The Changing Data Center Landscape

By Eric Boonstra, CEO, KEVLINX

The year has started very well. There is a real buzz in the industry this year – we enjoyed a very productive conference at PTC in Hawaii and we are now look forward to reconnecting at Kickstart Europe in Amsterdam. Now seems like a good time to take stock and look at how the European data center business has evolved and where it is going.

Things have changed a lot for us data center veterans. Starting in 2008 I spent 10 years building up the EvoSwitch business with my excellent team into one of the leading facilities in the Netherlands, then in summer 2018 we found Iron Mountain, a buyer that could help us grow internationally. I will always be extremely grateful to Iron Mountain for making that dream happen. But I believe I have what people call an ‘entrepreneurial itch’, and I felt a growing need to build a company from the ground up again, this time with more of a focus on secondary emerging markets, and I’ll try to explain why.?

Over the last few years as the industry consolidated the line between wholesale and retail providers has blurred. The business has speeded up too, to address rising large-scale demand. Year by year hyperscaler demand grew, until it started taking up as much as 80% of colocation supply. Partly due to this cloud growth, we are also seeing a new geographic focus. Operators always concentrated on FLAP – Frankfurt, London, Amsterdam, and Paris. Now, while these markets are still filling up, some are nearly full, and availability is dropping fast across the board; in Frankfurt it has gone all the way down to 1%. Scarcity of land and power and stricter zoning and regulations won’t stop growth in these regions while demand stays strong, but it does create a new dynamic which accelerates opportunities elsewhere.

The new map of Europe will involve exciting developments.? We are seeing a lot of new hubs emerging in some Europe’s biggest and most commercially exciting cities. They have space, power and an appetite for the business, plus they are interconnection hubs with advanced infrastructure and fast-growing digital economies. We’re looking at a much broader and more even spread of data centres in Europe, and that creates major opportunities for versatile fast-moving businesses.

The unique demands of generative AI are another very powerful factor that is refocusing the market and creating opportunity.? On the power side it needs huge quantities - 50 to 100 Megawatt sites and sometimes more. And its need for extremely high-power densities, right up to the 50-100 Kw mark will change the way we design our facilities.? In my view this will give the next generation of new facilities an edge.

Data center designers need to design round the parameters that AI requires. Facility layout needs to be extremely flexible and power supplies in particular should be easy to reallocate, which is why we use centralized UPS's, making it easier to slice the power up to meet changing customer needs. The same goes for cooling. Although we are currently designing based on adiabatic indirect air cooling, we can easily add liquid cooling as it offers better efficiencies at higher densities. Flexibility is the key.

Then there is sustainability. I believe the data center industry is perfectly placed to be a decarbonisation pathfinder. Newer facilities, if they are well designed, have an efficiency edge, and should make the most of this. Recycled materials reduce carbon impact and BREEAM standards introduce sustainability considerations at every stage of the build.? Heat sharing makes you a welcome next door neighbour. Power has to be renewable. Data centers have to contribute to the growth of renewables and minimise the climate impact on behalf of their customers, and share that data for customer reporting. With 32 MW of IT load, our facility in Brussels will be the largest in Belgium, but to be a true flagship facility it also needs to be the most efficient and climate-responsible choice for customers.

Looking forward I would say that in another five years 32 MW will not look so big. The trends are clear; not just own-build but colocation facilities are getting larger.? This shows no sign of flattening off. Nor does the conversion of ‘second-tier’ markets to ‘top tier’. Dublin is already there. Madrid, Milan, Warsaw and Zurich will catch up fast. Berlin, Brussels, Barcelona, Stockholm and Vienna are poised for growth. In my opinion in another few years there could be as many as 20 major metro hubs dotted across Europe, all with very large high-density facilities.? And they will not just be for hyperscalers. The medium-sized cloud providers will continue to grow, as will CDNs, cloud security businesses, AI specialists and private clouds. For operators, flexibility will be the key again here, catering for all types of customer in the same strategically-located densely-connected facilities.

Given this growth I am very pleased that KEVLINX is where it is, with everything to play for in the new European landscape. Our multi-disciplinary team have decades of experience and I have worked with most of them before, so we can play to our strengths. In Macquarie and PMV we have two of the best backers in the business, and they are shareholders as well as investors which gives added strength to their support. Flexibility and speed will be the key to meeting customer needs, while keeping an eye out for locations and other growth opportunities in this fast-growing, constantly changing market. If you want to see what we can do, follow KEVLINX and we will keep you updated.

#Datacenters #Kickstart Europe #Sustainability #KEVLINX

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