The digitisation of our personal and professional worlds continues at pace, and as our enthusiasm for big data, cloud computing, and digital services and products continues to grow, data centres are being asked to do more, which creates the need for greater bandwidth, computing power, and live and offline storage.
As such, the demand for new datacentres (hyper scale and edge) is unlikely to diminish any time soon, with a strong pipeline developing in the short to medium term to 2022.
Europe continues to be a key destination, with nearly two thirds of global datacentre clients considering locations across the continent.
Political stability, robust and transparent legislation, climates that offer the benefit of free cooling for large parts of the year, and issues surrounding data sovereignty and latency are key drivers.
Factor in growing and resilient international fibre links, that now go through and around the traditional FLAP (Frankfurt, London, Amsterdam and Paris) market, along with access to increasing renewable energy supplies, and the direction of travel for this market across northern Europe and the Nordics in particular is clear.
While the data centre construction market looks attractive and robust, we are seeing an increasing number of mergers and acquisitions in the sector, so the number of key clients is diminishing.
Keys to success
The sector requires strong engineering construction credentials, while each project represents challenges that are standard for contractors working across any critical environment. The levels of technical excellence required are significant and there is really no substitute for experience in this market.
Top tier contractors need a strong design capability and expertise building and fully integrating M&E and IT activities seamlessly, becoming an extension of the professional services team. There is a global drive for data centre standardisation, so successful contractors must demonstrate global delivery consistency through robust and international supply chains.
In the UK the market remains buoyant, with opportunities in the co-location space and a trend for smaller datacentres within the research and higher education space.
“Modularisation is an increasing element of all data centre projects and we have delivered a number of solutions this year that have been operational just six weeks from commencement on site”
As a mature market, we now have data centres first commissioned at the turn of the century in need of refurbishment and upgrade.
Live environment and critical engineering expertise are pre-requisites for contractors in this segment. Modularisation is an increasing element of all data centre projects and we have delivered a number of solutions this year that have been operational just six weeks from commencement on site.
Moving into 2017 we’re seeing how a mature data centre construction market may look in the medium to longer term after the exponential hyper-scale growth seen in the last five years.
There are a number of significant hyper-scale projects already on site, a pipeline of several more in planning across Europe, with edge and co-location schemes coming forward with shorter project gestation periods - moving quickly to fill demand for large cloud computing clients in an agile model that has proved to work well.
There is certainly demand here, but the barriers to entry can be prohibitive.
Damian Farr is managing director of ISG’s engineering services division in Europe