european data centre landscape prepared for fact … · european data centre landscape prepared for...

PREPARED FOR PREPARED FOR European Data Centre Landscape

Fact or Fiction? Andrew Jay– Head of CBRE Data Centre Solutions

9th October 2014

2 CBRE DATA CENTRE SOLUTIONS

Source: CBRE Data Centre Research

AGENDA

“Data centre demand is increasing exponentially”

“Data centre demand is all driven by the banks”

“Retail colo market is growing faster than wholesale”

“Cloud will undermine traditional data centre locations”

“Colocation prices are rising”



FACT OR FICTION?




Forecast

0

10

20

30

40

50

60

70

80

90

MW

DATA CENTRE DEMAND European Colocation Take Up – Major Markets



EUROPEAN MARKET DEMAND

Source: Arial 9pt, Dark Grey

London Colocation Take Up Amsterdam Colocation Take Up

Paris Colocation Take Up Frankfurt Colocation Take Up

0

5

10

15

20

25

30

MW

Take Up MW Forecast

0

5

10

15

20

25

30

MW

Take Up MW Forecast

0

5

10

15

20

25

30

MW

Take Up MW Forecast

0

5

10

15

20

25

30

MW

Take Up MW Forecast



FACT OR FICTION?




DATA CENTRE DEMAND By Sector

Cloud2% Corporate

14%

Financial19%

Technology37%

Managed Services

3%

Telecom/ISP12%

Systems Integrator

13%

2008-2010

Cloud38%

Corporate9%

Financial10%

Technology14%

Managed Services

11%

Telecom/ISP7%

Systems Integrator

11%

2011-2013

Cloud demand in 2014 currently accounts for 77% of total colocation take up!

2005-2007

Cloud1%

Corporate15%

Financial36%

Technology23%

Managed Services

3%

Telecom/ISP5%

Systems Integrator

17%



DATA CENTRE DEMAND Why has corporate spending slowed?

Capital Constraints

Capacity Over Procurement

Changing IT

Hybrid Outsourcing

Virtualisation Increased Processing

Power



FACT OR FICTION?




LISTED OPERATORS


Digital Realty vs European Take Up Equinix vs European Take Up

Wholesalers Retailers

0

10

20

30

40

50

60

70

80

0

5

10

15

20

25

30

35

Sh

are

Pri

ce

MW

Take Up Digital Realty

0

50

100

150

200

250

0

5

10

15

20

25

30

35

Sh

are

Pri

ce

MW

Take Up Equinix



Forecast

0

5

10

15

20

25

30

35

40

45

50M

W

Retail Wholesale

DATA CENTRE TAKE UP


European Colocation Take Up – Major Markets

5 year average - Retail 5 year average - Wholesale



-

1.0

2.0

3.0

4.0

5.0

6.0

2008 2009 2010 2012 2013 2014

Tra

nsa

cti

on

Siz

e M

W

TRANSACTION SIZE


Deal sizes are shrinking!



Forecast

0

5

10

15

20

25

30

35

40

45

50M

W

DATA CENTRE DEMAND


European Retail Take Up – Major Markets

0

5

10

15

20

25

30

35

40

45

50M

W



FACT OR FICTION?




GLOBAL IT INFRASTRUCTURE COMPANIES



‘CLOUD’ REQUIREMENTS

Latency/Connectivity

Customer Proximity

Low Risk Location

Power Cost

Green Energy

Tax

Incentives

‘Commodity’ Cloud

Global IT Infrastructure

‘Bespoke’ Cloud

Hosting & Managed Services



DATA CENTRE DEMAND Total MW transacted – Major Markets

2005-2007

Cloud1

Corporate20

Financial51

Technology33

Managed Services

5

Telecom/ISP6

Systems Integrator

24

2008-2010

Cloud4 Corporate

28

Financial37

Technology70

Managed Services

5

Telecom/ISP23

Systems Integrator

24

2011-2013

Cloud74

Corporate19

Financial19

Technology27

Managed Services

22

Telecom/ISP13

Systems Integrator

21

In H1 2014 Cloud accounted for 29MW of total colocation take up!



EUROPE’S DATA CENTRE SUPPLY

0

Colocation Supply

(MW)

Commodity Cloud

(MW)

Colocation vs Commodity Cloud Self Build



FACT OR FICTION




EUROPEAN MARKET OVERVIEW


Colocation Available Supply

0

50

100

150

200

250

300

MW

Available

European Colocation – Major Markets

0

20

40

60

80

100

120

MW

Total Take Up

Colocation Demand

Forecast



0.0

1.0

2.0

3.0

4.0

5.0

6.0

Ab

sorp

tio

n ra

te (yrs

)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Ab

sorp

tio

n ra

te (yrs

)

London Market Absorption Amsterdam Market Absorption

Paris Market Absorption Frankfurt Market Absorption

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Ab

sorp

tio

n ra

te (yrs

)

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4.0

5.0

6.0

Ab

sorp

tio

n ra

te (yrs

)

0

50

100

150

200

250

300

Pri

ce– 5

00kW

(€/k

W)

0

50

100

150

200

250

300

Pri

ce– 5

00kW

(€/k

W)

0

50

100

150

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250

300

Pri

ce– 5

00kW

(€/k

W)

0

50

100

150

200

250

300

Pri

ce– 5

00kW

(€/k

W)

EUROPEAN MARKET ABSORPTION


0.0

1.0

2.0

3.0

4.0

5.0

6.0

Ab

so

rpti

on

rate

(yrs

)

0

50

100

150

200

250

300

Pri

ce– 5

00kW

(€/k

W)

London



EUROPEAN MARKET DEMAND


0

50

100

150

200

250

Zurich Frankfurt

€p

er

kW

0

20

40

60

80

100

120

140

Dublin Frankfurt

€p

er

kW

Retail - Typical Pricing for 50 Kw Wholesale- Typical Pricing for 1MW

CONCLUSIONS



CONCLUSION







False - In the early years but stable since the financial crisis

False - Between 2005 – 2008 but has reduced significantly since then

True - Changing procurement trends are benefitting established retail providers

False - Cloud is reinforcing demand in the core locations

True/False - in some smaller locations but in general pricing is falling

Any Questions?

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