State of the Dutch Data Centers. The new foundation

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1 2016 State of the Dutch Data Centers The new foundation

2 RECOMMENDATIONS >>>>>>>THE NEW FOUNDATION >>>>>>>>>>>>>> Dutch Datacenter Association

3 RECOMMENDATIONS 1 Migrate to a data center Our economy and society are changing fast. This digital disruption is all coming from data centers around the world. If organizations do not want to fall behind they need to move their IT to a data center. Organizations who migrate their IT to a data center will be far more able to follow the market trends, thus being more flexible, scalable and cost-effective. Data centers are the new foundation. And it s all about the base. 2 The future is in an efficient data center In-house server rooms are far less efficient than data centers are. This is why organizations, and especially those who want to lead by example in green actions, should closedown their in-house server rooms and migrate their IT to a data center. This will benefit the environment. The time is now. 3 Don t punish the ones who do well The data center sector has made serious achievements in being as efficient as possible. The figures of the MJA, the Dutch covenant of the government and the IT sector, speak for themselves. We do this because being more efficient helps our business case but also because it s the right thing to do. The data center sector is and has been a forerunner in energy efficiency. Because of this, every next step to improve efficiency is getting more and more difficult. Most efficiency rules and regulations follow fixed percentages. Easy for sectors that are lagging behind, difficult and more and more unrealistic for industries that are already ahead in this. We are in serious need of a sector-based approach rather than a general approach. Don t punish the ones who are doing well. 4 Towards a closed-system economy The only byproduct of a data center is heat. Most data centers store this heat in the ground below via thermal storage (WKO) installations. This energy is a by-product that most data centers would like to pass on to anyone who needs it in order to achieve a truly closed cycle economy. The much needed thermal network infrastructures for this are currently not in place. With the rise of smart cities this need to become an action point for governments to invest in. Let s not waste this free energy. 5 The need for future-proof energy supply As more and more IT gets centralized in data centers, energy use is obviously growing in these specific areas. This is an issue everywhere in the Netherlands but especially in the metro region of Amsterdam, being the key data center market and the Digital Gateway to Europe. The three main data center campuses, Science Park, South-East and Schiphol need to continue their growth. Although this is not an issue that requires immediate attention, it will become a threat if decisions are not made soon. Power infrastructure planning is a slow process, so... urgency is needed as we should never have to say no to our customers. 6 Skilled people wanted Our economy has become a digital economy. Our society has become a digital society. All of this is made possible by digital infrastructure, hardware and software. And most importantly people. People with the right technical skills. And this is not only about higher educated people. In data centers we also need people to maintain and operate the power equipment, cabling, cooling equipment and maintain security. And we are not even talking about the indirect needs. Sectors supplying the data center industry, the data center customers and -since every company has become a digital company- all companies in the Netherlands. Our current education system is not providing the people that our digital economy is in need of. Although the system is not worse than most other key digital countries, it is not good enough. There is a mismatch in the type and level of skills and the amount of people that get a degree every year. According to very recent figures, we have more than 40,000 job openings at this moment alone in IT, without the indirect jobs taken into account. To fix this we should not point fingers but work together. The rapid growth of this sector and lack of sector representation has made it very difficult to keep up. But now the DINL association is being formed, we need to work together to fix the shortage of technical personnel. It is of utmost importance to invest heavily in education together and create a way of managing this. We need more engineers now! Note: In the meantime, it is of the utmost necessity to keep up place the incentives for foreign workers. We can t do without them at this moment if we want to keep growing Dutch Datacenter Association 3

4 7 No data on data centers This sector has grown to its current significance mostly under the radar. But there is something very strange going on: data centers, and more broadly the complete digital sector, are not being measured by the Dutch Central Bureau of Statistics (CBS). This because the tracking SBI sector codes, based on the EU NACE codes, do not exist or -if they do- are hopelessly out of date (updated once every 20 years!). Even for non-standard, custom report requests, CBS is unable to gather the data. As hard economic data is the basis on which policymakers make decisions this is a very serious problem. Our sector has taken the initiative together with the DINL association to address this issue, but until it is fixed the government needs to take the lack of good data into account. What s measured, improves! The commercial data center sector in the Netherlands is estimated at 800 to 850 million euros in combined revenue. These 2015 estimates are based on research conducted by two DDA participants. This research was conducted independently of each other. 8 Stimulate rather than regulate The digital economy is driving innovation and growth around the world. As new technologies, business models and companies emerge, they are fundamentally altering the business landscape and ways in which traditional industries operate. As Digital Gateway to Europe we are an obvious choice for foreign investment. But these investors are concerned. Concerned by potential regulations in areas like copyright & intellectual property, intermediary liability & censorship, privacy & security, and infrastructure & services. They prefer countries that focus on creating supportive economic, regulatory and investment environments which consider investor sentiment. This needs an orchestrated interdepartmental, well-balanced approach with regards to policymaking. By doing so, we can stimulate investment and will see significant positive results in terms of increased capital investment, GDP growth and job creation. Keep the pace up and don t try to fix something that isn t broken. 9 Be the guide On 17 November 1988, almost 30 years ago, the Netherlands was the second country in the world to connect to the Internet. Since then we have been forerunners in building the digital infrastructure, developing protocols, doing research, providing education, improving sustainability and increasing security. Well-known institutions like Surf, NLnet foundation, Green IT Amsterdam and The Hague Security Delta have been major contributors and are centers of progress. A trusted, open and free Internet is key for developing a digital economy and society. The Internet s backbone of key protocols and infrastructure can be considered as global public good that provides benefits to everyone in the world. The government of the Netherlands should partner with the digital infrastructure sector as its main knowledge partner. Together we should take a more active role as guide in leading the international agenda for Internet governance for the global public good. The ones who lead should guide the way. 10 Promote the sector History shows us that a good (digital) infrastructure has a catalyzing effect on our economy and society. Supporting our sector will help grow the Netherlands further. On a national level, this entails support and stimulation of our regional/national data centers and our digital infrastructure. This will have direct effects on the local economy and improve energy efficiency to help the environment and reach the energy saving goals faster. On an international level we are in need of permanent backing to step up our representation. Both inbound, attracting foreign direct investment (FDI), as well as outbound, helping Dutch potential companies grow abroad. The Digital Gateway to Europe organization promotes the third Dutch mainport: the best infrastructure, connectivity and digital eco-system in the world. We need to step up the promotion to be able to compete against other countries that have vast, fixed long-term budgets to promote their digital sector. We need to be able to be present the Netherlands on trade shows, conferences, local events, expo centers, etc. etc. on a permanent basis. Promoting the Netherlands is not only about cows anymore, it s about the internet of cows Dutch Datacenter Association

5 Note: As Digital Infrastructure we have become a new separate sector. The Digital infrastructure even has it own mainport that is growing fast towards the size and impact of existing Dutch international hubs as the Port of Rotterdam and Schiphol airport. A true top sector but without the official status and help of the Dutch government in the Dutch Top sector policies. With the digital reality that we now live in the rigid structure need to be changed. As a sector making the future. + 1 Work together As a young, fast-growing sector we have only have recently formed trade associations in the Netherlands to represent us. A concept that is still new to most organizations that are members of the Data Center Association, but also to all organizations comprising the young umbrella association DINL, Digital Infrastructure Netherlands. DINL is the primary representation the Dutch Digital Infrastructure (Data Centers, Internet Access, Cloud & Hosting, Research, Education, Internet exchanges and Domain names). As founding member we have taken the initiative to bring all organizations together, limit the fragmentation, and with this create a single point of contact and a single voice for the shared interest of the sector. As DINL we realize that working together is the only way forward. We also do this actively, openly and with respect for the traditional representations. For the benefit of all Dutch Datacenter Association 5

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