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The future of colocation in light of Brexit

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Companies across all sectors are questioning the impact that Brexit (whatever form Brexit ultimately takes) will have on their business operations. Currently, the simple answer is that nobody knows precisely what will happen, but it’s clear that companies will be affected to some degree.

Brexit aside for a moment, how’s it looking for colocation?

The colocation sector is looking better than ever, and the global colocation market is expected to double in value in the next few years. This success is down to several factors, not least:

Data (business ‘gold’) and the costs of storing it

  • Volumes of data are growing exponentially, which means added pressures on organisations to increase their on-site storage and carry the costs associated with on-site premises (power, staffing, security and infrastructure). As data volumes grow, it simply doesn’t make sense for most organisations to continue maintaining their own facilities

The cloud

  •  An upsurge in cloud computing has driven the success of colocation with hyperscale cloud giants requiring vast swathes of data storage. But colocation is proving to be the ideal solution for organisations of all sizes (not just for these cloud giants). Many businesses are looking to the cloud to future-proof their activities, but most haven’t yet put all digital resources into the cloud. They are looking for a hybrid solution combining cloud technology and locally-stored servers and IT equipment – cue colocation.

What impact might Brexit have on colocation in the UK?

Relocation versus reshaping: We can only guess at the impact that Brexit might have, in the same way we can currently only guess what shape Brexit itself might take. Whilst some companies might choose to relocate their UK headquarters and take their data centre requirements with them once the Brexit process has been completed, it’s likely that companies that are serving the UK market from other areas of Europe might end up moving in to the UK to make it easier for them to do business here. So, we may be looking at a reshaping of the data centre market as opposed to a dramatic tectonic shift.

Pressure to remain competitive: The UK is the largest market for data colocation space outside the United States, and this is unlikely to change in one fell swoop once the Brexit negotiations have been completed. But it’s fair to say that the UK might become less attractive if the economy is negatively affected by Brexit, and it’s possible that other European countries might put themselves forward as alternative data storage locations. The substantial power requirements of data centres mean that the UK’s high power costs and reliance on fossil fuels might have a negative impact on our attractiveness in relation to other locations unless action is taken to mitigate this risk. That’s why our state-of-the-art ListX site in Farnborough uses energy-efficient ‘adiabatic’ or ‘free cooling’ solutions, which are extremely energy efficient and significantly reduce our running costs and carbon footprint.

The flow of data from the UK to the rest of Europe: Whilst the UK remains part of the EU, data can be transferred freely between the UK and any EU country. However, there is currently no clear understanding what the UK’s departure from the EU will mean in terms of data flows. Whilst GDPR was adopted by the UK in 2018, certain exemptions were made before it was integrated into UK law, and this may be a stumbling block in terms of coming to an arrangement that permits the same levels of free transfer of data from the EU to the UK. 

Colocation - resilient in the face of challenges

As we head into the Brexit unknown, it’s likely that companies will be thinking more than ever about disaster recovery. It’s difficult not to think back to Y2K when we all feared that life as we knew it would end as Big Ben chimed midnight on 31 December 1999. What will happen on 29 March? Will all communication with mainland Europe end abruptly leaving us to float away into the Atlantic? The answer, most probably, is no. In reality, everything will carry on pretty much as it is now, for the foreseeable future, at least. 

There’s nothing to suggest that the colocation sector is at any greater risk than any other from the potential upheaval caused by Brexit. The vast majority of UK businesses will continue trading as normal and new ones will join the ranks. Their data storage requirements will continue to grow, and they will outgrow their existing infrastructure. The uptake of cloud services will continue to increase, as will an interest in hybrid solutions to accommodate cloud services alongside the physical storage and maintenance of IT equipment and servers. In short, growing organisations will continue to require appropriate expansion strategies, and colocation will offer them precisely what they need:

-    Efficiency (no need to maintain expensive on-site storage, access to cost-effective power and connectivity).
-    Reliability (constant and reliable power, cooling, connectivity guaranteeing permanent up-time).
-    Security (protection against theft, fire in secure locations with surveillance systems).
-    Scalability (the flexibility to scale up or down whilst only paying for the power used).

We’ve got your back ….

If you’re rethinking your data storage strategy and are looking for a forward-thinking, reliable and completely secure colocation partner, why not get in touch with us to discuss your requirements? Phone us on 0845 562 0123, email us at info@datum.co.uk or complete the online contact form. Even better, why not book a tour of our impressive List X facility?

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