REFLECTIONS THE DAY AFTER DCD MADRID 2019
I encourage myself to capture these reflections, after being spurred by my friend José Antonio Jaquete to be more prolific and share more with the whole sector, those things that are happening and I think will happen in our beloved sector of the Data Center.
DCD Madrid is for me perhaps the most important day of the year, as it allows me to pulse the sector, meet people, share experiences and show what we are working on. If to this, this year joins that in the same week we received the results of the global survey of Uptime Institute, the CBRE market study for major European cities and that coinciding with the event has made the first meeting of Infrastructure Masons in Spain, because we have a cocktail that gives me to think and order my ideas, at least one morning.
If we ask ourselves about the state of the sector in Spain, it depends on who you talk to, the sector is either good or weak. This is due to a trend that I have been talking about for the last two years, the colocation and the cloud.
If we look at CBRE’s report on “FLAP markets” (Frankfurt, London, Amsterdam and Paris), we see that in the first four months of the year 41 MW of placements have been contracted in these four markets, 81% of which are for cloud clients. Any doubts about the sector’s trend? I understand that no and Spain will not be different. Of the total contracted power, 45% has been contracted in Frankfurt, which seems to be the main beneficiary of Brexit. CBRE in its report indicates that they extrapolate these results to an annual market growth of 21% for the total of 2019.
This explosion of colocation and the cloud is in perfect harmony with the ideas expressed in the Panel of Experts in which I had the opportunity to participate together with the first swords in Spain of Equinix, Interxion, Global Switch and Data4. They handle data and forecasts that we do not know and made clear their commitment to Madrid as a new digital hub for Southern Europe. The investments of their companies in the period 2018-2019 demonstrate this.
Therefore, the sector is going well for the companies that work for these multinationals and weak for those that have historically worked with the corporate data center sector.
The panel asked for help and sensitivity to the administration to take advantage of this opportunity that could change the economic model in the medium term in Madrid and the rest of Spain. Because let’s not deceive ourselves, the investment effort made by these companies has two major obstacles: bureaucracy (licenses, permits, legislation …) and the lack of availability of electricity. For this last problem, I launched something that we are working on together with a multinational in the energy sector and that we are already in a position to offer our clients. We have solutions to lower the energy bill through PPA (Power Purchase Agreement), solutions to bring energy where there is none, through trigeneration plants to gas or biomass, photovoltaic and wind and something very important, all these solutions can be contracted in OPEX.
For some friends who came to talk to me, these solutions were the bombshell of the event, and surely for others they were just siren calls. I can tell you, we are already in talks with a customer about this and it is a very serious investment. We’ll see if we can crystallize it. The numbers come out.
Finally, to talk about what most caught my attention in the Uptime Institute survey, the difficulties we have in the sector companies for hiring personnel. It caught my attention because it was one of the key points in the first meeting held by Infrastructure Masons in Spain. From this association, we will work to reach Universities and “Formación Profesional” schools to show our sector in depth and make it attractive for future generations to work in it. It is the future, there is a lot of demand and it will continue to grow.
I hope you have found these reflections interesting and I encourage everyone that there will be a thread with your opinions in linkedin.
A big hug to all and thank you for sharing and/or recommending my posts.
Managing Director of Quark.