Artificial Intelligence (AI), Cloud and Internet of Things (IoT) are the main drivers
Amsterdam January 15, 2019 - The European digital infrastructure is on course to at least double in size within 5 years. Ever-increasing digitization and technical developments are fuelling this sharp growth. This is one of the results of the Outlook 2019 report, which will be presented today during the pan-European KickStart Europe conference for 650 guests in RAI Amsterdam. The annual report was initiated by Digital Gateway to Europe and co-produced by research partners PB7 and CBRE.
In the report the key growth indicators for the European data center, cloud and connectivity industries are presented. Developments that drive this growth include Artificial Intelligence (AI), Cloud and Internet of Things (IoT). The number of connected devices, the explosive growth in IP traffic and the ever-growing amount of data are increasing the demand for edge computing, larger data center hubs and hyperscalers. Download the Outlook 2019 report here.
Opportunities and challenges
There are many challenges that need to be addressed to be able to support the demand for digital infrastructure and related services, including data centers. Stijn Grove, director of Digital Gateway to Europe, the organization that promotes the Netherlands as digital hub: "In addition to the pressure on technical requirements such as ever lower latencies, distributed computing (Edge) and stricter security, there are simultaneously major challenges in the areas of legislation, privacy, education & personnel, sustainability and energy. The growth of the industry has consequences for the electricity grid and there is a huge need in the coming years for technical personnel to design, build and run applications, data centers and networks.
Expectations and trends for data centers
ICT research agency Pb7 states in the report that data centers themselves expect to double in several ways within 3 to 5 years. Many expect to double energy consumption and floor space, but also see a necessity for twice as many employees.
In the report, real estate consultancy CBRE calls the outlook for European data centers "extremely strong" this year. Data centers in the FLAP region alone (Frankfurt, London, Amsterdam and Paris) seem to be heading for over 1500 MW of installed capacity this year.
Business trends and Brexit
The report also discusses business trends throughout the digital infrastructure sector. It discusses strategy in times of digital transformation, the influence of geopolitical developments such as Brexit and trade wars on the market, as well as the role of 'cyberwars'.
The uncertainty that Brexit creates has numerous effects. They help the investments in digital infrastructure in the Netherlands, but also reinforce the pressure of digital growth. And especially British suppliers in the construction of data centers should expect less work in EU countries the coming years.
All visitors of the KickStart Europe Conference have received the Outlook 2019 report. The report, with key insights into the data center and digital infrastructure industry, is available online for free via www.kickstartconf.eu/outlookreport2019.
About Digital Gateway to Europe
For over a 1000 years the Netherlands has been the (digital) gateway to the European market. The Digital Gateway to Europe organization promotes the Netherlands as data hub and offers you a source of information to prepare your launch or expansion in the Netherlands with facts, links and events.
We are the official industry and government backed central and nationwide initiative to promote the Netherlands as the Digital Gateway to Europe. Visit www.digitalgateway.eu for more information, reports, events and the latest new regarding the Dutch data hub.
No cause for concern
Although global political developments might cause some concern, Stijn Grove, managing director of Digital Gateway to Europe, points out this is not reflected by market developments. “In a continuously changing world with growing protectionism and an upcoming Brexit, the Netherlands' starting position as a data processing and distribution country is stronger than ever. The current state of affairs regarding the Dutch cloud, data center growth and connectivity demand shows that continuous investments are needed to match increasing demand. We believe that just as in other years, the Dutch Data Hub can shield itself from external factors and continue to be one of the most desired digital distribution points in the world.”
90 percent of operational expenses are spent locally
The Netherlands data center country
The Netherlands is the most connected country in the world and Amsterdam is an important international digital hub. Combined with a reliable and favorable energy network, all of this makes the Netherlands an ideal country for data centers. It explains why we are on our way to becoming the number 1 data hub in Europe. This growth is also noticeable in the Holland above Amsterdam region, where the North Amsterdam data center campus is being created.
Digital Gateway to Europe, in collaboration with research agency Pb7, has carried out research on the economic impact of data centers in the region on behalf of Ontwikkelingsbedrijf NHN, the municipality of Hollands Kroon and Agriport A7. The research shows that data centers produce a major economic spin-off. For direct and indirect employment and infrastructure, these developments put the region on the map nationally and internationally as an attractive business climate.
Investment of € 2 billion
"Our earlier studies have already shown that the economic impact of multi-tenant datacenters in the Netherlands is considerable," says Stijn Grove, director of Digital Gateway to Europe, "In total, Dutch data centers contribute € 941 million to GDP, and companies such as Microsoft and Google have not even been included in these studies yet. "
In the 'North Amsterdam Datacenter Campus' report, the current situation is assessed, and two additional growth scenarios have been developed. An analysis of the status quo shows that a total of € 2 billion is invested by Microsoft in North Amsterdam: to build a datacenter of such size, over a period of 7 years an average of 900 construction workers are busy every day, says the report.
The expectation is that 350 to 400 employees will be required to keep the data center operational afterwards. These jobs will mainly be filled in locally, and contain an interesting mix from catering and cleaning to engineers. If we delve deeper into the operating costs, personnel costs and the investments to run the data center, we see a strong local influence: more than 90% of the costs are spent locally. In addition, there are induced revenues for the region; all these non-Dutch employees will live and eat somewhere during their long stay in the Netherlands, which benefits local services. For example, the Hotel Van der Valk in Hoorn has been occupied for years with people working on the projects in Middenmeer.
90 procent van de operationele uitgaven wordt lokaal uitgegeven
De Amsterdamse datacenter industrie groeit de laatste jaren gemiddeld 18% per jaar, en er wordt dan steeds verder buiten de stadsgrenzen gekeken. Ook Holland boven Amsterdam is inmiddels ontdekt: op het Agriport A7-terrein in Middenmeer, slechts 30 minuten rijden van Amsterdam, heeft naast Microsoft inmiddels ook Google een perceel aangekocht.
In opdracht van de regio becijferde Digital Gateway to Europe de impact van deze Noord-Amsterdam datacenter campus op de Nederlandse economie. En deze impact is groot; de totale investering wordt nu al geschat op €2 miljard.
Vandaag wordt dit rapport gepresenteerd bij het NHNext event van de regio Noord-Holland Noord. Download het rapport hier - de Engelse & Nederlandse versie.
The report reflects the growth and developments that have taken place in the data center sector over the past 12 months. The 198 multi-tenant data centers have a gross surface area of 546,000 m2 of which 308,000 m2 is net data floor. The power capacity of the single and multi-tenant data centers is estimated at around 1350 MW. Stijn Grove, Director of the Dutch Data Center Association, said: “We were not surprised to see that the industry also grew strongly in 2017. And the prospects for the entire industry are still excellent due to the ongoing digitization.”
The report is freely accessible for download here
By the industry, for the industry
"Only by collaborating we can prepare for the extensive growth in demand for data", says Stijn Grove, Chairman of KickStart Europe. "It is the only way in which the cloud, connectivity and data center industry is able to continue servicing the economy." To help the industry to work together, KickStart Europe was launched to kick-off the year 2018. Around 300 C-level executives, coming from 15 different countries, the industry came together to discuss future trends and investments in technology and digital infrastructure.
The Outlook 2018 report goes further where the event ended; what does the industry have to know about what is heading our way, and how can we as the industry prepare?
Growth, Growth & Growth
One thing we can expect for the future is growth. In relative numbers, such as 155% growth in XaaS spending in 2022, but most definitely in absolute numbers. Mobile data traffic in Europe is expected to grow to over 5700 PB per month in 2022. On a global scale, the revenue of AI will go towards $24 bln in 2022, compared to the $2,1 bln that was generated for AI in 2017.
According to IDC, the amount of zetabytes created on an annual basis will grow with almost 300% over the next five years. Mobile data creation is even growing faster, with video being the main driver. So there is a lot coming our way.
Download the 2018 Outlook report
The 2018 Outlook report by KickStart Europe is available for download here.
For more information on the KickStart Europe summit, please consult www.kickstartconf.eu or follow us on Twitter @KickStartEur.
The KickStart Europe Summit Conference is an initiative by Digital Gateway to Europe events.
Digital Gateway to Europe is the organisation promoting the data center industry in Europe. We organise events, trade missions, trade shows, launchpads and other meetups to share information about the digital infrastructure and data hub. Scale-ups, start-ups and enterprises who would like more in-depth information can consult our Digital Gateway to Europe knowledge database.
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