Brexit Concerns Haven’t Stopped UK Data Center Growth
England’s exit from the European Union raised concerns that companies would shift their data elsewhere, but so far those worries haven’t panned out.
A number of major firms and industry leaders said they’ve seen steady growth since 2016, when the Brexit referendum was first approved by UK voters, according to a report from Bloomberg.
The UK data center industry added 145 megawatts of capacity in 2019, marking a record domestic expansion. London’s data center market is expected to add 67 additional megawatts of capacity by the end of this year, and had a total capacity of 711 MW in the second quarter of 2020, according to CBRE.
Movement of data in England generates £174B, equivalent to about $216B, of value per year, according to the Confederation of British Industry. Last year, however, the departure of a major gambling platform, GVC Holdings, from the UK sparked concerns that other firms would shift their data operations outside of the country to avoid cross-border transfers of personal data.
John Dinsdale, chief analyst at Synergy Research Group, told Bloomberg that over the next five years “the number of operational hyperscale data centers in Europe will grow at eight to 10% per year, and we expect U.K. growth to be in the same range.”
Growing usage of cloud applications and services has kept the industry buoyant in the UK, and recent research suggests that there’s still a lot of pent-up demand from enterprises that still house their data on-site. About 60% of UK enterprise workloads are still housed on premises, including many private, internally managed data centers.
The COVID-19 pandemic has helped to push more of those enterprises into the growing UK colocation market, according to a recent survey done by Information Services Group.
“In an effort to save valuable time, money and space, many large enterprises will look to move in-house IT operations to managed colocation facilities or sell their data centers and lease the space they need to operate,” said Barry Matthews, partner at ISG North Europe.