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There's more to Europe than FLAP

16 April 2020
They may have dominated the market for years, but they are not the only locations to be considered.
There's more to Europe than FLAP

For many, FLAP (Frankfurt, London, Amsterdam and Paris) is a useful shorthand for the European data center market. They are the biggest, and have dominated the market for years, but they are not the only locations to be considered. Property investment consultancy, CBRE says “We use the four largest markets in Europe: Frankfurt, London, Amsterdam and Paris (FLAP Markets) to represent the European colocation market.” Not only does this underestimate the overall size and growth-rate of European data center capacity, but it focuses attention on markets which are usually expensive, less sustainable and may not represent the best solution for those looking for space in Europe.

Reports of CBRE’s most recent research  (Q4 2019) stated “The European data centre market is on track to report 200MW (megawatts) of take-up in 2019 – the highest recorded level of annual activity to-date”  – yet this is just the figure for the four FLAP markets. It significantly under-reports the overall European market which is seeing growth in numerous markets outside of FLAP. Research from other groups paints a picture of a vibrant, high-growth market for data centers outside of these increasingly constrained markets.

For example, Broad Group, although using different measures, points to huge growth in the Nordic market “Spend on colocation expansion over the next year alone will reach around Euros 800m. Hyperscale investment is forecast conservatively to reach more than Euros 1 billion.” Hyperscalers alone are thought to be planning over 900MW of new capacity in the region in the next three years and at DigiPlex we are already working on two additional sites adding 8,500 m2 of space to house high-density servers with another 40,000 m2 acquired and ready to build.

COWI Research, commissioned by The Nordic Council of Ministers predicts investment in Nordic data centers to reach EUR 4.3 billion and the construction of sites capable of hosting an additional 580 MW of capacity per year by 2025.

Turner and Townsend another real-estate consultancy, highlights Madrid, Zurich and Warsaw alongside Stockholm, Copenhagen and Oslo as areas seeing significant growth in data center building. And according to Wintergreen Research, the Nordic market for third-party data center operators is expected to increase by two and a half times in space and triple in terms of MW power requirements. Research and Markets predicts 7% annual growth for this market.

So, the false elision of FLAP with European markets is both unrepresentative and damaging. There are many options for international businesses and hyperscalers looking to expand across Europe. Those looking for cost effective, sustainable facilities which benefit from fast and high capacity connectivity to the main population’s centres across Europe, are not well served by restricting their searches to FLAP markets.

Our latest white paper outlines the key advantages of Nordic markets over FLAP markets as: Speed to market; access to a large and stable supply of low-cost, green energy; high-speed connectivity across Europe and globally; availability of land at reasonable cost; experienced workforce; low taxation and an easy place to do business. Any business looking for cost effective ways to locate and manage IT resources to serve European populations should not fall into the trap of seeing the narrow perspective of FLAP as representing the full opportunities for colocation in Europe.

Article written by Tim Bawtree, VP International & Hyperscale Sales

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