European Colo Market is Catching up to U.S., according to Green Mountain’s Svein Hagaseth
CAPRE: Thanks for chatting with us today, Svein. We always relish the opportunity to hear from you. How was 2019 for Green Mountain and what is your team most looking forward to as we head into 2020?
Hagaseth: 2018 and 2019 have been exceptional years of growth for Green Mountain, and we are now the fastest-growing colocation provider in Northern Europe. We have grown more than 100 % year over year the last couple of years, and have signed on average approximately 10 MW of new capacity each year. There seem to be a very high focus on the Nordics, and especially Norway these days.
There are a few reasons for that, largely because of the changing requirements in the industry and by companies globally regarding sustainability. I’ve been talking about this topic for the last 3-4 years, and when I started in Green Mountain the trend was more I will take it if you can get it and nice to have. But now it seems to be the primary driver for all the clients we are speaking to – both large Cloud providers and smaller enterprise-type clients. Sustainability is really a big driver for this industry, and now it is not a question about if – it is a question about the time to act is now.
CAPRE: What demand drivers are top of mind as we flip the calendar to 2020?
The client requirements are changing, the peoples perspective and purpose are changing. We see this in all aspects. Last year when we signed Volkswagen Group as a client, we were told that if we could not deliver at least a carbon-neutral data center, we weren’t going to get through the RFP phase. But now we also see it when hiring people, Green Mountain gets tons of really good applicants for every position we announce and one of the things we hear is just that people would like to work for a company that are at the forefront of sustainability.
In regards to what we look forward to for 2020 – we look forward to opening our third data center, this time in Oslo – the capital of Norway. We opened DC3 Oslo, which has the opportunity to become a 75 MW+ site over time.
CAPRE: We’re looking forward to hearing from you at our upcoming 2020 events. What are you most looking forward to about CAPRE’s 2020 Digital Infrastructure Forecast on January 30 in Dulles, VA?
Hagaseth: It’s always great to get perspective about the industry in general. There are so many things going on in so many different directions that the ability to get the latest and the greatest, especially in the Washington, DC area, is always very important. It always is important to learn from others, and especially at the epicenter of the data center industry. The networking part is going to be key – and for me personally and for Green Mountain, it will always be to look for potential future clients. It’s a good place to be and a good event to participate in to meet prospective brokers, clients, partners, analysts, and more.
CAPRE: How is the North American data center industry different from the European arena at this particular moment?
Hagaseth: The maturity of the market for sure. The U.S. is still a couple of years ahead of the curve than where Europe is. But Europe is catching up and fast. There’s still a tendency for Europe to look to the U.S. to see what’s happening there, but there have been some major drivers coming from Europe as well. In the U.S. there has been a lot of talks lately about where the industry is going in regards to 5G and Edge data centers. We still talk about that in Europe as well, but in Europe, there’s more discussions about where the industry is going in regards to sustainability, energy efficiency, heat recovery and carbon neutrality.
One of the major shifts on that arena is the change of focus from PPAs and RECs and buying yourself green, into what can you actually do to simply be green. This is one of the reasons as to why companies are looking to Norway, as we now produce more than 10 % of Europe’s sustainable power and are the only country in Europe that has 100 % production of green power. The drive to green is also pushing clients to think differently, and we have seen this in a few cases where the client are getting more mature in regards to which workloads need to be where.
CAPRE: Tell us more about that. What kind of compute challenges are top of mind?
Hagaseth: Well, interestingly, that’s becoming more and more of an important question, and it’s happening everywhere. People need and want to find out where they can have a competitive edge in terms of placing workloads and data – and they will find those. I think that the key is to figure out your data models. You don’t need to do everything in one place – you need to find the models that fit in the cloud, the model that fits in hybrid, the model where data needs to be on-premise or at the Edge, and not least what could I put in the most cost-efficient and sustainable location, and go with that.
CAPRE: Tell us about why these models are becoming more efficient.
Hagaseth: Well, improved latency is changing things, for example. For the majority of workloads, you don’t have to be in Ashburn, New York City or San Francisco or you don’t have to be in downtown London, Frankfurt or Paris in Europe. Sometimes you can push out that data, such as AI and HPC data, which can live with +100ms latency. Our clients started there, but where they now learn that the Nordics is only 14-15 milliseconds RTT away from for instance Frankfurt, they start to reconsider also other workloads in this cost favorable and green locations. People are becoming more comfortable pushing out their data because the cost and availability perspective is getting better, thanks to that changing latency.
CAPRE: What trends do you think will be most important to the data center industry in 2020?
Hagaseth: Infrastructure diversification or data maturity – not just from the Cloud providers but also on the enterprise side of clients. They’re going to grow in maturity in terms of how they handle data. You’re going to see these different models where you’ll put whatever you need to be in the Edge at the Edge, and then you’ll put some workloads in urban areas, and you’ll be able to put the workloads that fit anywhere, anywhere. It’s not going to be a one-size-fits-all solution for data. I also think this diversification will come from the lack of available lands and available power in both Europe and the U.S. Those shortages will force the cloud providers to think differently about where they store data. Again though, to be clear, I do think that the main driver next year is going to be sustainability.
CAPRE: Are there any new entrants to the market that are jumping on those sustainability drivers at the right time?
Hagaseth: I am sure there are, and we learn from what they are doing. I think the drivers are there, and we see that in different forms around the globe. In the Nordics especially, there are a lot of cool things happening in the heat recovery world – using different models for this technology. We’re doing that in a new data center outside of Oslo, for example. Heat Recovery is also an item that helps the business case as little as you also get paid for the heat.
There are so many different cool things happening with regards to energy efficiency, infrastructure diversity, and also regulations and incentives to encourage the industry to go green. We have been #settingthegreenstandard since we started 10 years ago, but we still need to stay at our toes to continue to innovate and learn from all the other interesting projects happening around the world.
Svein Atle Hagaseth is the Senior Vice President for North America at Green Mountain Data Center, Ltd. With two data centers in Norway and plans to develop in other regions, Green Mountain Data Centers design, build, and operate high-security, robust wholesale colocation data centers that operate on 100% low-cost, renewable power and use free cooling, creating unique power efficiency. Both of Green Mountain’s data centers, DC1-Stavanger and DC2-Telemark, have achieved Uptime Institute Tier III certification as the only Nordic colocation provider. Green Mountain Data Centers is one of the largest operators in the sector in Norway with clients in Finance, IT, Government, Health, O&G and others.