European cloud demand forces data centre uptick – but Brexit remains a worry


Demand for European data centre space continues to rise due to greater need for cloud services – but the Brexit vote could yet send UK plans off-kilter, according to the latest note from consulting firm BroadGroup.

The analysis, which appears in the firm’s latest Colocation Market Quarterly (CMQ), argues there is ‘strong’ demand for real estate in primary European locations, arguing Paris has performed ‘particularly strongly.’ The company argues a mix of hyperscale vendors needing to beef up their European presence, as well as smaller cloud firms seeking colocation space has primarily contributed to the trend.

Yet despite this, the consultants give a pessimistic note to the impact of a Brexit vote, both in the ‘initial certainty’ following the EU referendum result, and in the long-term implications. BroadGroup certainly aren’t the first company to offer such a caution –  in July analyst firm IDC praised the EMEA cloud infrastructure landscape with one hand and warned of a post-Brexit downturn in the other – yet Steve Wallage, managing director of BroadGroup consulting, notes broader concerns from data protection regulation (GDPR), to availability, and cost of power.

“UK data centres could be perceived by some investors as only relevant for local demand, a change from London long being considered a hub for European HQ and data centres, initial entry into Europe, and regional consolidation,” said Wallage. “For example, some of the hyperscale cloud players are now positioning UK data centres in this way.”

According to BroadGroup, the company knows of three potential UK data centre investments from Asian companies which are now “unlikely” in the wake of Brexit. Amazon Web Services took an opportunity at its London summit in July to confirm its UK data centre plans were still on track.

The note that Paris has become a particular hotspot is exemplified by Equinix buying Digital Realty’s operations in the French capital earlier this month for a reported $211 million (£158m). Earlier this week, Apple’s proposal to build an €850m data centre on the west coast of Ireland was provisionally given the green light.