Bernard Geoghegan, vice president EMEA at Digital Realty, discusses the company’s recent deals and strategy.
July and August have been busy months for Digital Realty (DLR) in the Netherlands. The data centre developer, which owns 127 data centres worldwide, bought a 5.3 acre site to build an 11.5M megawatt data centre at De President in Amsterdam. Added to this is a long-term partnership with Dutch telecom provider KPN to build a data centre in Groningen and a partnering agreement with Epsilon to provide a bandwidth solution for cloud and content providers.
Why did you decide to work with KPN and how will you work together on this project?
They’ve been providing quality services for a good number of years so we’re only too delighted to be associated with KPN. What we’re looking to do in this case is to establish a partnership where we can bring a level of expertise and funding that allows KPN to concentrate on the services that they want to deliver.
You recently bought land to build a data centre at De President in The Netherlands. What kind of investment are you making in this?
We have gone and done a speculative investment in The Netherlands. We have acquired land and will build a facility in De President. More than likely that will become a multi customer facility, where we will have a number of customers in that facility. We also have a number of facilities already there, this would also be one where we can tap into the existing customer but also attract new customers.
The highest operating expense in a data centre is supposedly power. How will you keep costs down?
It’s down to the design, things like utilising air side economisation where we try and use the outside air to help regulate the internal temperature of the data centre. Amsterdam is really a good location for doing that and what’s also interesting about the region is the local authority has insisted for new data centres built there to be highly efficient. In fact, there is a metric, called PUE (Power Usage Effectiveness), and we tend to be around the 1.1 factor, the most efficient for multi customers data centres.
Do you have any idea how much it will cost altogether?
We would expect to have a €100m investment over time. Within that, we have an architecture, called Pod Architecture, which is a turnkey data centre and we begin to build that building in terms of Pods. So at the moment, we’ve mastered planned that for six Pods. Each of them being about 2MW in power.
How strong is the Netherlands as a market and where will your potential customers come from?
The Netherlands is a connectivity hub for transatlantic and transcontinental networks, so it’s a good location for companies with network heavy applications. Other markets we’re in are driven by a different criteria network. Our London market is dominated by financial institutions, our Irish market targeted at multi-nationals that are supported by the inward investment agency, while Paris is primarily driven by French companies.
What do you think about reports suggesting that there’s an over supply of data centres?
But we very carefully manage how we implement our spend. We do an initial level of investment on the land, the power and the shell that’s probably around 20% of the total investment. The remaining 80% is done with the electrical and mechanical equipment that goes into the data centre. Therefore, we still see a steady growth across our markets.
Where do you think the market is going for wholesale data centre space?
Although there has been an economic downturn, a lot of things are being driven by the mobile media, devices and applications as well as migration into and adoption of far more cloud services. We still see analytics and big data playing a big part but there’s still a significant amount of data that needs to be stored before you run those analytics. There’s also added regulations on the length of time you’ve got to keep data available. All of those at the moment are feeding into requirement for data centres. On the back of that, If you’re a retail operator, it isn’t any easier, in fact it’s probably harder to create funding and open up a new retail data centre space.
Can we expect any other customer news from you in the near future?
There’s a new London customer deal announcement coming for 2.4MW of data centre capacity. It is a dual site deal for us so this is where a customer is buying from us in two locations and using the Epsilon and BTI connectivity to connect those two sites.