Data centres have fast become a vital asset to many businesses; since 2007, there has been a colossal 200% rise in the European market for data centre services. Representing around 80% of the total UK data centre capacity, London is the data centre capital of Europe and the third-largest data centre industry in the world, and despite Brexit, judging by recent trends, this dominance looks unlikely to change.
Why is London so Successful?
London is the largest colocation data centre market in Europe and in 2016, the city’s data centre supply represents 44% of the total data centre supply across the European market.
It is easy to attribute London’s data centre success to the city’s ‘interconnected ecosystem’. Despite the high cost of real estate within the M25, the capital’s history as a centre for trade, finance and commerce has driven and complemented its world-class data centre market. However, its data centre industry has grown far beyond finance to become a powerful asset in its own right.
Continued Success
In line with its seemingly unstoppable growth, London’s data centre market is set to continue expanding. Despite some initial speculation, the decision to leave the European Union should not upset London’s data centre dominance. Though data protection may become a bigger area of concern, it is not expected that Brexit will cause any major issues for the UK industry, which will remain a vital marketplace for data centre occupiers. With ever-increasing usage of apps powered by cloud service providers driving demand, more firms are expected to outsource to cloud service providers.
Within reason, it can be speculated that Brexit’s effect on London’s digital ecosystem will be minimal. Furthermore, any negative implications will be resolvable and rectifiable. Corporate companies are developing cloud strategies and coming to rely on cloud services more and more. This strong, quality supply pipeline is set to ensure that new requirements can be satisfied by London’s market.
Forecast/Predictions for 2017
Given the success of previous quarters, the UK’s solid supply pipeline will nourish the data centre market, maintaining an equilibrium that is sure to support London’s increasing success. It can be predicted that the market will grow by a further 8% during 2017, potentially due to a resurgence in demand for data centre space from more traditional corporate sectors.
Two stand-out trends are expected to leverage London’s continued success in 2017:
1. The continued progress of major cloud service providers: The sector has never relied so much on such a small number of companies providing a large amount of the take-up of IT power. If these companies continue to progress in the UK, the London market will continue to thrive.
2. Data protection regulation: Following Brexit, replicating the EU framework will be integral when ensuring the free flow of data across borders. If hosting in the UK is not compliant with EU rules and regulations, we risks losing data centre occupiers to providers further afield.
As corporates continue to integrate cloud solutions into their overall IT architecture, the demand for cloud solutions will increase steadily for the foreseeable future. With data centre sector growth being driven so definitely, in spite of Brexit, we are sure to see London maintaining its dominance as a European data centre destination.
Future-tech: building or expanding your data centre
If your organisation is aiming to develop its own data centre infrastructure in Europe then Future-tech is the company to assist you.
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