German Data Centres: Market Report
October 2011
Report researched by BroadGroup
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INTRODUCTION AND ACKNOWLEDGEMENTS
The focus of BroadGroup’s report is the market development of third party data centre co-‐location and hosted services in Germany and factors influencing the potential for investment in the German data centre market in the next five years. The report brings together a comprehensive range of industry understanding gathered from in-‐depth discussions with key players and experts in the German data centre market, plus substantial desk research.
The report evaluates
• Germany as a market for investment in data centres
• The context for doing business in Germany
• Customer behaviour and attitudes to using third party services
• Business and technology drivers for change
• Regulatory issues affecting data centres
• Power availability and pricing issues
• Renewable energy and carbon reduction issues
• Regional characteristics of the German data centre market
• The range and location of data centres
• Leading players of third party data centre services • Existing market size and future projections for growth
Research interviews for this report took place between December 2010 and early September 2011. BroadGroup would like to thank the many individuals who contributed to our research programme and for their generous response with time. In particular, we wish to thank the following organisations:
Attenda GmbH, BNP Parisbas Real Estate, BT Germany, COLT, DE-‐CIX Competence Center, Equinix, e-‐shelter, Eurocloud Deutschland, EvoSwitch, Global Switch, Grass Consulting, InterXion, I.T.E.N.O.S, M+W Zander, NetCologne, Noris Networks, Oppenhoff & Partner, SAP, TeleCity, TeliaSonera
International and T-‐Systems.
Also special thanks to eco -‐ Verband der deutschen Internetwirtschaft e.V.
In mid-‐2011, BroadGroup also conducted a short online survey in German amongst third party data centre operators. Respondents ranged from wholesale data centres to small ISPs offering co-‐ location in markets across Germany. They represent a wide range of business models. The findings demonstrate overall market direction and are referenced in the report as well as being included as one document in the Appendices.
TABLE OF CONTENTS
Executive summary ...
Definitions ...
Section 1 German data centre market and demand drivers ... 1.1 Market drivers ... 1.2 User drivers and inhibitors of demand ... 1.3 Vertical market issues ... 1.4 Enterprise customers ... 1.5 ‘Mittelstand’ companies ... 1.6 Eco systems and channels to market ... 1.7 Uptake of new technologies ... 1.7.1 Higher density racks ... 1.7.2 Innovative cooling ... 1.7.3 Virtualisation ... 1.7.4 Cloud computing ... 1.8 Legal and regulatory framework ... Federal ... Länder ... 1.8.1 Data protection ... 1.9 Power availability and pricing ... 1.10 Environment and renewable energy ... 1.11 Growth in IP traffic ...
Section 2 Choosing data centre locations ... 2.1 Regional characteristics of the German data centre market ... 2.2 Pricing issues ... 2.2.1 Land and facilities ...
2.2.2 Inward investment ... 2.2.3 Racks and power ... 2.3 Power issues ... 2.4 Connectivity ... 2.4.1 Internet Exchanges in Germany ... 2.5 Reliability ... 2.5.1 Corporate criteria ... 2.5.2 Location factors by vertical ... 3. Key cities for data centres ... 3.1 Berlin ... 3.1.1 Overview of players ... 3.1.2 Internet exchanges ... 3.1.3 Future outlook ... 3.2 Düsseldorf ... 3.2.1 Overview of players ... 3.2.2 Internet exchange ... 3.2.3 Future outlook ... 3.3 Frankfurt ... 3.3.1 Overview of players ... 3.3.2 Internet exchanges ... 3.3.3 Future outlook ... 3.4 Hamburg ... 3.4.1 Overview of players ... 3.4.2 Internet exchanges ... 3.4.3 Future outlook ... 3.5 Munich ...
3.5.1 Overview of players ... 3.5.2 Internet exchanges ... 3.5.3 Future outlook ... 3.6 Nürnberg ... 3.6.1 Overview of players ... 3.6.2 Internet exchange ... 3.6.3 Future outlook ... 3.7 Stuttgart ... 3.7.1 Overview of players ... 3.7.2 Future Outlook ... 3.8 Other locations ... 3.8.1 Overview of players ... 3.8.2 Internet Exchanges ... 3.8.3 Future outlook ... 3.9 Summary ...
Section 4 Key players ... 4.1 Equinix ... 4.1.1 Overview ... 4.1.2 Build strategy ... 4.1.3 BroadGroup analysis ... 4.2 e-‐shelter ... 4.2.1 Overview ... 4.2.2 Future build strategy ... 4.2.3 BroadGroup analysis ... 4.3 Global Switch ... 4.3.1 Overview ...
4.3.2 Future build strategy ... 4.3.3 BroadGroup analysis ... 4.4 InterXion ... 4.4.1 Overview ... 4.4.2 Future build strategy ... 4.4.3 BroadGroup analysis ... 4.5 I.T.E.N.O.S (Deutsche Telekom) ... 4.5.1 Overview ... 4.5.2 Future build strategy ... 4.5.3 BroadGroup analysis ... 4.6 TelecityGroup ... 4.6.1 Overview ... 4.6.2 Future build strategy ... 4.6.3 BroadGroup analysis ...
Section 5 Other players ... 5.1 Co-‐location ... 5.1.1 Overview and outlook ... Ancotel ... Databurg ... New Colo ... 5.2 ISPs and players with regional or national focus ... 5.2.1 Overview ... 5.2.2 Future outlook ... 5.3 Telcos and pan-‐European network operators ... 5.3.1 Overview ... 5.3.2 Future outlook ...
5.3.3 BroadGroup analysis ... 5.4 Systems Integrators ... 5.4.1 Overview ... 5.4.2 Future outlook ... 5.5 Managed services ... 5.6 New entrants ... 5.6.1 Overview ... 5.6.2 Future outlook ... 6.1 Overview ... 6.1.1 Demand ... 6.1.2 Supply and market segments ... 6.1.3 Impact of obsolescence ... 6.2. Space and utilisation ... 6.2.1 Space ... 6.2.2 Utilisation ... 6.3 Revenues ...
Section 7 Appendices ... 7.1 Federal Data Protection Act (BDSG) Annex to Section 9 ... 7.2 Reference sources ... 7.3 German online survey 2011 ...
130 pages
List of Figures and Tables
Figure 1.1 German data centres by gross space m² encompassed by BroadGroup’s research Figure 1.2 Top drivers of customer demand today – as seen by data centre operators Figure 1.3 Top user concerns in using third party data centres
Figure 1.4 Top inhibitors of customer demand as seen by third party service providers Figure 1.5 Average rack density in data centres today and in 3 years’ time
Figure 1.6 Map of the 16 States that comprise the Federal Republic of Germany Figure 1.7 Power as a percentage of total operating costs
Figure 1.8 Anticipated increases in power usage in 3 years’ time Figure 1.9 DE-‐CIX annual traffic statistics
Figure 1.10 BCIX Berlin annual traffic statistics
Figure 1.11 ECIX Combined traffic for Düsseldorf, Berlin and Hamburg – annual traffic statistics
Table 1.1 Number and type of data centres in Germany Table 1.2 Examples of IT load by data centre segment
Table 1.3 German states, area size, population and capital cities
Table 1.4 European Data Protection Law and its application in Germany Table 1.5 Industrial electricity pricing across Europe in 2011
Table 1.6 Policies to promote Renewable Energy Sources in Germany
Figure 2.1 Main cities in Germany
Figure 2.2 Regional power developments (planned or in build) of 20 MW or more Figure 2.3 Map of ECIX locations
Table 2.1 Factors behind price averaging Table 2.2 Internet Exchanges in Germany Table 2.3 Location factors by vertical sector
Table 3.1 Key third party data centres in Berlin Table 3.2 Key third party data centres in Düsseldorf Table 3.3 Key third party data centres in Frankfurt Table 3.4 DE-‐CIX enabled data centre sites in Frankfurt Table 3.5 Planned new builds or extensions in Frankfurt/area Table 3.6 Key third party data centres in Hamburg
Table 3.7 Key third party data centres in Munich Table 3.8 Key third party data centres in Nürnberg Table 3.9 Key third party data centres in Stuttgart
Table 3.10 Examples of key third party data centres outside the main 8 cities Table 3.11 Summary comparison of city business focus in the main 8 cities
Figure 3.1 Comparison of cities by number of co-‐location data centres Figure 3.2 Growth potential for locations outside Frankfurt
Table 4.1 Equinix data centres by gross m²
Table 4.3 e-‐shelter data centres by gross m² Table 4.4 e-‐shelter SWOT Analysis
Table 4.5 Global Switch data centres by gross m² Table 4.6 Global Switch SWOT Analysis
Table 4.7 InterXion data centres by gross m² Table 4.8 InterXion SWOT Analysis
Table 4.9 I.T.E.N.O.S data centres by gross m² Table 4.10 I.T.E.N.O.S SWOT Analysis
Table 4.11 TeleCity data centres by customer space m² 2010 Table 4.12 TeleCity SWOT Analysis
Table 5.1 Selected ISP/network operators with regional or national focus Table 5.2 Key telcos and pan-‐European carriers in Germany
Table 5.3 Telco SWOT analysis
Figure 5.1 Noris Network
Figure 5.2 Pironet NDH backbone network Figure 5.3 LambdaNet data centres in Germany
Table 6.1 Third party data centre market segments forecast 2011 – 2015 Table 6.2 Usage of third party versus in-‐house data centre space 2011 -‐ 2015
Figure 6.1 Third party data centre space – anticipated growth next 3 years Figure 6.2 German gross m² data centre space by market segment
Figure 6.3 Examples of utilization levels in third party data centres in 2011 Figure 6.4 Summary of forces shaping future third party data centre demand Figure 6.5 German third party data centre revenues in € million 2011 -‐ 2015
REPORT EXTRACTS
Executive summary
BroadGroup’s report looks at the issues affecting the German data centre market demand and supply. It examines the national market from a variety of angles, including customer attitudes to using third party data centre services, environmental, regulatory and business issues impacting development and growth in IP traffic – all factors underlying market change. It also examines regional influences on data centre location which are distinguishing characteristics of the German market.
The broader question is whether the demand will be in-‐house or outsourced. Some of the drivers for outsourcing or out-‐tasking (a preferred term in the German market) discussed in the report include:
• Economic climate – leading to ‘make or buy’ decisions and growing willingness to out-‐task
• Growing compliance requirements leading to greater storage requirements and leading to the use of off-‐site locations
• Improving risk management by using diverse locations for business data or establishing ‘second’, back up locations
• Compensating for lack of data centre skills in a fast moving technological environment,
where total cost of ownership and operational efficiency is becoming paramount
• Green strategies leading to the need for power efficient data centre operations
Factors inhibiting market change include
• Historical reluctance to outsource – in terms of using co-‐location or hosted third party services German users have recently begun to close the 5 year+ gap that exists in the domestic market when compared with other European markets such as the UK, France and Netherlands.
• The strength of Mittelstand (top end SME) sector and inherent resistance to change existing trusted supplier relationship
• Concerns about data protection and requirement by many customers for data centres to be close by, as well as concerns about security of third party data centre operations
The regional characteristics of the market are evaluated and details of focus, players and future outlook discussed for Berlin, Düsseldorf, Frankfurt, Hamburg, Munich, Nürnberg, Stuttgart and other locations. Frankfurt has established itself as the major data centre hub in Germany and represents some 70 – 80% of current demand. Frankfurt is home to DE-‐CIX, Europe’s second largest Internet exchange and Germany’s leading ISP exchange with over 400 Internet Service Providers and carriers connected in 2011.
If Germany’s data centre needs are outsourced, who will be the winners and losers? Leading players into the market are analysed with SWOTs and other players are discussed.
The total German third party data centre market is calculated by market segment and assessed and the implications of trends to are assessed. Space figures refer to gross m² space.
0 100,000 200,000 300,000 400,000 500,000 600,000 700,000
2011 2012 2013 2014 2015
