Why London Cannot Continue As The Hub Of The Data Centre Marketplace

Over the past few years there has been much talk of Britain’s CIOs rethinking their data centre location strategies and heading for the hills well away from the increasingly space and power-strapped London and South East.

The tale of a Promised Land offering much lower costs, access to plentiful and resilient power, high speed fibre connections and less exposure to terror threat is well-known. The big problem is that it has remained exactly that – a land full of promises – leaving many London-bound CIOs to ponder “Where can I move to today that’s any better?”

For all the talk and hype about new out-of-town builds, most have yet to make it any further than the planning stages. Little wonder therefore that most of the clamor to reject London as the epicentre of the data centre market in favour of more remote locations would appear to have fallen on deaf ears.

In defence of the ‘Londonites’, until the last year or so, there has simply been insufficient ready-to-go stock for CIOs to seriously consider and go out and see in terms of well out-of-town facilities capable of supporting the multifarious data centre requirements of the modern enterprise organisation, hosting provider or carrier.

Unless one can actually see and touch the proposed out-of-town facility and receive cast-iron guarantees on available space and the cost savings to be had, as well as SLAs on more plentiful and resilient power supply, low cost remote diagnostics to keep the server huggers happy, a wide choice of on-site high-speed low latency fibre interconnects, plus demonstrable top-notch physical security, why would anyone take the risk of moving from their London area sites? After all, it’s always been the place to be.

However, once such remote-sited lower cost all singing all dancing alternative facilities are seen to be available – and they are now coming through – the data centre location dilemma miraculously goes away in most cases, except for a very small minority of traders who just have to be within thirty odd miles of London for reasons of nano-second latency. The majority of CIOs now recognise for the long-term health of their businesses and wealth of corporate shareholders they must get out of town rather than sticking within the M25 when expanding or consolidating their data centre estates.

The latest Jones Lang LaSalle Data Centre Barometer1 (May 2010) is yet another indicator showing the penny has already dropped for most concerned. More than 70 per cent of corporates in Europe now agree that location of data centres over 200 km away from existing facilities is acceptable provided there is at least a 20 per cent reduction in operational costs on the table. This is a big shift in opinion over the previous quarter’s survey where it was still around half and half.

In many parts of the world and especially in North America, large-scale data centre migration to out-of-town locations has already occurred and is widely accepted as being best practice. In the UK, city centre sites are exhausted, power is capped, choices are constrained and costs are high. As larger and higher calibre modern facilities become available well away from London, it is only a matter of time before CFOs and shareholders of UK-based companies start to insist upon less risky and more cost-effective corporate data centre location strategies.

Twenty years of conventional wisdom, dictating London is data centre central for reasons of latency, sheer convenience and no other alternative, is finally past its sell by date. London cannot continue as the hub of the data centre marketplace. It’s time to get right out of town.

SHARETweet about this on TwitterShare on LinkedInShare on FacebookShare on Google+Pin on PinterestDigg thisShare on RedditShare on TumblrShare on StumbleUponEmail this to someone

Simon Taylor is Chairman at Next Generation Data. Simon has an outstanding track record in developing products both in the corporate world during his early career with Toshiba Information Systems and Cable & Wireless, and in the last decade as an entrepreneur and investor. In 1995 he founded Interoute Products, part of Interoute Telecoms (later re-named Telecom FM), which developed telecom routers and soft switch products, and gained substantial market share throughout Europe within the first 5 years. Simon is a founder of NQuire and Group Chairman and founder of Saiph Group which focuses on IP telephony and convergence and has major customers in both the public and private sectors.