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Press Release


London, 13 September 2010 - Increasing data centre demand and investment across western European markets, and the factors that restrict this growth form the background to a new report from BroadGroup - the third bi-annual European Data Centre Market.

Among the key findings of this new report BroadGroup has identified close to 20million ft2 of third party data centre space in 17 Western Europe markets (excluding internal usage and outsourcing services). The UK and German markets are tied in terms of country importance, which in both cases is around 20%.

BroadGroup predicts that third party space is growing at around 14% per annum but believes this figure could be much higher if some major wholesale builds can both gain funding and attract large corporate customers.

Revenue growth is at a higher rate of around 17% reflecting some upselling and price increases in the market. The report suggests that cloud computing, rather than being a threat to third party data centres will create additional demand. A further dimension to the capacity for growth is that around 85% of Western European data centre usage continues to remain in-house although it will only slowly decline over the next few years.

The report reveals that other more fundamental shifts are occurring in the data centre market as providers pursue new market segments, adapt new business models, and enter multiple markets. The trend is transformative as new segments emerge such as 'wholesale lite' (a hybrid between a large co-location and small wholesale deal).

Against this background, the report deals robustly with a SWOT analysis of the key pan-European players, and in particular the potential threats they could confront. Data centres in Europe as in other regions, have also assumed an international importance as large enterprises seek locations for new facilities to support the globalization of their businesses.

'This report reveals that there are continued opportunities for strong players in the data centre market in Europe, but it varies widely by country and competitor,' commented Steve Wallage, managing director of BroadGroup Consulting and the report author. 'Demand remains strong and pricing will continue to rise, but there are concerns around environmental legislation and how that will impact costs.'

Key cities across the 17 countries covered in the report remain the principal location for data centre activities. London for example, represents more than 80% of all UK third party space. Each country is profiled in the report with a commentary and metrics on key players.

For the future, the report provides a broader picture of whether future demand will be in-house or outsourced, and in particular whether third party data centres have the skills and economies of scale to manage environmental factors much more successfully. Forecasts for space by data centre market segment (Carrier owned, Wholesale, Managed Services and Colocation) are provided through to 2013.


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