CHANGING DATA CENTRE SITE SELECTION CRITERIA Andrew Jay Executive Director, CBRE Data Centres 20th November 2013 PREPARED FOR
AGENDA Traditional Site Selection Criteria Impact of Changing IT? What Does the Market Show? 2 CBRE DATACENTER DYNAMICS LONDON
TRADITIONAL SITE SELECTION CRITERIA 3 CBRE DATACENTER DYNAMICS LONDON
TRADITIONAL SITE SELECTION CRITERIA Data centre prerequisites: Power, fibre, security, planning and permitting, no hazards Operational prerequisites: IT personnel proximity, Engineering support, travel times Location differentiators: Low taxation Green power Cheap power Timing/speed to market Cheap land 4 CBRE DATACENTER DYNAMICS LONDON
TRADITIONAL SITE SELECTION CRITERIA 5 CBRE DATACENTER DYNAMICS LONDON
TYPES OF DEMAND Major City Demand Low Latency Operational Ease Location Specific Demand Outside of Major Cities Established Corporate Location Local Synchronous Replication Local Demand Minor Cities Smaller scale Flexible Demand Prepared to locate anywhere 6 CBRE DATACENTER DYNAMICS LONDON
IMPACT OF CHANGING IT? 7 CBRE DATACENTER DYNAMICS LONDON
Power Power TRADITIONAL REQUIREMENTS Time Time Total Control Design & Operation Availability of Capital Full service in house IT team Long-term Strategic Asset Relaxed on Specification Capital Restrained - OPEX Compute of demand / Hybrid Shorter/Flexible Contracts 8 CBRE DATACENTER DYNAMICS LONDON
TRADITIONAL REQUIREMENTS 9 CBRE DATACENTER DYNAMICS LONDON
CLOUD REQUIREMENTS Private Cloud Hosting & Managed Services Public Cloud Global IT Infrastructure Latency/Connectivity Proximity to Customers Low Risk Location Power Cost Green Energy Tax Incentives 10 CBRE DATACENTER DYNAMICS LONDON
PRIVATE CLOUD SELECTION CRITERIA 11 CBRE DATACENTER DYNAMICS LONDON
PRIVATE CLOUD Rackspace Hosting signed Digital Realty to build its second data centre in the UK in or around London, on a 12-acre, 10MW site that will be built especially for the cloud and hosting company. We are seeing more and more of our revenue growth coming from cloud, this will be its primary purpose, but as a company we offer hybrid services, where customers can combine cloud and hosting as best fits their needs. Fabio Torlini, Rackspace s VP of International Marketing Savvis, a CenturyLink (CTL) company announced the opening of a new data centre for the London metro market.the new data centre located in London Docklands was leased fully fitted by Savvis. The success of our existing data centre in Slough confirms that businesses view this area as a strategic geographic location. Jeff Von Deylen, president of Savvis Opened in 2011 Terremark s flagship data centre, The NAP of Amsterdam,is directly connected to AMS-IX and through this presence, Terremark s enterprise and government customers can leverage the hundreds of global networks while reducing latency and controlling transit costs.. Amsterdam is an established central business hub for more than 500 international companies, and we are uniquely positioned to tap this market. Herman Oggel, president of Terremark s European business unit. 12 CBRE DATACENTER DYNAMICS LONDON
PUBLIC CLOUD Key Considerations Location Corporate Tax % per kwh Electricity % renewable sources Network Readiness Ease of doing business Austria 25.0% 0.09 55% 19 of 144 29 of 185 Belgium 34.0% 0.10 9% 24 of 144 33 of 185 Czech Republic 19.0% 0.10 10% 42 of 144 65 of 185 Denmark 25.0% 0.09 39% 8 of 144 5 of 185 Finland 24.5% 0.07 28% 1 of 144 11 of 185 France 33.3% 0.08 13% 26 of 144 34 of 185 Germany 29.5% 0.12 20% 13 of 144 20 of 185 Greece 26.0% 0.09 13% 64 of 144 65 of 185 Iceland 20.0% 0.07 100% 17 of 144 14 of 185 Ireland 12.5% 0.11 19% 27 of 144 15 of 185 Italy 31.4% 0.17 24% 27 of 144 73 of 185 Luxembourg 29.2% 0.08 3% 50 of 144 56 of 185 Netherlands 25.0% 0.09 10% 4 of 144 31 of 185 Portugal 25.0% 0.10 44% 33 of 144 30 of 185 Spain 30.0% 0.10 30% 38 of 144 44 of 185 Sweden 22.0% 0.07 59% 3 of 144 13 of 185 Switzerland 18.0% 0.09 55% 6 of 144 28 of 185 United Kingdom 23.0% 0.10 9% 7 of 144 7 of 185 13 CBRE DATACENTER DYNAMICS LONDON
PUBLIC CLOUD SELECTION CRITERIA 14 CBRE DATACENTER DYNAMICS LONDON
PUBLIC CLOUD Dublin, Ireland Sep 2013, Microsoft has been given the go ahead for a new 380 million 35,000sqm data centre in Dublin. The new project will be the fourth in Dublin and bring total spending in the city to 900 million. 15 CBRE DATACENTER DYNAMICS LONDON
PUBLIC CLOUD Dublin, Ireland Amazon established its EC2 offering in December 2008, via a data centre in Dublin. In 2011, Amazon purchased the 22,500sqm former Tesco storage facility at Greenhills Industrial Estate in Dublin 24 for expand its data centre presence. 16 CBRE DATACENTER DYNAMICS LONDON
PUBLIC CLOUD SELECTION CRITERIA 17 CBRE DATACENTER DYNAMICS LONDON
PUBLIC CLOUD Hamina, Finland Nov 2013, Google will invest a further 450 million in addition to the 350 million already spent on the Hamina facility in Finland. The site uses a high tech cooling system, utilising seawater from the Bay of Finland, which reduces energy usage. 18 CBRE DATACENTER DYNAMICS LONDON
PUBLIC CLOUD Lulea, Sweden In northern Sweden 60 miles from Arctic Circle natural cooling will 'chill' computers for eight months per year. The site requires120 MW of energy which is fully derived from hydropower. 19 CBRE DATACENTER DYNAMICS LONDON
WHAT DOES THE MARKET SHOW? 20 CBRE DATACENTER DYNAMICS LONDON
Take up sqm MARKET DEMAND Changing Requirements 120,000 100,000 80,000 60,000 40,000 20,000 0 2006 2007 2008 2009 2010 2011 2012 2013f Retail colo Wholesale colo Self build Restrictive budgets, more realistic assessment of potential usage and need for greater flexibility has led to fall in self build data centres. 21 CBRE DATACENTER DYNAMICS LONDON
LONDON NEW SUPPLY 2012 & 2013 22 CBRE DATACENTER DYNAMICS LONDON
Take Up sqm YoY Supply Increase sqm LONDON 35,000 35.00% 60,000 30,000 30.00% 50,000 25,000 20,000 15,000 10,000 25.00% 20.00% 15.00% 10.00% 40,000 30,000 20,000 5,000 5.00% 10,000 0-0 Take Up Vacancy TAKE UP PRICING SUPPLY AVAILABILITY 23 CBRE DATACENTER DYNAMICS LONDON
LONDON MARKET IN EQUILIBRIUM? 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 2006 2007 2008 2009 2010 2011 2012 2013f 2014f 2015f Available Supply (Sq M) 24 CBRE DATACENTER DYNAMICS LONDON
CONCLUSIONS Traditional requirements getting smaller, needing additional services and more flexible terms. Private & Public Cloud companies driving the market with very different decision making criteria. Colocation pricing pressures creating unique opportunities in some markets which won t last forever. Data centre procurement is undergoing it s biggest change since the dot com crash! 25 CBRE DATACENTER DYNAMICS LONDON
THANK YOU 26 CBRE DATACENTER DYNAMICS LONDON