Update on UK data centre capacity expansion

  • Zenium Slough data centre

News of continued data centre capacity increases in the UK continues at such a pace I struggle to keep up with them all. There continues to be strong list of new operators, new facilities or further expansion from existing operators. Here is a brief summary.


Hyper-scale cloud has soaked up 40MW in the UK this year

The UK market is on course for a record year in data centre demand. In particular, the market has been given a major boost from the large hyper-scale cloud providers (Amazon/AWS, Microsoft/Azure, Google, Softlayer). My estimates are that these buyers alone have acquired some 40MW of capacity. Much but not all of this business has gone into the London M25 market in locations such as Slough, Hayes, Welwyn and Hemel Hempstead.

But supply has kept pace…

While I admit the demand side is all very exciting, the even more astounding feature is that despite this demand, the market has stepped up to the plate and delivered the necessary level of capacity. In other words, the supply side of the equation seems to remain in very good health. And the continued pace of announcements suggest this will continue into 2017.

However, one point to consider is whether 2017 will beat or even match 2016 overall on the demand side. Will the large hyper-scale buyers really keep on buying or will they have met their short term needs? Will other buyers step up to the market to replace them?

Market in healthy balance

In the Colo-X Q4 2015 newsletter I suggested the market might well have reached a turning point. This was largely due to the closing of the Equinix/Telecity deal removing an important source of market choice and competition. It was also due to Virtus’s well-timed acquisition of the former Infinity Slough data centre on Liverpool Road reducing some of the short-term vendor price pressure on the market.

I concluded that the years 2013-15 probably represented a superb buyers’ market, when buyers really could pick their terms and even relatively small-scale colo buyers were able to access the sort of pricing usually only available to the largest wholesale clients. On the other hand, I also pointed out the supply side continued to be in good health – and as the list below indicates, this looks like it will continue.

For colocation buyers, it pays more than ever to do your research (or let Colo-X help you)

The ever-growing lists of facilities, locations and operators is producing a huge range of price points in the UK market. Anything from £200 per kW per month (e.g. a 4kW rack at £800 per month) or less, to over £1600 per month for the same rack elsewhere. But there are a lot of other costs that are worth taking into account.

For example, the range of cross-connect charges is now enormous, from £0 per month to well over £100. We estimate the costs of four cross-connects and an hour of on-site remote hands can add as much as 25% of monthly colocation costs for small users, or increase network costs by over 50% on a 100Mbs Internet feed.

It pays now more than ever to ensure buyers are selecting the right supplier, facility or operator to meet their needs. And this is something Colo-X are well placed to help with.

Understanding the full picture of a colocation buyer’s needs allows us to piece together the whole solution above and beyond the rackspace or kilowatts required. This might include access to specific cloud platforms and network providers, or the various levels of support that may be needed (from simple trouble shooting to full hardware or software support). With over 17 years’ experience, and with a broad range of industry relationships, we can help source the best solution from both a technical and commercial perspective.

Summary of recent UK colocation capacity announcements

OPERATOR/LOCATION DETAILS TOTAL CAPACITY POSSIBLE
Kao Data Park
Harlow, Herts
Campus will potentially offer four data centres, each offering 8.7MW across four data halls. First facility to open in 2017 36MW of client power, 150,000 sq ft of net tech
Next Generation Data (NGD)
Newport, Wales
Three new halls adding 5MW, 4MW to a large global cloud provider (Colo-X believe to be Azure). 1MW to a bank. Facility still only 40% sold. New capacity online before end of 2016. A new second location under consideration post new investors 350,000 sq ft, 50MW+
4D Data Centres
Crawley, West Sussex
New 400 rack colocation facility, first phase in Q1 2017 400 racks, 10,000 sq ft, 1.6MW
The Point
Greenwich View Place,
Docklands
Speculatively built shell and core scheme for data centre use, adjacent to London Hosting Centre. Can offer 6000 sq m, approx 9MW of IT load, ready (as shell and core) in early 2017 65, 000 sq ft of net tech or 9MW of IT load
Node 4
Wakefield, Yorkshire
Hall 4 of existing site, will bring on a further 150 racks, 350 sq m

 


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