New Research Indicates Widespread Data Center Expansions by European Companies during Next 24 Months

Most European Companies Also Implementing Green Data Center Strategies, Survey Finds

New research data focused on the leading data center trends in the European market indicate widespread data center expansions during the next two years. The release of this data follows the publication of a similar study of the U.S. data center market earlier in 2007. Metrics reported in this new European study are based on a recent poll of IT decision makers at large European corporations in the U.K., Germany, France, The Netherlands, and Ireland. All survey participants are senior-level executives who are either directly involved in or influence significant decisions related to data center operations, the process of managing corporate data centers, implementing new data centers, or expanding existing data centers. The survey was conducted in September 2007 for Digital Realty Trust, Inc., owner and manager of corporate data centers and Internet gateways, by the respected research firm Campos Research & Analysis, the same firm that conducted the earlier study of data-center-related initiatives in the U.S.

The surveyed companies operate in a wide range of industries, including financial services, manufacturing, professional services, packaged consumer goods, telecommunications, consumer services, and information technology. Key findings from the research study and additional data points are provided below:

More than 80 percent of respondents have plans to expand their data centers.
Eight percent plan to expand their data centers in the very near term (within the next 12 months).
Sixty-seven percent plan to expand their data centers within the next 24 months.
Fifteen percent of respondents are in the planning stages for data center expansion that will take place more than 24 months from now.
Of the study participants who are planning data center expansions, 79 percent plan to expand in two or more locations, indicating that these expansions will be complex, multi-site data center initiatives.
The average size of the planned expansions is approximately 1,000 square meters (10,000 square feet).
Disaster recovery initiatives were cited as the leading reason for expansions, but the need for additional network connectivity, upgraded cooling, more raised-floor area, additional power, and new applications were also cited as key drivers for expansion plans.
Respondents identified the following cities as their most preferred locations for their data center expansions (in order of preference):

London.
Paris.
Dublin.
Amsterdam.
New York.

Nearly 60 percent of companies have developed a green strategy for their data centers that will impact their future data center decisions.
Seventy-four percent of companies expect virtualization to reduce their space requirements, but they estimate this reduction to be 20 percent or less.

“Similar to our survey of the U.S. market earlier this year, this study of European data-center initiatives paints a robust picture of the data center market: broad-based demand for data center space from a wide variety of industries, with strong growth prospects based on the project timelines looking out two years and beyond,” says Michael F. Foust, CEO of Digital Realty Trust. “The findings revealed that demand was even stronger than our own estimates; it is remarkable to see that in both Europe and the U.S., more than 80 percent of companies are planning data center expansions.”

“One thing that is very clear from this European study and the earlier U.S. study is that data centers are core to the operating infrastructure for companies today,” Foust adds. “Data centers are no longer simply a closet full of servers that only the IT team worries about; data centers are critical assets that the executive team and board of directors have as one of the key issues on their radar screen.”

“This second phase of our study is important because it puts the data into a global perspective and confirms that the market can expect to see sustained demand for data center space throughout Europe and in the U.S. as companies implement their data center plans,” says Chris Crosby, senior vice president of Digital Realty Trust. “This study also underscored that we are focused on the right markets, with cities like London, Paris, Amsterdam, and New York clearly being locations where European companies want to expand. Each of these markets has limited supplies of quality data-center space, and Digital Realty Trust is well-positioned to serve that growing demand with our portfolio of world-class facilities in each of those markets.”

A number of additional findings from the research study are as follows:

Approximately 17 percent of companies have no redundancy for their electrical and cooling equipment in their current data centers.
Only half of companies have dedicated backups (2N) for their critical electrical systems.
Three quarters of all respondents are planning to expand to data centers with between approximately 500 and 2,500 square meters (5,000-25,000 square feet) of raised floor space.
When study participants were asked to rate the importance of several factors in selecting a geographic location for their data centers, security was ranked as the most important criteria, followed by accessibility for company personnel, telecom availability, and power costs.
Three out of every five respondents plan to use a partner to implement their expansion plans. Only 21 percent are planning to implement the expansion themselves.

Crosby also notes, “One interesting difference between the results of the U.S. and the European studies is the leading reason behind these expansions. In Europe, disaster recovery is far and away the primary reason that companies cited for their expansion plans, while in the U.S., the deployment of new applications was the lead reason. The difference suggests that while demand will be strong in both markets, companies in the EU and the U.S. will be approaching their projects with very different mindsets and data center needs—an important distinction when responding to customers.” He adds, “Another interesting difference is that a smaller percentage of European companies are planning immediate expansions in the next 12 months (17 percent in Europe vs. 34 percent in the U.S.), but the percentages are nearly identical when you look out to 24 months. This confirms our belief that the European market is about 18 months behind the U.S. in its adoption of new facilities.”

Digital Realty Trust, Inc. owns, acquires, develops, redevelops, and manages technology-related real estate. The company is focused on providing “Turn-Key” and “Powered Base Building” data center solutions for domestic and international tenants across a variety of industry verticals ranging from information technology and Internet enterprises to manufacturing and financial services. For additional information, visit www.digitalrealtytrust.com.

New Research Indicates Widespread Data Center Expansions by European Companies during Next 24 Months

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