Exclusive: CyrusOne’s Europe data centre strategy laid bare
CyrusOne is a US-based real estate investment trust (REIT) that recently initiated an aggressive expansion into Europe.
The company made its first foray into Europe with its acquisition of Zenium in August, followed by the announcement of new data centres to be built in the UK and Germany. And then this week, the company shared news of a huge hyperscale data centre campus to be built in the Netherlands.
We were able to sit down with CyrusOne Europe managing director Matt Pullen to get a glimpse at the company’s strategy for the region moving forward.
“The acquisition of Zenium gave us a healthy footprint in Europe. That’s a great start, but it really is only the beginning. We’ve committed to building two new data centres in Slough, which will add a further 36 MW to our footprint in the UK,” says Pullen.
“We also have development sites in process across Dublin, Frankfurt and Amsterdam that, when combined with Zenium, will result in a total prospective European footprint of nearly 250 MW by 2020.”
Given the bustling data centre market in Europe with new builds being announced seemingly every week, I asked Pullen what makes the company so confident there’s room for a new entrant.
“The data centre market in Europe appears huge at first glance, but when you drill down into the numbers, it quickly becomes apparent how small it really is compared to the potential. Just look at London – there’s approximately 260 million square feet of office space in central London. Typically, around 5 percent of that office footprint is taken up by servers and IT infrastructure. So that’s 13 million square feet of data center space which will move to the cloud,” says Pullen.
“When you consider that the London data centre market currently occupies just 500,000 square feet, you start to appreciate why there’s room in the market for a new entrant that can build data centres very quickly.”
Pullen says that what they’re seeing right now is a race to scale.
“The cloud companies are all facing challenges trying to forecast customer demand and in turn their requirements,” says Pullen.
“They want to put network rows in and then scale within a single facility. They don’t want fragmented data centres. That means working with partners with the heft to build data centres to accommodate that demand. The overall trend we’re seeing is towards larger data centres.”
While Pullen does acknowledge the term ‘digital transformation’ has become quite cliché, the reality is we’re still at the very beginning of an absolutely fundamental shift in how businesses consume IT resources.
“Businesses look to the cloud to empower their transformations in the digital age, and data centres have become the 21st century’s most important infrastructure. Amazon’s cloud business is growing at incredible speed, as is Microsoft’s and other larger cloud providers. The data centre market is racing just to keep pace with them,” says Pullen.
“There is no economic, strategic, or operational reason why any cloud company should continue to build and manage their own data centres. Investors are not interested in tying up their capital in very expensive real estate assets when they can invest in so many disruptive technologies that will generate considerably higher returns.”
Another very popular cliché of the current times is Brexit, and given CyrusOne has set up bases in the UK, I asked Pullen if it’s a concern moving forward.
“Given the recent coverage of negotiations over Brexit, it would be a brave person who would attempt to predict the eventual outcome of Britain’s negotiations to exit the European Union. Whatever that outcome is however, we do not see Brexit as a major threat to the upward trajectory of demand for data centre capacity across our main territories in Europe,” says Pullen.
“First of all, there’s a simple matter of geography. The London data centre market is and always will be a major network hub for international data traffic. The same can be said for Frankfurt which sits right at the very centre of Europe,” says Pullen.
His second point is based around the simple law of necessity.
“Then you have the wider trend towards digitalisation and the move to the cloud. Brexit or no Brexit, the genie is out of the bottle. The ground-shifting tech trends that are reshaping our world flow through our data centres,” says Pullen.
“IoT, AI, Machine Learning, those all require tremendous computing power. Just look at how much data a single autonomous car generates, and you understand why Brexit is unlikely to be more than a blip in an otherwise exponential rise in demand for data centre capacity.”
To wrap it up I pulled out yet another cliché for Pullen – sustainability.
“Ultimately it is in our best interests to be as efficient as possible in our usage of electricity, since we can then pass any savings across to our customers. One of the areas we’ve been looking at is water efficiency. Traditional data centre cooling methods utilised by nearly all operators require tens of millions of gallons per year in water for a single major data centre,” says Pullen.
“Water conservation has been a significant factor in how we design and build new data centres. Our hyperscale, purpose-built data centres use an air-cooled chiller technology with an integrated compressor and condenser that cool the closed loop of water. Filling the pipe with water just a single time is the only water consumption. The chilled water loop for a 4.5 MW data centre is filled once with less than 8,000 gallons, meaning the permanent water supply can be provided by a single tanker truck.”