London Remains Largest European Data Centre Market

London continues to boast of having the largest single data centre market in Europe, with total raised floor space in London forecast to increase to 300,000 square metres by 2015.

So says Tariff Consultancy Ltd (TCL) in its new report, “The London Data Centre Market – 2010 to 2015”. It points to London’s ‘interconnected ecosystem’ as one of the main drivers, despite the high cost of real estate within the M25.

New builds continue

Yet the high prices have not deterred new data centre builds within London, such as TelecityGroup, Equinix and Telehouse Europe which are now coming on stream. These facilities, claims Tariff, have helped to meet customer demand but have resulted in some softening of prices.

The report has highlighted other key facts in the London market, namely that London remains the largest single data centre market in Europe and is forecast to have 215,000 square metres of raised floor space by the end of 2010.

Another interesting fact is that the London data centre market accounts for around one half of the total UK carrier neutral data centre market as of the end of 2010.

London Preference

There has been a long standing trend within the data centre industry of “server huggers”, basically IT managers wanting to have their data centre facilities located within an hour’s drive of their office location, but the report has highlighted that the build out of substantial new campus-style data centres outside the London area (such as Ark Continuity’s centre in Wiltshire), means that these facilities which will soon overtake the London market in total space.

Looking ahead to the end of 2015, Tariff Consultancy forecasts that total raised floor space in London will increase to 300,000 square metres “chiefly as the result of development of adjacent sites by existing data centre providers – with the percentage of London space as the UK total to fall to 42 percent of the market at the same date.

Yet data centre space outside of London is predicted by the end of 2015 to rise to 410,000 square metres of raised floor space. Despite this, London will still account for the majority of revenue as a result of higher pricing per square metre.

“The market for London Data Centre space is increasingly being used for specialised applications which are either high density or where customers are prepared to pay a premium for geographical proximity in the London area,” said TCL managing director Margrit Sessions.

Tariff maintains that organisations which depend on network or content connectivity will continue to be attracted to the London data centre as a means of using multiple providers and being part of a wider ecosystem.

Challenges Ahead

However, London will not have things all its way. One of the well known issues within the capital is the availability of appropriate power supplies. This is backed up by Tariff.

“The London Data Centre still faces challenges, the prime one being the shortage of suitable connected space with power and transportation links in the capital, and planning consent for new build facilities is increasingly difficult to obtain,” said Sessions. “This means that new space for wholesale requirements will be limited and will more and more be sourced from outside of the London area.”

Back in May for example, Gartner warned that data centres are set to face a rapid rise in problems associated with power, cooling and space, thanks to the new generation of high-density equipment.

Despite the problem of finding suitable new data centre space inside London, Tariff remains convinced that London will continue to prosper as pricing increases will reflect the cost of new facility builds. It also points out that existing providers in the London area will look to renovate and upgrade their current facilities to obtain premium price levels.

Facilities outside of London will be more more attractive as a wholesale proposition to integrators, service providers, hosting companies and 3rd party resellers, believes Tariff.

This is because they will find single storey space in a campus-style environment at a lower cost per square metre, which does not require high numbers of content or network connectivity.