Ukdctrends2016

1 © Copyright Tariff Consultancy Ltd. All rights reserved www.telecomspricing.com
Benchmarking Data Centre Pricing February 2016 – Data Centre Trends Summary

2 © Copyright Tariff Consultancy Ltd. All rights reserved
TCL Data Centre Trends – expertise in Data Centre research from TCL
TCL has constructed a unique database of Data Centre pricing from across Europe,
Africa and the Middle East which is the basis of TCL’s Data Centre reports and the
subscription Data Centre Tracker service.
TCL currently has pricing from more than 1,200 Data Centre providers with in
excess of 3,000 Data Centre facilities across 54 countries.
TCL has constructed a unique database of Data Centre pricing from across Europe,
Africa and the Middle East which is the basis of TCL’s Data Centre reports and the
subscription Data Centre Tracker service.
TCL currently has pricing from more than 1,200 Data Centre providers with in
excess of 3,000 Data Centre facilities across 54 countries.
TCL has developed a dedicated Data Centre website as a repository of information
at: www.datacentrepricing.com and follow us on twitter @DatacentreTrack

TCL Data Centre Pricing – selected research portfolio (
www.datacentrepricing.com)

Trend 1 – Customer use of Data Centre Power & Power Density
Average Data Centre power density for Carrier Neutral
Data Centre facilities in Europe ranges from 1.05 kW per
m2 up to 1.10 kW per m2.
In 2015 Pan-European Data Centre provider
TelecityGroup stated that average power density was
1.05 per kW.
Data Centre provider Interxion has stated that power
density for equipped space is not increasing, although
new power is being added to support new space
expansion, but not existing facilities.
Data Centre power varies according to facility type. Older
Data Centre stock or Carrier Based providers typically has
a limit on the power available per rack – with 2 kW per
rack being provided as standard.
Although high-specification Data Centre providers can
host high density applications of up to 20 kW per rack –
in practice the average power density used remains
relatively low and stable.

Trend 2 - Key Data Centre Customer Segments – key user segments
The main UK Data Centre customer segments are focused on
telecoms, content, integrators, IT, hosting & cloud services with
enterprise use being around 21 per cent. Third party use is the main
segment.
TCL has analyzed the main customer segments for 25 UK Data
Centre providers, with the breakdown shown in per cent below:
But cloud services are driving
new services offered by the
IT services, integrators & the
hosting & telecoms provider
segments – the cloud service
provider is not the only
segment offering cloud
services from the Data
Centre.

Trend 3 – Wholesale Data Centres vs. Retail Data Centres
TCL finds that the gap between a Wholesale Data
Centre and a Retail Data Centre is narrowing.
Selected Wholesale Data Centre providers are
offering retail racks of space, either through selected
partners (with NGDC using resellers to offer retail
services) or via an agency agreement (with Infinity
SDC outsourcing retail customer support to a 3rd
party). Digital Realty (as its Digital Chessington
facility) provides suites for retail customers.
Data Centre facilities are being
constructed that are capable of
becoming “flexible” Data Centre
facilities, which can cater for Retail &
Wholesale requirements, different tiers,
SLAs, power requirements & resilience –
and offers a range of different price
points.
Recent Data Centre developments are
combining shared (retail) usage with
dedicated usage via data halls.
Dedicated halls provide services for
wholesale clients. Modular Data
Centres can provide pre-assembled
modules with power & cooling with
only rack & data cabling to be
assembled in a short time-frame –
reducing customer lead-times to as
little as 4 weeks or less.

Trend 4 – UK Data Centre energy usage issues – costs & power accounting
UK energy costs are among the highest in the EU-28
countries, and are approximately twice as high as kW
per Hour rates in Sweden.
And industrial energy costs in the UK have not
declined to the same extent as in other countries.
Data Centre providers are accounting for power in
one of 3 ways, including the following:
1.The bundling of space & power into a single rental
charge – with up to 4 kW of power bundled per rack
by selected Data Centre providers.
2.The use of metered power as a separate charge -
with metered power used for suites – with rates up to
Euro €0.30 per kW Hour.
3.And some Data Centre providers charge an overall
facility charge (based on a PUE rating) which is then
applied to the space rental charge.
European industrial electricity rates
per kW Hour as measured by Eurostat
in the 2nd
half of 2015 are:
•UK: Euro €0.149 per kW Hour
•EU-28: Euro €0.121 per kW Hour
•France: Euro €0.10 per kW Hour
•Netherlands: Euro €0.09 per kW Hour
•Sweden: Euro €0.62 per kW Hour

Trend 5 – Rental charges for Data Centre cross connects
Increasingly Data Centre providers are providing cross
connects as a monthly rental service, with costs of up
to USD $100 per month per cross connect.
Previously Data Centre providers were offering cross
connects as a once-off installation charge, but the
trend is to monetize revenues by charging recurring
revenues per cross connect.
Cross connects are becoming an additional source of
revenue.
Telecoms and IP providers are finding that their
monthly rental costs for multiple cross connects are
increasing – and are putting pressure on their margins.
“I am under pressure to cut costs for all of my IP users
every month in order to remain competitive. But the
increasing cost of cross connects is increasing my cost
base, with Data Centre providers charging a monthly
rental fee for cross connects – which involves no
service at all,” European Telecoms Provider.
In the US market, rental costs for cross
connects for Ethernet-based rentals
range from USD $100 up to USD $300
per month and above.
Equinix, and other Carrier Neutral Data
Centre providers are introducing
monthly rental fees for their cross
connect products.

Trend 6 – Key UK Data Centre technology changes
There is a move towards “flexible” Data Centre
facilities which are being built to cater for a range of
customer types, including wholesale and retail users,
with low or high density IT applications.
Previously Data Centre facilities were built to a
uniform Tier standard (Tier 3 or Tier 4) with
resilience. Other facilities, typically Carrier Based,
offered colocation services with lower standards of
power and resilience.
Data Centre facilities are now being built with multiple
data halls which can be dedicated for high density IT
applications, or used for shared customer usage.
Each data hall can have different tiers, resilience, SLAs
and price points for different customer needs.
And the Data Centre hall can be built as a pre-
fabricated module, which can be equipped on site in a
short period with the cabling and rack design to be
added.
New Data Centre facilities are being
equipped with power saving
technology to provide a lower PUE
(Power Usage Efficiency) ratio.
Technology innovations include:
•Direct air free cooling
•Data Centre virtualization
•Data Centre Information Management

Trend 7 – The impact of cloud services on the Data Centre market
Pan European Carrier Neutral Data Centre providers
(including Equinix, Interxion & TelecityGroup) are
offering connections to their own cloud exchange,
such as Interxion’s Cloud Hub and the Equinix Cloud
Exchange.
The Data Centre’s cloud exchange provides direct
access to a range of major cloud providers, which can
be used by the enterprise user as part of a hybrid
cloud solution.
In the US, Data Centre providers are adjusting to the growth of cloud
services in two main different ways:
(a) By providing access to an independent cloud exchange with direct
access to major cloud providers
(b) By providing cloud services directly to SME enterprises as part of a
core Data Centre service.
The largest Carrier Neutral Data Centre providers are not themselves
providing their own cloud service, but are leveraging their
independent status by connecting to a range of cloud providers.

Trend 8 - Data Centre pricing pressures continue to be severe for new space
New UK Data Centre facilities are being planned in
Scotland, Birmingham and Essex.
Additionally, new Data Centre facilities are due to
enter service in and around the London area
during 2016, with Infinity SDC opening its facility
in Stratford (East London), Telehouse Europe
opening its Telehouse North 2 facility (London
Docklands) & Gyron (NTT Com) opening Hemel
Hempstead 3 during the first half of 2016.
With the increase in new UK Data Centre capacity Data
Centre providers are reporting severe price
competition, with large wholesale Data Centre
providers (including Infinity SDC and Digital Realty)
offering space for both retail and wholesale users, with
racks and contained suites of space being sold to retail
& enterprise users.
Data Centre providers are offering
services which are geared to retail
users, including DDOS mitigation
services, cloud connect platforms and
trading services – which are intended
to attract a range of enterprise end
users.

Trend 9 - Data Centre location & Data Centre ecosystems drive pricing
UK Data Centre power & space growth
TCL has monitored the range of UK geographical Data
Centre clusters that are developing. Each has their own
ecosystem characteristics, but all are priced significantly
less than Data Centre facilities in the London & M25 area.
They offer good value for users who are not dependent on
being located within the London region, and there is
migration from London to outlying areas outside the M25
region.
Overall UK Data Centre Customer Power
(DCCP) and floor space growth
continues to grow over time.
There is a close correlation between
Power & Space growth, with average
Data Centre Customer Power density of
1.05 kW per m2.
Data Centre power capacity is being
expanded in line with new space, and
selected providers are upgrading the
power capacity for high density
applications.

TCL Data Centre Trends – The Equinix acquisition of TelecityGroup
The proposed acquisition of Pan-European Data Centre
provider TelecityGroup by US-based Data Centre
provider Equinix will impact the UK market in
particular.
Equinix has five existing Data Centre facilities in the
UK, whilst TelecityGroup has 11 facilities across the UK
– 16 facilities in all for the enlarged group.
The combined group is forecast by TCL to have 80 MW
of Data Centre Customer Power (DCCP) – including the
new Equinix London-6 facility – and 74,000 m2 of
space.
Total Equinix/TelecityGroup space and DCCP equates
to 12 per cent of UK Data Centre capacity – it will be
similar in size to Data Centre providers such as Infinity
SDC, Global Switch and Digital Realty.
The UK Data Centre market still remains fragmented,
with around 120 Data Centre providers offering
colocation space with considerable customer choice
still available.

TCL UK Data Centre Trends – A new service offering a unique UK Data
Centre perspective
The TCL UK Data Centre Trends service consists of
an updated Power and Space forecast made
once every six months. It also has a survey of
25 Data Centre providers and includes new
product analysis, new facility news and
financial analysis of key Data Centre providers
present in the UK.
The UK Data Centre market continues to see the
development of new facilities and additional
power with development in the regions
outside the London & M25 area being a
particular trend.
New flexible Data Centre facilities are being
established which provide self contained
PODS with built in power and cooling, and
which can be used for various Tiers, SLAs and
price points.
The TCL UK Data Centre Trends service costs GBP
£999 per annum for a limited promotional
period only.

T: +44 (0) 208 993 6861 E: info@telecomspricing.com W: www.telecomspricing.com
Post: 47 Cecil Road, London W3 ODB, UK

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