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Data centre outsourcing set to grow in Europe

Regulatory changes such as Basel III in banking will put pressure on data centres

Data centre outsourcing in Europe is set to surge, according to BroadGroup Consulting's fourth annual report on data centres in Western Europe.

According to the report, which is due to be presented at DataCentres Europe 2012 in Nice this month, outsourcing currently only makes up 15 percent of the data centre market in Europe, which leaves room for significant growth opportunities.

Third-party data centre space will grow by around 14 percent between 2010 and 2014, with the proportion of European data centre space in third-party facilities increasing to 25 percent by 2014.

Steve Wallage, managing director at BroadGroup Consulting, said that the growth in outsourcing will change the competitive landscape of data centre providers in Europe over the next five years.

"The Western European market remains characterised by many small and specialist third-party facilities - for example, BroadGroup has identified over 400 such data centres in the UK. At the other end of the scale, the largest players are growing in size and increasingly differentiated by their breadth of portfolio and financial strength," he said.

"While the strong recent performance of the outsourced datacentre market has tended to help the vast majority of providers, the market will increasingly be divided into winners and losers."

Wallage said that the increase in demand for data centre space was being driven from growth in cloud computing, bandwidth usage, digital media, e-commerce, social networking, mobile and increased regulation, such Basel III in the banking industry.

"The bottom line with Basel III is that it is putting pressure on the banks to effectively increase the amount of data they store, the length of time they store it for, and increasing the amount of datacentre space they need," he said.

During the first quarter of 2012, approximately 11 million square feet of data centre space was announced. Of this, 10 percent has, or will, become operational during the year.

The report results will be presented at DataCentres Europe 2012 which takes place in Nice, France 23-24 May.


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