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David Liggitt, founder of datacenterHawk, recently met with Andy Stewart, CEO of Evoque Data Centers, and Peter Roosakos, CTO of Foghorn Consulting. The news on everyone’s mind: Evoque’s acquisition of Foghorn. About the Guests, and What Prompted the Acquisition Andy was the CFO and then CSO at TierPoint through over $2 billion worth of acquisitions and funding. He took over as CEO at Evoque about a year ago, which meant that he had to primarily learn the corporate culture and team compositions remotely. Once he established pandemic protocols and got a good look at the internal workings of Evoque, he brought in key executives and revamped the sales model of the company. Each move reflected the industry changes that had been happening since the pandemic started and built towards the overall plan for a post-pandemic future. Peter started in the mid 90's as the cofounder and CTO of Computerlandscapes Inc. Exodus eventually acquired the consulting company to build out their professional services division. Fast forward eight years, and the cloud was in its infancy. Peter's team at Opelin used these new scaling infrastructure capabilities to serve the needs of smaller companies. HP acquired them in 2007, and he stayed on for a couple of years during the transition period. After he left HP, he started Foghorn with the mission of leveraging the public cloud to move companies forward. In the front end of the interview, Andy shared what he's most excited about with the acquisition of Foghorn. The Mountain View-based digital transformation company recently agreed to a union of their offerings. He said that the acquisition will change how Evoque goes to market and drastically expand what they can offer to customers. His enterprise clients want better cost management and visibility into their infrastructure usage. Their feedback made it clear: Digital transformation and application-first approaches were the future of his company. Cloud Computing is the Future... Sometimes David asked Peter how he talks a client through the planning phase and how long a data center and cloud relationship can last. Peter noted that, historically, all-in strategies seemed like the most cost effective and straightforward way to go: Either all on-premises, all in colocation, or all on cloud. But digital transformation has put a stress on pure performance over simplicity. So almost everything these days is a hybrid solution, as the apps take center stage. Optimizing workloads to run on the most performant platforms yields far better long term results. Andy added how this acquisition helps clients plan beyond pure colocation space and power strategies. He mentions that it's hard to stand out from the crowd as a specialist, particularly when cloud computing is such a huge part of the landscape. The flexibility needs to be there. Infrastructure agnostic approaches are far more impressive and can cover clients' holistic needs. It allows a hosting strategy that evolves over time; nothing is static, and nothing is overly painful to adjust to if a new efficiency takes precedence for a client. Andy also shared that an important strategy they’ve adopted includes providing colocation space to niche service vendors that can meet client needs and introducing them to enterprise clients as service partners.

We sat down with Damien Gaynor, Echelon’s Director of Sales and Marketing, to discover what they’ve done to get into the data center space and what they’re doing to stay there. As Gaynor shares, Echelon is working to meet the rapidly expanding global demand for data processing and storage solutions by developing large-scale campuses across Europe (focusing most of their efforts in Ireland). But what makes Echelon different is their focus on sustainability. Sustainable Energy Isn’t Just a Niche With the global green data center market expected to grow by $44.92 billion during the 2020-2024 period, it’s no secret that this sector of the market is available for anyone looking to make a splash. As cloud computing continues to leave a massive energy footprint, the option to push renewably powered businesses forward rests in the hands of the data center providers. Coming from a commercial real estate background, Damien and the team at Echelon recognized this responsibility as an opening in the European market. They noticed that a majority of the power demand came from large metropolitan areas like London, Slough, Frankfurt, Paris, and Dublin. What they realized was that this demand created areas of strain on networks where the transmission capacity experiences real pressure to deal with all the centralized demand. So instead of trying to break into these urban hubs, Echelon has instead focused on creating data centers in rural areas just outside large cities. Building Close to Renewable Resources For example, their DUB20 site in Wicklow (which is about 30 miles south of Dublin) is located near the Arklow Wind Bank where SSE Renewables is building one of the largest offshore wind farms in Ireland. When it's complete, it will generate about 800-850 megawatts. A hydrogen production facility is also planned for the DUB20 site. With ample access to water from the Avoca River and the proximity of a source of large-scale renewable energy—plus a national grid connection—DUB20 is ideally suited to facilitate the creation of a long-term, sustainable solution to energy storage. The idea is to build a data center closer to a source of renewable power and closer to the point of generation so the grid isn't put under so much pressure. Echelon’s theory is that in the short- to medium-term, as the industry moves towards genuinely renewable and environmentally friendly operation, “halfway house” solutions will be required to mitigate against aging and overburdened grid infrastructure. With that in mind, their goal is that all data centers one day be powered wholly by renewable energy. How Financial Incentives Foster Environmental Awareness Damien shares that at the end of the day, the push toward providing power through the use of renewable resources will come down to both the data center providers and the occupiers working toward the same goals. Wanting to be green is fantastic, he shares, but are we willing to pay for it? Are we willing to incentivize the person tasked with delivering the data to do so responsibly? If not, people will continue to default to what is cheapest and easiest. As of today, making an effort to use renewable resources may take some extra energy. But if Echelon is an example of anything, it’s that the market is continuing to trend toward renewable resources, and people everywhere want to work with environmentally conscious companies. Right now, the use of renewable resources is a competitive advantage. But soon, environmental awareness and responsible power consumption are going to be considered the bare minimum. The data centers leading this charge today are the ones who will be on top tomorrow.

The APAC data center market has distinct cultural and geographical diversity, unique supply challenges, and a high potential for hyperscale growth that make it a market worth looking at closely. A Diverse Landscape To get a framework for how major and secondary data center markets work in a certain part of the world, it’s important to understand the regions of the area. For example, in the United States, the larger data center markets include Northern Virginia, Chicago, Phoenix, Dallas, and Northern California. In Europe, there’s Frankfurt, London, Amsterdam, Paris, and Dublin (often referred to as “FLAP-D”). Turning to Asia-Pacific, the three major cities that immediately come to mind are Singapore, Sydney, and Hong Kong. What makes the APAC data center market so unique is the cultural diversity it represents. This leads to certain markets operating in near isolation because of the cultures they represent. Japan is seeing growth in Tokyo and Osaka. China has Shanghai and Beijing. On top of that, there’s an increasing amount of capacity across Southeast Asia, which includes Jakarta in Indonesia, as well as Vietnam and Thailand. And last, but certainly not least, there’s significant activity in India where huge amounts of growth can be expected in the coming years. These unique areas come with their own potential, but supply challenges can still exist anywhere. Market-Specific Challenges Supply chain challenges and issues delivering power infrastructure continue to pop up all around the globe, and the APAC market is no exception. In Singapore, for example, the government has placed a moratorium on new construction. While this has put a halt on the breaking of new ground, it’s also made it difficult for those who are in the process of building new sites, as the price of building materials continues to rise. Of course, this issue is specific to Singapore, but that doesn’t mean it’s without a ripple effect. The Sydney market, and Australia in general, has continued to experience steady demand and even seemed to benefit from the slowdown in Singapore. This trend is one we’ve seen happen worldwide—where lack of infrastructure or capacity in one area has pushed demand to a neighboring location (which happens often in the U.S.). While Singapore has slowed down at the moment, it still remains an important market to keep an eye on in light of its strategic importance. The same can be said for Hong Kong, which represents the gateway into the China market and where power is relatively inexpensive. Following the Hyperscale Trend Hyperscale data centers are driving the conversation (and the demand) all around the world, and Asia is beginning to see this play out. While we’ve seen significant investment in subsea fibers that have come from hyperscale centers, Asia is still in the early stages of this process. Part of the reason they’re behind the likes of Europe and the U.S. is because of the sheer size and scale of many of their markets. India, for example, requires hyperscale operators to develop a completely new and unique strategy. While a large scale and scope of activity may sound like it means there’s more to go around, it has actually led to increased competition as hyperscale operators look to meet the various needs of hyperscale customers. However, hyperscale is only a piece of the puzzle when it comes to Asia. The entrepreneurial energy that exists across all the various markets means new organizations with new technologies are placing new demands on data centers. Being on the edge of new developments certainly means that the data center markets will continue to grow in both demand and capacity. Both primary and secondary markets are poised for growth, so the question one has to ask about the APAC data center market isn’t if it will continue to grow, but how fast.

David Horowitz, the SVP and Director of Sales at T5 Data Centers, joins us for a conversation about the Chicago data center market. David walks us through the Chicago market's current challenges and opportunities, and what he sees on the horizon for T5 and the industry as a whole. T5 and the Chicago Market Suburban Chicago has been nurturing a growing data center market for years, and thanks to the presence of players like T5 in the Chicago suburb of Elk Grove Village, the Chicago market is now one of the top in the country. Horowitz says it was around 2007 that data center providers started buying facilities, land sites, and industrial buildings in the area. Early entrants like Exodus and CenturyLink helped create the fiber-rich environment that exists today, and significant investment from local utility provider ComEd brought the necessary power and utility infrastructure for Elk Grove Village to boom. With connectivity to downtown Chicago, Elk Grove Village has become the heart of the city’s suburban market. By Horowitz’s estimation, there are roughly a million and a half square feet of data center product in the area, all within a 1.5-mile radius. Giving Customers What They Want T5’s success in Chicago and elsewhere is owed to their guiding ethos of putting customers’ needs first. According to Horowitz, the company has learned a lot of lessons through trial and error, but the most significant learnings have come from paying attention to customers — and responding to what they have to say. Business development has come as a byproduct of simply supporting clients with growing requirements and adapting services to meet customer demand. “We operate the best data centers, “ Horowitz says, “because [our customers] tell us we do.” Dealing with Uncertainty One current challenge Horowitz sees for T5, however, is lease renewal. Transactions from eight to ten years ago are coming up for renewal, and many of those customers have a much different perspective on their utilization rates now than when those agreements were signed. On top of that, migration costs aren’t nearly what they used to be. It’s now much easier to relocate than in the past, and Horowitz says many more customers are shopping around. “There's a lot of uncertainty about how customers are going to treat lease expirations,” he says. But he’s excited about the possibilities that could bring, particularly with build-to-suit opportunities in health care, finance, and with hyperscale users. What’s on the Horizon? It’s an exciting time for the data center industry, and Horowitz sees big things coming down the pike. First, there’s an environmental impact. “Data centers are impactful on the environment,” he says. And T5 is making a big investment in solar panels to support its goals for positive impact. “Sustainability initiatives [are] huge for us,” Horowitz says, not just for T5 internally, but for helping customers achieve their own goals for sustainability as well. Thinking about the next 15 years, Horowitz dreams of helping the world’s top 100 companies execute build-to-suit properties, landing government contracts, and expanding T5’s business internationally. On the build-to-suit front, Horowitz sees T5 as a collaborative partner, helping with site selection and development — whether they end up owning the facility or handing off keys once the shell is built. The federal government space is also one where Horowitz thinks T5 could support growth from a facility management perspective. For the data center industry as a whole, Horowitz says the best is yet to come. “A couple years ago, people said it was in the second inning. I still think it’s in the second inning,” he says.

Phoenix’s Data Centers By the Numbers Our latest podcast touches on the changes that have happened in the Phoenix area over the last five years. By measuring the planned power for data centers, the growth metrics become clear. Planned power went from 185 megawatts in 2017, all the way to 1,690 megawatts in 2021. This is to enable the rapid hosting of cloud service providers as soon as they’re ready to make their move into local facilities. Some data centers intentionally overestimate their power requirements, sometimes to the point of speculation, just to be ready for a theoretical client boom in the upcoming months. Phoenix is one of the few municipalities that can offer providers of data center services the entire package necessary for immediate growth: Copious amounts of space, sufficient power, water, friendly taxation, and modern purpose-built facilities. When companies look at the operations and opportunity costs of Arizona when compared to the likes of California, Phoenix becomes quite attractive. Corporate Attitudes Driving Data Center Services One of the things that is driving the data center services market in mid 2021 is the trend of moving cloud services as close to the demarcation point as possible in enterprise networks. This means cloud service providers are scrambling to find local presences in major metropolitan data centers, wherever their clients have a significant facility. The reasons are many, ranging from low latency demands from financial services companies to continuous monitoring needs for high uptime applications. Whatever the clients’ reasoning, they need to make use of techniques that feed into high speed hybrid clouds. Their needs have to be handled on many different layers of the OSI model, and fully automated to be useful to the DevOps engineers setting up the application servers. This creates a division of labor between the data center services company, the cloud service provider, and the corporate client. Millisecond-critical criteria could be set on a variety of different services: UPS functionality, rack monitoring, network hardware, environmental controls. And that means local points of presence for the cloud provider in every city where their clients operate. Additionally, Phoenix has a ton of enterprise market growth. Companies already based in the area are expanding now that they have a better grasp of what the post pandemic landscape will look like. They’re also adding additional capacity as telecommuting becomes a permanent part of their corporate culture. In the near future, the enterprise sector will go back to pre-Covid levels of expansion, if the experts are correct in their predictions. Speaking of looking into the crystal ball… Predictions for Phoenix’s Future We are quite bullish on the future of data center services and cloud service providers in Phoenix. Though there are enough different entities to keep pricing competitive, there’s also enough demand to allow all of the dedicated players to thrive. And from past commercial interactions, we can be almost certain that the assets and space of any data center company who falters will be rapidly acquired by one of the bigger players in the marketplace. Building up the technical capacity that will ensure smooth upscaling for PaaS and SaaS clients is going to be critical over the next three to four years. That means pushing the automation of on-demand services right to the limit, and provisioning for more ad-hoc expansion than data centers have traditionally done in the past.

Why hyperscale data centers in Australia forecast global industry growth This is an episode of HawkTalk, datacenterHawk’s series of candid one on one conversations with executives and leaders in the data center industry. If you enjoyed this episode, you can check them all out on our blog. If you’d like to know when we release future episodes, you can subscribe here. James Veness is the Head of Portfolio for Data Centers with Fujitsu Australia, and the work he’s doing is just one example of how the global infrastructure of hyperscale data centers only continues to grow. As we’ve shared before, according to Infiniti Research, the global data center market is anticipated to grow by over $270 billion between 2020-2024. If Veness is a case study in anything it’s that these projections seem more than fair as the reach of data centers expands across various countries and continents. Veness manages a portfolio of six different data centers across Australia. His portfolio is one of Fujitsu Australia’s seven portfolios made up of over 100 data centers in Japan, the U.K., and Singapore. Their flagship site in Western Sydney, a popular location for computer farms, is a very large hyperscale site that is now up to 90 megawatts, and it is there alongside a secondary site that is up to 30 megawatts. Per our research, Northern Virginia, Northern California, Phoenix, Dallas, and Chicago have all seen hyperscale development and leasing. But clearly, these types of data centers are continuing to show up all over the globe, and this growth is changing the entire data center landscape. As Veness shares on this latest HawkTalk, it was only a few years ago when you would build a single data center that would focus on every customer—hyperscale, wholesale, retail, etc. But what's changed over the last few years is that different customers now have different requirements. That includes design, build, scale, speed, security, efficiency, connectivity, and everything in between. All these factors vary depending on the type of customer. Providers such as Fujitsu and others are now building for one specific market, and with all this intensely focused building, we’re seeing a wave of growth in individual markets. Sydney has now become a very mature market, and with well over 500 megawatts of load, it's growing exponentially. Sydney also has three distinct zones within the data center market—Southeast zone, North zone, and West zone—that make it quite an important regional footprint. This growth then ripples across the rest of the continent into Melbourne, and especially Perth, with the upgraded infrastructure coming in that wasn't there a few years ago. Factor in things like Australia being one of the first countries on the planet to see the sun every day, as well as being a relatively safe and stable political environment, and it’s clear why companies view it as an attractive place to build. With the growth of hyperscale data centers in North America, Europe, Asia, and now Australia, combined with the increased demands from Amazon, Microsoft, Google, IBM, and the like, the world is looking at more and more development of these types of centers. This will raise questions regarding supply and demand, as well as sustainability and other issues. People like Veness and companies like Fujitsu are simply forebearers of a future full of data centers. We’re excited to watch the growth of data center markets in Asia Pacific. If you need additional data to guide your decisions in Asia Pacific, then you can request access to our upcoming data center market reports on Singapore, Hong Kong, and Sydney.

The Spectrum of Hyperscale Data Centers Tim puts hyperscale users on a spectrum: on one end there are first-party applications driving data center demand, and on the other end are third parties driving demand. What that means is that if a data center is providing cloud services — meaning that it has customers who are external to the business — it’s on the end where a third party is driving demand. Alternatively, if internal applications are primarily driving demand, then that's on the other end of the spectrum. Tim explains that understanding which end of the spectrum the hyperscale center is on determines the ability to predict future demand. With first-party applications driving data center demand, someone can actually look at data points like usage rates and historic statistics to understand how the application works and grows and gain insights that help improve performance. On the other hand, third-party applications can come with demands that data centers aren’t currently aware of. They can be running smoothly one day, but then instantaneously speed up and need more capacity the next day for reasons no one could’ve anticipated. Providing Flexibility and Speed Understanding this reality and preparing to meet the different demands of different hyperscale data centers is what makes Tim and his team so effective. Because they can look at the specific needs of each data center and clarify whether they’re operating in a predictable or unpredictable environment, they can plan accordingly — or at least they can know when they’re in a position where any plan might need to get thrown out the window. This situation demands flexibility from all involved. Some data centers may have extreme clarity in what drives their demand, making for fewer last-minute changes. But data centers that rely on third parties have to expect that demand may vary, and they may not be able to see that change in demand coming. Hence, flexibility is key and maintaining an emphasis on speed is crucial. It’s no secret that data center growth has continued to skyrocket over the last five to ten years (1Q 2021 has shown yet another period of growth across the globe). And with that growth comes an increase in the need to have a team that can handle the speed of expansion. Yet, not all hyperscale centers are capable of growing as quickly as they want to with the current size team that they have. That’s where someone like Tim comes in. One of his goals is to buttress the existing internal self-perform capacity of hyperscale centers with an external team that can help carry the weight. Whether the gap is in construction, sales, marketing, or something else, Tim and his team are always looking to step in and fill whatever roles are needed to facilitate the rapid expansion of hyperscale centers and their capacity. While more hands on deck may help a ship sail faster, there’s still an issue of certainty. A hyperscale center may be excited to have someone like Tim and his team to help, but they still have to ask: Can we trust where we’re going, and do we know if we’re going to get there? As Tim shares, understanding the different needs of different hyperscale clients is crucial to serving them in the most efficient and effective manner. Walking into a project with eyes wide open, understanding the overall market, and intuiting the individual needs of different data centers are three invaluable traits that make someone like Tim, and anyone else like him, poised for success.

Our talk with Bruce Lehrman about Involta’s business strategy contained some interesting details and pearls of wisdom. They discussed getting involved early in emerging markets, what it takes to open up a world-class data center in a new location, and what verticals have shown the most interest in Involta’s services. Surprisingly, it was often the healthcare industry that became early adopters of these new data center locations. Lehrman said that a lot of the companies he’s worked with have been ‘really focused on network latency from their core data centers and backup facilities to their primary hospitals and clinics. Given that some of these markets are off the beaten path, and healthcare infrastructure is often quite dated, these companies jump at the opportunity to upgrade their network capabilities. The Rewards of Hosting Healthcare Lehrman mentioned a positive aspect of hosting healthcare providers: The ability to forge a long-term partnership. Sure, the initial qualification and setup might be more painful than some other clients. But once that’s done, you may very well have a client for life. Once healthcare organizations have tech that works and that meets or exceeds their needs, they’re loath to move off of it. And on the flip side of the coin, once a HIPAA Business Associate establishes a friendly set of standards for one healthcare organization, it can be tweaked and applied to future partnerships in that vertical, all across the country. The first time is always the hardest. But that effort need not be duplicated for every new healthcare client. A second reward is community. Lehrman has set up advisory boards for hosting healthcare providers, made up of customers and non-customers alike. He uses these roundtables to keep abreast of the market and the upcoming needs and expectations of the industry. It’s not only a valuable feedback tool, but getting back to each individual about their concerns and feedback forms a connection… current customers become more trusting customers, and non-customers might have a reason to do business with someone they trust in the future. These benefits can lead to larger opportunities. Once one metropolitan area is taken care of, there’s a distinct possibility that the parent company will ask about opening small data centers in other parts of the country. That’s because healthcare providers, more and more often, are interested in a different kind of hosting model. They’re looking out towards the edge. Living on the Edge ‘The edge’ should also not be confused with simple mirroring, load balancing, or redundancy operations. Although aspects of these things might be included in edge architecture, they aren’t the whole picture. The edge is about decentralizing a data center. If a healthcare provider is dealing with highly latency-sensitive operations, such as remote laparoscopic surgery, they don’t want to go through a bunch of hoops to get to their destination. So providers find locations where they can host the client’s hardware and software as close to their demarcation point as possible. Alternatively, they set up shop at a low latency location somewhere between a healthcare organization’s headquarters and their metropolitan branch. Either way, the goal is to be as close to the ‘edge’ of the involved private networks as possible. This can mean more geographic expansion, more location scouting, and more time dedicated to clients when you’re hosting healthcare operations. But it can also mean establishing footholds in markets that the hosting provider can later expand further if there’s a demand. Lehrman mentioned that he’s seeing a big move towards decentralization, and within the next ten years quite a few medium to large-sized enterprises will fully take on edge networking. Involta is constantly looking at new tools and capabilities that will allow them to be as flexible as the client needs them to be.

Why Dallas Continues to Be An Attractive Market One of Flexential’s biggest markets is the Dallas data center market. Flexential has experienced continual growth in Dallas and their customers find this market attractive for their IT infrastructure. As Downie acknowledges, Dallas has been a destination market for enterprises for a decade or more and he feels fortunate to have participated in that. Still, there were questions as to whether or not Dallas was oversupplied and if this would lead to price compression. That being said, it seems that the Dallas supply is always consumed and Downie believes that we’re currently seeing a continuation of this fact. “I think there’s clearly been a change in product profile in Dallas in terms of what’s being built and some folks in the industry are solving for the very large-scale, multi-megawatt deployments and that just drives a price that, in comparison to history, would be considered compressed. But there’s still a significant amount of enterprise”. Specifically, Downie believes that the large retail and medium retail that’s going on in the Dallas data center market has remained consistently strong. Downie also acknowledges that another reason that Dallas is such an attractive market is that it has inexpensive land and power, along with the fact that the city offers tax benefits that are business-friendly. These factors have driven large-scale enterprise into the market in recent years. Further, from a network density perspective, Dallas is well-situated. Downie states that it is all of these various factors that continue to make him optimistic about continuing to operate in the Dallas data center market. What Types of Companies Favor the Dallas Data Center Market? While Dallas is an attractive market in various ways, there tend to be a few types of companies that favor the current market found there. For example, technology companies, insurance companies, and financial companies fit the enterprise user base that data center companies like Flexential have the ability to attract. Downie remarks on the fact that companies within these industries are those that have been both early and long-tenured consumers of what companies like his deliver. Flexential’s Potential Growth in the Dallas Data Center Market in 2021 As Flexential comes out of a difficult year in 2020, Downie remarks on the fact that, just as is the case in any year, his company will come out stronger in its ability to deliver a high-quality value proposition to their customers. For this reason, he expects 2021 to be an exciting year for the Dallas data center market. “A lot of the things that we were able to accomplish in 2020 position us well.” In the second quarter of 2021, Flexential will be opening up its largest data center ever in Hillsborough. This speaks to Flexential’s focus on continuing to drive the scale of its platform and its relevance for national-use cases. Further, Flexential’s Dallas expansion is an exciting prospect for much the same reason. “We’re very focused in 2021 on continuing to drive the evolution of the customer experience,” Downie says. He also says that it is a primary focus of Flexential to evolve its portal, something that is a differentiator for their existing customers. Finally, Downie says that they want to make sure that they’re focusing on building automation into the network platforms and remarks on the power of the FlexAnywhere Network in its ability to connect all of Flexential’s facilities together, making consumption easier than ever. It is exciting to watch Flexential’s growth and it seems that there are some potentially revolutionary things in the works for 2021!

From a data center perspective, whenever we approach the end of a quarter, there is always a lot of exciting data to review and trends to discuss. Today, we will be discussing all of the major European data center market highlights for 1Q 2021. We’ll also briefly touch upon the condition of the market at the end of 2020 so that we can better understand how the previous year played a role in launching us into the position we find ourselves in today. The European Data Center Market in 2020 2020 was a challenging year across various industries, the data center industry included. That being said, although 2020 was a year fraught with obstacles, it proved to be one of the strongest years that the data center industry has seen in recent memory - not only in terms of absorption but also in regards to the European data center market. When speaking to operators, it seems like the legal process of closing such deals took much longer than anyone anticipated. That being said, when taking into account the deals that should have been closed in 2020 and will now be closed in 2021 (as well as the deals already scheduled to close in 2021), the year ahead is shaping up to be potentially as good as 2020. Observable Challenges in Delivering Supply In 2020, there were observable challenges in delivering supply not only to primary European data center markets such as Frankfurt, Amsterdam, or London, but also to secondary markets. In the face of these challenges, we even witnessed demand transfer to other markets because of the lack of supply. This is largely an issue of providers pre-leasing capacity before it has been built due to the desire to remain in key markets. We have also observed development in tier 2 markets like Berlin and Zurich. These areas are not only taking capacity away from primary markets like Frankfurt but are also considered to be add-ons to those two markets. The power availability in some of the top European data center markets appears to be difficult to come by, as does the availability of appropriately priced land assets. This has resulted in developments outside of the traditional development zones. Anticipated Next Markets Another big trend that we’ve seen in the European data center market in 1Q 2021 is a dual strategy utilized by companies not only to lease large amounts of capacity but also to own and build it themselves. There has been an observable amount of anticipation surrounding where the next big markets will be located. In 1Q 2021, there seemed to be large amounts of speculation surrounding appropriate landmasses in tier 2 markets. Additionally, the competition for tier 2 markets seems to be potentially less than it is in tier 1 markets. Overall, the growth of the tier 2 markets has been anticipated. At datacenterHawk, we’re interested to see how the absorption rate of European data center markets in 2021 will impact 2022, as well as whether or not that demand continues or simply levels off for a period of time. Regulatory Environments in the European Data Center Market In some countries within the European data center market, we’ve seen significant growth. In others, however, we have observed a slow down of sorts because of changes made related to power or, perhaps, data sovereignty. From the European perspective, there is a huge push to lessen carbon emissions and reduce the impact on climate change. Overall, the last year has increased the profile for the sector. People have been astoundingly grateful for digital infrastructure and its ability to allow society to push forward in the wake of a pandemic fairly unencumbered. If you would like to dive deeper into 1Q 2021 North American and European data center data, click below to request access to Hawk Insight: https://www.datacenterhawk.com/request?feature=insightMarket&market=1Q21%20Hawk%20Insight