European Cloud Demand drives Data Centre expansion but Brexit causing investor uncertainty Tuesday 9 August 2016 PDF Print London – 9th August 2016 - The latest Colocation Market Quarterly (CMQ) from BroadGroup Consulting shows strong demand for data centre space in the four Tier 1 European locations during the second quarter of 2016. Paris has performed particularly strongly, and has even demonstrated a slight increase in price. Demand has been particularly driven by cloud but otherwise the 2Q has been dominated by hyperscale players, and their need to quickly ramp up a European presence. However, BroadGroup is also seeing smaller cloud players actively seeking colocation space. Recent work undertaken by the firm in Germany also highlighted the absolute requirement of German corporates to be able to access cloud services from German-based data centres. Research for the quarterly report revealed uncertainty about the remainder of the year, and particularly the impact of Brexit. In the short term following Brexit, data centre providers typically found that existing UK plans were still ‘on track’. BroadGroup Consulting analysis in economic downturns has shown that the colocation market has often proven to be highly resilient. Furthermore, the long-term nature of many data centre location considerations, and broad range of location factors, means that many data centre users look beyond any short-term changes. Of course, the UK also remains a market of ~65 million people, a leading financial global hub, and relatively a strongly performing economy. However, more recent research has suggested the investor concerns appear focused on three phases of Brexit: • One, the initial uncertainty found currently. Although a new government has formed in the UK, with a new Prime Minister, the future of the UK relationship with the EU is far from clear. • Two, the first clear indications of future UK positioning. This ‘may’ become more apparent within the next 3-6 months, although in part it will also be dependent on issues outside the control of the UK government, such as EU negotiators. • Three, the long-term implications. These may not be clear for several years, with Brexit negotiations, still not officially started, supposedly due to complete within two years, but clearly with the potential to take longer. Commenting on what this means for data centre investors, Steve Wallage, managing director of BroadGroup Consulting points to Asian investors being particularly cautious about the UK, reflected in commercial property markets. “BroadGroup is aware of three planned UK data centre investments by Asian companies, which are now unlikely to happen,” said Wallage. “Given the uncertainty, UK data centres could be perceived by some investors as only relevant for local demand, a change from London long being considered a hub for European HQ and data centres, initial entry into Europe, and regional consolidation. For example, some of the hyperscale cloud players are now positioning UK data centres in this way.” Wallage also identified broader concerns he is hearing ranging from GDPR (data protection) to movement of people (bringing staff into data centres) to availability and cost of power. For those investors looking at European alternatives outside the UK - which remains the largest data centre market in Europe - there are many options and eager investment agencies. While Dublin and Amsterdam are potential choices, the Nordics, Luxembourg and Frankfurt, are all looking to compete for this business. However, the UK government has yet to reveal plans on possible corporation tax changes, which could strongly influence investor decisions. To subscribe to CMQ please visit http://www.broad-group.com/reports/cmq About BroadGroup BroadGroup is an Information Media Technology and Professional Services company. Established in 2002, BroadGroup achieved rapid recognition and growth through delivering quality research and insight in a number of niche and emerging areas of the telecommunications and technology sector. Since founding, the Datacentre and Cloud practice has been the main focus of the company. BroadGroup has now become the leading international research and consulting group in this area, through three business lines: consulting, market reports and events. http://www.broad-group.com/ Enquiries: email@example.com This press release was distributed by ResponseSource Press Release Wire on behalf of BroadGroup in the following categories: Business & Finance, Manufacturing, Engineering & Energy, Computing & Telecoms, for more information visit http://pressreleasewire.responsesource.com/about.