Cloud slingers are leasing larger chunks of third-party colocation facilities as they can’t build their own data centres fast enough in locations they need, and nowhere is this trend more pronounced than Europe.
According to real estate specialist CBRE, in the past quarter 81 per cent of new colo capacity coming on the market in Frankfurt, London, Amsterdam and Paris - also known as the FLAP markets - was procured by hyperscalers.
In the past 12 months, cloud vendors signed contracts for over 100MW of colocation capacity across the four European capitals - CBRE reckons that translates into about $800m in data centre investment.
“The major themes driving the European data centre sector, larger customer requirements, bigger data centre developments and heightened levels of M&A, all continue to be driven off the back of what the cloud providers are doing,” said Mitul Patel, head of EMEA Data Centre Research at CBRE.
“These companies, responsible for 81 per cent of demand in Q1 2019, are tightening their grip on the European colocation sector, shaping entire markets as they go about their business. Companies right across the supply chain are redefining whole business models to serve this one client-base.”
CBRE predicts that these markets will grow by another 21 per cent in 2019, resulting in additional supply of 223MW.
In total, FLAP-serving colocation providers delivered 41MW of new capacity to customers in the first quarter of the year, setting a new record. London remained the largest data centre market in Europe but was growing less rapidly than Frankfurt: the primary hub of the German economy saw take-up of nearly 20MW.
Don't say the B word, but CBRE suggested London had had a relatively quiet Q1 because of its reliance on the cloud providers - which deployed their requirements in the other markets during the quarter.
In March, Synergy Research reported that worldwide revenue from hyperscale customers grew 24 per cent year-on-year in wholesale colocation, and 16 per cent in the retail colocation segment.
In comparison, revenue from telcos, ISPs, hosting and content providers - the customers that drove this industry in the days of yore - grew about 8 per cent in wholesale colo, and 9 per cent in retail. ®