Top International Markets
With businesses expanding globally, the need for colocation space, cloud and data center services are increasing to unprecedented levels. Today’s businesses continue to focus on global scalability and revenue generation through the streamlining workflows and reducing operating IT expenses. With that being said, demand for top international (Tier I) data center markets and colocation space is soaring. In many cases outstripping supply for both retail and wholesale colocation as well as land and facilities for new development projects. As a result prices are rising in markets such as London, Amsterdam, Singapore, Frankfurt, Dublin, Sydney, Santiago, Sao Paulo, Luxembourg and Dubai. These markets are distinguished by their growth rates, adoption levels and stability. It’s all about the economics, business and customer populations, technology adoption levels, and the government’s willingness to invest in infrastructure and tax incentives.
London is the most populous city in the United Kingdom, a leading financial hub and the most important location for international finance. London also ranks first in the world in software, multimedia development and design, and shares first position in technology readiness. It should come as no surprise that London is Europe’s largest data center market with more than seven million square feet of floor space. Demand for wholesale and retail colocation continue to outstrip supply and it’s a very competitive market. Many providers are being pushed to the periphery in areas such as Wiltshire, North Cambridgeshire, Manchester, Newcastle, Slough, and Leeds. Growth is this market can be contributed to ‘business-friendly’ investment and tax breaks. It can also be contributed to London being a major economic and financial hub in Europe.
Amsterdam is the capital city of the Netherlands. Amsterdam Stock Exchange (AEX), part of Euronext, is the world's oldest stock exchange and is one of Europe's largest bourses. The data center market in Amsterdam is driven by connectivity, a favorable business environment and skills. It’s also aided by the city’s focus on energy-efficient datacenter designs, low power usage effectiveness (PUE) and reduced energy use. This alone has attracted many end-user customers. The market is dominated by International hosting providers and a small number of regional giants. Amsterdam’s primary data center market is comprised of retail colocation. Demand for this market is largely driven by US-based service providers and enterprises. However, Asian providers and enterprises will account for a new wave of opportunity in the years ahead.
Singapore is recognized as a leading global city in Southeast Asia. Singapore has four official languages: English, Malay, Mandarin Chinese, and Tamil. Information and communications technologies (ICT) is one of the contributing factors to the nation's economic success. Singapore has been called the most "Tech-Ready Nation" in the world. This is due in part to its market, political and regulatory infrastructure for connectivity. Singapore has the world's highest smartphone penetration rates. The data center market is experiencing large scale growth due to the country’s proximity to China, political stability, and a business-friendly regulatory environment. The technology market in Asia is growing faster than anywhere else, most of the growth occurring in China. Singapore, like Hong Kong, has emerged as a data center and network gateway between key Asian markets and the rest of the world. Singapore has total critical power capacity of 200 MW and total floor space of less than 2 million square feet.
Frankfurt is fifth-largest city in German and a major hub for commerce, culture, education, tourism and web traffic. Frankfurt is also the largest financial centre in continental Europe. It’s home to the European Central Bank, Deutsche Bundesbank, Frankfurt Stock Exchange and several large commercial banks. Germany has the largest and most powerful national economy in Europe making it the continent's economic giant and the fourth largest economy by nominal GDP in the world. Germany’s high internet bandwidth capacity, its low rate of inflation and stable political system contribute to the country’s attractiveness when choosing a data centre location. Germany has Europe’s largest telecom market, with about 115 million subscribers in the mobile market and the second highest number of broadband subscribers in Europe.
Dublin is the largest city and capital of Ireland. It’s considered the fourth-largest European market behind London, Paris, Amsterdam and Frankfurt. Dublin is experiencing a data center boom due to several factors. A few factors include the country’s internet connectivity, with transatlantic fiber-optic cables connecting us to both Europe and the US. It is also geographically, economically and culturally well situated to meet the needs of the IT and internet industry. Cooler temperatures and a focus on green technologies make it attractive from a cooling and operational cost perspective. It also offers political stability and the Government’s pro-business culture provides enterprise with a low-risk and cost effective location. In Dublin, 75% - 95% of colocation demand is from US enterprise. This view is broadly consistent with both colocation providers and industry bodies Corporation tax rates remain at only 12.5% which is significantly lower than most other European countries e.g. Germany 29%.
Sydney is the most populous city in Australia and the state capital of New South Wales. The entire Australian data center market is estimated to grow to $1.36 billion by 2020 at a CAGR of 14 percent a year, according to a report by Frost & Sullivan. The anticipation of growth in Asia-Pacific is attracting a lot of activity from International data center owners and operators as well as enterprise colocation customers. In fact, Australia has become the highest growing colocation market in the world. Top locations within Sydney include sites in Eastern Creek, in Sydney’s west, and Smeaton Grange, near Camden in Sydney’s southwest.
Santiago is the capital of Chile and the country’s largest city. It’s the industrial and financial center of Chile. Many Chilean companies, particular in the areas of banking, telecommunications and retail are all experiencing the growth of the mobile market. This is driving growth and expansion in technology and data center. Almost all providers that offer MTDC services in Chile also offer services higher up the IT stack, including hosting, cloud or IT outsourcing. Entel is the dominant provider in Chile with an estimated market share of 59% in terms of operational datacenter space. Supply and demand for data center stays roughly in balance in Chile, as providers in Chile tend to be conservative and expand in more of a ‘just-in-time’ fashion and are unwilling to invest speculatively.
Sao Paulo is among the most populous cities in the world. It’s Brazil's financial center. However, data center infrastructure in Brazil is still small compared to other countries such as the US. Sao Paulo represents the largest data center market in South America, accounting for 50 percent of capacity in Brazil. Construction and expansion efforts have been largely hampered by heavy taxes and the bureaucracy imposed on companies. In an effort to overcome these hurdles and establish a better infrastructure in the country, the last few years have seen a number of companies build larger operational data centers in Brazil. This data center market represents a forward looking population who are early adopters of new technology and companies that are willing to innovate. Financial institutions, multi-national firms, and e-commerce companies drive the demand here. Barueri, located near the stock exchange, is also emerging as the new data center area.
Luxembourg is a European country bordered by Belgium, France and Germany. Luxembourg City is together with Brussels and Strasbourg one of the three official capitals of the European Union. Luxembourg is a founding member of the European Union, OECD, United Nations, NATO, and Benelux, reflecting its political consensus in favor of economic, political, and military integration. Data centers in Luxembourg provide retail/colocation, managed services, and cloud offerings along with its own fiber optic network that connects several cities and hubs throughout Europe. The leading industries supporting the data center market include entertainment and media, biotech, healthcare and e-commerce. The ICT infrastructure developed in Luxembourg were designed to meet the highest international standards of demanding financial and telecommunications companies. Luxembourg is well situated to provide major access to hubs including Paris, Strasbourg, Frankfurt, Brussels and Amsterdam. Luxembourg has a government that invests in telecommunications infrastructure and takes a pro-business stance with low total tax rates.
Dubai is the most populous city in United Arab Emirates (UAE). It has emerged as an internationally recognized city and the business hub of the Middle East. With revenues once coming from oil, Dubai has shifted into an economy that that thrives based upon transportation, tourism, aviation, real estate and financial services. It is also a leading leader in telecommunications and technology infrastructure. Emirates Integrated Telecommunications Company delivers data center and interconnection services to customers throughout the Middle East. This market is ideal for customers of both companies looking to expand internationally will benefit from close proximity to the United Arab Emirates (UAE) and regional market. Dubai government is pushing through initiatives to develop smart cities and e-commerce within the emirate. Several large colocation providers and technology companies have built new data center facilities in Dubai recently.