Data Centres Europe REPORT
Published April 2005

Overview
Conducted by BroadGroup over the past four months, the qualitative research methodology with its mix of interviews and questionnaires with data centre providers provides insight into current opportunities and challenges confronting this regenerating sector. The report sets out to define the current state of play, and how this is now changing. At a time when new defining technologies are being introduced and market demand is shifting, data centres in Europe are positioned to undergo significant change over the next two years. The conditions and constraints under which many have been operating over the past few years have decidedly altered, and with many now achieving cash positive results, the new marketing environment is now impacting strategies for product development, investment and growth. Assessing business models and pricing, the report also evaluates the operational context of power, space and other critical factors that impact future development. A unique table identifies who the companies interviewed perceived were their main competitors. Where London has continued to be the main locus for data centre activity, the research for this report suggests new patterns of development will emerge in other geographies, particularly in France, Germany and Spain. New opportunities too will be found in a range of new services now possible through the acquisition of technologies but the report points to the skill sets still outstanding in many player organisations in the crucial areas of marketing and sales, and their importance to the commercial success of these deployments. The report also provides forecasts of overall revenues through to 2007. Invaluable for all operators and suppliers in this sector, the report is very timely coming as it does on the cusp of change.

Report Synopsis
Based on a survey conducted with Data Centre operators and suppliers in Europe, this new report provides a timely strategic assessment of their future business plan and how value can be built. It forecasts that data centre revenues in the countries surveyed (EU 14 plus Czech Republic and Hungary) will reach €745 million by the end of 2007.

The report provides insight into a market that is entering a period of maturity. New and differentiated products and services are shifting the business model away from basic colocation and web hosting.

Growth is being fuelled by a number of factors including a broadening of customer base, the provision of managed services, regulatory requirements in the financial services sector, and new conditions emerging for investment in a market that is, in contrast to the US, sufficiently tight to expand. Business continuity and disaster recovery appeared as major concerns for end users.

The report also identified a key shift towards utility computing. However only a small number of Data Centres had so far invested in blade servers, the technology leap required to open new markets in which Data Centres were previously unable to compete.

London continues to be the main hub in Europe, and where prices continue to rise, but the report identified other cities where Data Centres will increase in scale and capabilities over the next twelve to eighteen months. In the longer term, where Data Centres are short of space, dark fibre links will be used for connection between centres and cities.

What is evident from the research is the degree of complexity that now exists for customer, and services segmentation. Data Centres are confronting new challenges in creating value added and ‘sized’ services for an increasingly diverse customer base. With the majority of Data Centre stock being 4-5 years old, and the introduction of transforming technologies, the industry is facing a further period of change.

Much of the future concern of Data Centres will focus on power, security, infrastructure and connectivity. The main cost pressure affecting companies interviewed is raw electrical power. Carrier neutrality – where the Data Centre is able to offer more than three independent connection routes – is favoured and operators are able to charge premium prices. Space too is a major issue and the report examines the current status across cities in Europe.

The report views managed services as a major opportunity for Data Centres, but suggests competitive rivalry could emerge with integrators, who hold strengths in customer relationships and architectural solutions. InterXion and IBM featured as the two most frequently quoted competitors of other players in the research.

* EU 14 plus Czech Republic and Hungary

Understand the Future of Data Centres in Europe:

• Where is the market headed?
• What are the key market drivers?
• Which issues impact the development of Data Centres in Europe?
• How will investment impact the future of Data Centres?
• How will profitability be sustained?
• What are the forward strategy options that should be considered?
• All analyses are supported by 15 Tables and Charts
• Report is 100pp

Who Should Buy this Report:

All operators, service providers and suppliers engaged in the Wholesale Market

• Data Centre operators
• Colocation and Hosting Companies
• Integrators
• Infrastructure and Connectivity Providers
• Blade Server Suppliers
• Power, Heating and Cooling Suppliers
• Security service providers
• Application service companies
• Regulatory Organisations
• Law Firms
• Consultancies
• Financial and Investment Services Organisations

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