Brexit from Data4, a pan-European Operator

November 25, 2016

Firstly, full disclosure: I voted Bremain (rubbish hybrid word, probably why we lost), read the Guardian and think the Daily Mail preforms an essential role, notably making it much easier to pick out who goes up against the wall when the revolution comes (sorry Mum, just the way the cookie crumbles and anyway you can probably hide under the corpse of Jeremy Clarkson and play possum).

I do feel it is important to disclose one’s position when writing about probably the most divisive issue for a generation. So now that’s out of the way, what are the potential implications of Brexit (so catchy) on pan-European data center activity?

It should be pointed out that the recent wave of activity in key continental European markets such as Frankfurt, Amsterdam, Paris and Milan was set in motion long before June 23rd 2016 and continues to be driven by two key factors: the need to get closer to the eyeballs consuming content (Edge) and data sovereignty.

The first factor is easily addressed: Brexit will have little or no impact on the edge-driven demand we continue to see across Europe. As content has become of higher and higher quality and more content than ever is streamed around the world, it has become clear that the legacy telecommunications infrastructure was not designed to handle this volume of high quality traffic. Therefore edge requirements will continue to grow, especially where there are the highest concentrations of content consumers, regardless of the political machinations currently occurring on this sceptered isle.

Data sovereignty is a more complex issue. Just as the “EU-US Privacy Shield” was being agreed by a majority of European States, Britain was busy voting itself out of the EU. Whilst it seems that the UK would most probably seek to pass legislation equivalent to Privacy Shield post Brexit, it is by no means a guarantee. There is the possibility that the UK could revert to more liberal, US-style privacy principles. This is however the most unlikely scenario as the UK would be expected to seek to protect its sizeable IT and data center industries by aligning future policy with Europe. Assuming that the UK follows the latter path, do not expect to see a mass exodus out of UK data centers towards the continent.

It would therefore seem then that Brexit will not have a considerable impact on the pan-European data center market. However until a plan has been defined by the government of the UK and that plan receives the consent of Parliament (pending the Supreme Court ruling in December), Brexit remains an abstract concept upon which the citizens of Britain and Europe can project their hopes and fears. This abstract concept has sown the seeds of doubt amongst many existing users of the UK’s 1.75M square meter data center market as well as those seeking to gain a foothold in Europe for the first time. This doubt is where the opportunity lies for other European data center markets to benefit from Britain’s uncertain political future.

This view was provided by Adam Levine, COO at Data4 Group

Leave a Reply