Data centre pricing has hit its peak, says a researcher, even though they will grow in size and power by 20% in the next five years. There is a geographical inbalance with the UK, Germany, France and the Netherlands accounting for half of all space in Europe - with the top six or seven providers accounting for half of power and space in France, Germany and the UK.
TCL (Tariff Consultancy Ltd) forecasts that " Data Centre space and power in Europe will increase by almost 20% from end 2015 to end of 2020 with the UK being the largest single market in Europe ", with over 150 Data Centre providers present, as shown in TCL’s new Data Centre Europe Pricing – 2015 to 2020 report.
From the report, however, there are signs that Data Centre pricing has reached its limit, with average rack space and square metre pricing forecast to decline by 10% over the 5 year period to the end of 2020. Data Centre providers are reporting increasingly competitive market pricing, which is particularly acute with the introduction of space into a new market area. Customer Power per square metre of Data Centre also appears to have peaked. Data Centre providers such as Interxion and TelecityGroup report that power per square metre has peaked at an average of 1 kW to 1.1 kW, with further power increasing only in line with new Data Centre build-outs.
Out of the 24 European country markets surveyed, four account for half of all raised floor space and total customer power (the UK, Germany, France and the Netherlands) in Europe. These mature Data Centre markets in the UK, Germany and France are increasingly composed of a series of discrete geographical Data Centre clusters, with Data Centre pricing in London, Frankfurt and Paris being markedly higher than in other towns and cities. But more Data Centre space and power is now being developed outside of the main cities, benefiting from lower cost land costs.
Other trends include: Premium Data Centre facilities, which are defined as providing 20 kW bundles of power as standard, are changing to become more “flexible” Data Centre facilities which can provide different data halls with dedicated space, power resilience, SLA, shared use or price points. Telecoms Providers are developing new Data Centre space for cloud and hosting services, with several telecoms operators – such as Colt - now claiming that their facilities are carrier neutral in order to appeal to a wider range of users, which are separate from network users.
New Data Centre space is being expanded in the Nordic countries. New providers are being established in Norway and Sweden, such as Hydro66 and Green Mountain, which are capitalizing on low cost power and green facilities to attract new inward user investment.
Despite the price competition present in France, Germany, Netherlands and the UK, average Data Centre rates remain stable over time, but compared with the continued price commoditization for other telecoms services, Data Centre pricing remains stable as it is buoyed by demand for cloud, hosting & storage applications, the report concludes.