Europe’s data center market is evolving. FLAP (Frankfurt, London, Amsterdam, Paris) is still dominant but is seeing competition from “tier two” locations which offer vast amounts of land and energy required by data center operators at a lower cost than FLAP. While no single factor is driving growth in these cities, each has a something special to offer the market.
Berlin, Germany- Location, location, location
With the cost of data center space in Frankfurt at a premium, it makes sense that operators, including Colt, are pivoting to Germany’s capital and largest city, Berlin, as an area for great growth. Berlin has a bustling tech and business market, so operators benefit from the “minimal latency” offered by local Berlin data centers. Germany’s strict data protection laws also makes keeping data in-country a safe and practical option.
Dublin, Ireland- Data sovereignty and data protection
Because of Ireland’s low corporate tax rate, Dublin hosts the EMEA headquarters of many major multinational companies. This creates vast amounts of locally generated data that needs to comply with both GDPR and increasing calls for data sovereignty. Dublin’s data center market continues to see increasing demand. The Ireland market is also benefiting from the uncertainty caused by Brexit, as businesses look to keep their headquarters (and data) located in the European Union instead of the UK. The presence of hyperscale giants AWS, Google and Microsoft in Ireland is paving the way for a flurry of new investments, with about 20 data centers expected to open by 2025. (1) To help meet the demands of data center operators, Sims Lifecyle Services opened a Circular Center in Kilbeggan, just west of Dublin, in 2021.
Madrid, Spain- If you build it, they will come
As cloud providers including Microsoft and AWS build data centers in Madrid, government and local business investments are supporting the sector’s growth. The government is investing around $720 million to make Spain a global leader in the artificial intelligence market, and will install 50 GW of renewable energy by 2030 as part of its National Integrated Energy and Climate Plan. At the same time, businesses are investing over $5 billion on 5G technology and broadband coverage by 2025, increasing the demand for edge data center computing. (2)
Stockholm, Sweden- It’s all about sustainability
Many global rankings place Sweden at or near the top of the world’s most sustainable countries, which appeals to a data center market increasingly focusing on environmental performance. Sixty percent of Sweden’s energy is already renewable and that is expected to reach 100% by 2040. Energy costs are also low compared to other countries in Europe, which is helping to spur the buildout of hyperscale data centers, especially in Stockholm which generates 70% of the country’s data center revenue. Stockholm Data Parks (SDP) is turning a major data center liability ̶ excess heat generated to run servers ̶ into usable product. Heat is recovered and used to power city buildings, 95% of which are connected to a single 2,800km system of heating and cooling pipes. According to SDP head Eric Rylander, “As data centres grow, we will be able to recover approximately 40MW of heat from them, enough to heat around 80,000 modern residential flats.” (3)
Warsaw, Poland- Government support and investment in technology
In 2017, the Polski Fundusz Rozwoju S.A., or Polish Development Fund, was established to help drive economic investment and innovation, including in technology and network connectivity. This helped create the “Polish Digital Valley”, a technology hub around Warsaw. Hyperscale development accelerated in 2020, when Microsoft and Google announced, respectively, $1 and $2 billion investments in data center development. Investment is projected to keep growing.
Zurich, Switzerland- Capitalizing on an existing major financial center
Zurich is an established center for financial services firms and the fintech sector, as well as being a popular base for home-grown international companies including Novartis, UBS and Credit Suisse. Because Switzerland is not a member of the European Union, businesses here aren’t required to comply with GDPR. Instead they follow strong local data protection laws, and still benefit from a central location in Europe.
The data center landscape seems poised for exceptional growth is these regions as data center operators look to meet local demand while utilizing renewable energy, robust local infrastructure and government support while maintaining data protection.
Sims Lifecycle Services stands ready to support sustainable solutions for data center equipment when retired from these European data center hubs. To learn more about how Sims Lifecycle Services can help meet your needs in these cities and others worldwide, visit: https://www.simslifecycle.com/data-center/