Paris is relegated to join Ireland and Scandinavia in lower league, while Spain and Italy lag far behind.
With data sovereignty an issue and with Safe Harbour an increasingly distant memory, what are the locations that you need to consider when choosing to locate a data centre?
The European data centre co-location market has grown by nearly 6% in 2015
Go where there’s demand
The European data centre co-location market has grown by nearly 6 percent since the beginning of 2015 with supply increasing by 11MW in the last quarter to reach 816MW, according to global real estate advisor CBRE. This growth follows investment of $8.7 billion in the sector in the second quarter driven largely by increased M&A activity. According to CBRE, London had most take-up for the second consecutive quarter across the main European markets that it describes as FLAP – Frankfurt, London, Amsterdam and Paris.
Check out the latest CBRE European Data Centre report here and make sure you study the special editorial viewpoint from Compare the Cloud on page 5.
Join the Crowd
If you want to be able to interoperate with other cloud providers with minimum latency then it makes sense to locate where everyone else does. Major players like Equinix have a presence in several European cities aggregates thousands of peering sessions onto a shared fabric, connecting peers at 19 Internet Exchange Point (IXP) locations in 17 global metropolitan areas. In Europe Equinix partners with ALP-IX in Munich, AMS-IX and NL-IX in Amsterdam, DE-CIX , KleyReX and DatalX in Frankfurt, ECIX in Dusseldorf, LINX in London, and co-operates CIXP in Geneva in conjunction with CERN. Notably missing from the list is Paris, which doesn’t have an Equinix Internet Exchange Point.
Stand next to the big fella
If your clients are going to be looking to manage hybrid environments then proximity or connectivity to the major public cloud vendors will be advantageous. Having initially based their European operations in Dublin, Amsterdam and Frankfurt, the mega-scale players (AWS and Azure) have announced that they are coming to London. While the other players don’t have a presence yet in Paris, IBM Softlayer does – currently serving all four FLAP locations as well as Milan.
Be on the Grid
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You also want to be able to link up to other major data centres across the globe and it pays to go for a location that is served by multiple carriers to give you the opportunity to get the best rates. Again it pays to be located near Internet Exchange Points such as those from equinox where most carriers tend to connect. And again Paris isn’t as well served by exchange points and carriers as its main FLAP rivals.
Get yourself a tax break
Certain locations, such as Dublin, are attractive as a location due to the favourable tax regime in Ireland, but many other locations are seeking to offer competitive tax breaks too.
With power one of the main costs and cooling one of the main power requirements, locating in a cool location, such as Scandinavia has significant cost advantages as long as you’ve got the right connectivity with the rest of the world.
Of course you also need to take into account the availability of suitable sites and skills. This depends of course on whether you’re looking to build your own or buy capacity from others. The CBRE report tracks both available capacity and demand and is a vital reference point.
The final fly in the ointment is regulation
The final fly in the ointment is regulation. While at a European level the safe harbour ruling has forced global enterprises and operators to ensure that they have a footprint in both the US and European markets, there are country specific regulations that go even further. German privacy rules may be reasonably demanding, but its membership of the single European market prevents Germany from being too restrictive. Switzerland and Russia however have chosen to be significantly more restrictive, with the Russia data localisation law going as far as forcing companies that collect the “personal information” of Russian users to store their data on servers within the country and notify the authorities of their physical location when asked.
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Taking all these factors into account and studying the demand and supply trends from the CBRE report, it is clear that London is the top location for data centre activity just now, with Frankfurt and Amsterdam both in close contention. Paris however is falling behind and risks being relegated to a lower league alongside Dublin and the main Scandinavian centres. Meanwhile Russia’s self-imposed exile makes it market for local operation only. Other major European cities currently lack the infrastructure, connectivity and critical mass to compete.