland. Garry Connolly, the Chairman at GconnTec, President of Host in Ireland, & Cochair of the General Data Protection Regulation (GDPR) Awareness Company brought us back to basics. “We’ve been talking about data for quite a long time. Sometimes when you come to events like this, you forget to talk about data. You need data before you need a center, right? When you look at your geographic locations, you need to look at Five Ps – which include the pedigree of the location, the policies, the people, and the pairing types.”
But that’s an old story, revealed Connolly. “The big American thing now is the new, fifth, P,” he remarked. “And it’s probably the most important P – it defines the type of data center – proximity. Proximity is the biggest word you can use when talking about the geography of a data center, besides scale and type. Proximity to the skin and the things – you’ve got to be within a municipality, there’s just no getting away from it, with all of the technology that’s coming down the pipe. That’s where the things are going to be.”
Connolly then said that the second proximity is going to be the likes of Dublin, where you’ve got 480 megawatts of data centers, 360 of which are hyperscale, and 120 are colocation and managed services. “It’s the proximity of the data sets,” he stressed. “You can’t get peto-second access to AWS in the direction without getting physical in the same way.”
Finally, Connolly shared the third Proximity. “You don’t have to be in either of those two to go where cheap energy is,” he shared. “You go where cheap energy is. You go to the Nordics, you go to Montreal or somewhere like that. Happy days.”
Stay tuned to a future CapRE Insider Report for more insight on this issue from Svein Hagaseth, Senior Vice President for North America at Green Mountain Data Center, Ltd.