Demand for colocation and hyperscale capacity within many of the major European datacentre hubs is soaring as enterprises seek to shutter their in-house datacentres and migrate more of their business-critical workloads to the public cloud.
The onset of the Covid-19 pandemic has only served to exacerbate and accelerate the pace of these migrations, but demand was already high, and on the rise, even before coronavirus “stay-at-home” mandates came into effect from March 2020.
The important role that datacentres play in keeping the digital economy ticking over has become increasingly apparent as the pandemic has played out, but with this growing awareness also comes greater scrutiny of the sector’s environmental friendliness, particularly where its power consumption habits are concerned.
And it is not difficult to see why, says Ed Galvin, founder and CEO of datacentre market watcher DC Byte. According to his firm’s data, the amount of power consumed by the UK datacentre market is currently about 7.5TWh (terawatt-hours) a year, and is set to soar.
“Our data shows nearly 5,000MW [megawatts] of live IT power, with over 1,000MW now under construction – and a further 3,000MW committed for development in the next few years [across Europe, the Middle East and Africa],” Galvin tells Computer Weekly. “Just to emphasise the significance of this, the next five years will see more growth than in the previous 30.
“In the UK, the largest datacentre market in Europe, we see nearly 850MW of live IT power and nearly double that number again, either under construction or in planning, committed developments.
“With the total electricity production – including imported power – of the UK currently at about 300TWh a year, the datacentre sector already accounts for around 2.5% of national power consumption, rising to around 5% in the next five years.”
Colocation community champions energy efficiency
Ensuring there is a stable supply of power on hand to meet this demand is a top-of-mind concern for datacentre operators, but environmental lobbyists are also keen to ensure this power is renewable in nature to ensure that the continued growth of the datacentre market does not come at the expense of the environment.
For this reason, many datacentre operators have signed renewable power purchase agreements with utility providers, and are also taking steps to develop their own energy-generating infrastructure, says Forrester analyst Abhijit Sunil in the market watcher’s latest datacentre market trends report.
Operators also have a vested commercial interest in doing all they can to improve the energy efficiency of their facilities, given how big a line item power costs are for them, through site and equipment upgrades, too. The less power they use, the less carbon emissions their operations generate and the less they cost to run.
As stated in the Forrester report, it is also worth remembering that migrating workloads to a colocation or public cloud-hosting datacentre often results in older, less energy-efficient private datacentres being taken out of commission. So, on the whole, the global datacentre industry is becoming leaner and greener as enterprises move to outsource their datacentre requirements.
“Cloud vendors’ and hyperscalers’ numbers have exploded over the past decade, making them top energy consumers,” says the Forrester report. “Traditional datacentres are far less efficient, but the proportion of traditional on-premise datacentre workloads is in steep decline, yielding a smaller overall energy profile. The real testament to efficiency is that overall datacentre workloads increased by 650% between 2010 and 2019, but overall energy use remained flat.”
Ed Galvin, DC Byte
Even so, pressure on the datacentre industry to push the envelope even further on matters of sustainability continues to grow, particularly as governments across the world embark on efforts to make their economies renewably powered and carbon neutral.
In Europe, there is the European Green Deal initiative, which was first announced in December 2019 and centres on establishing the European Union as the world’s first “climate-neutral bloc” by 2050.
Also, the European Commission (EC) published its Shaping Europe’s digital future strategy document in February 2020, which called on the continent’s datacentre operators to become “climate-neutral” by 2030.
“Datacentres and telecommunications will need to become more energy-efficient, re-use waste energy and use more renewable energy sources,” says the document. “They can and should become climate-neutral by 2030.”
It goes on to urge the datacentre sector to introduce measures “no later than 2030” geared towards achieving this climate-neutral goal.
The industry collectively responded to this call in early 2021 by forming the Climate Neutral Data Centre Pact, which saw 25 of the colocation and public cloud’s biggest players pledge to improve the sustainability of their European operations.
The initiative’s over-arching aim is to transform the European datacentre market into a climate-neutral entity by 2030 by introducing changes that would reduce the risk of their operations contributing to climate change.
As such, the initiative’s participants – which include colocation giants Equinix, CyrusOne and Digital Realty – will be set measurable targets for attainment in 2025 and 2030 that commit them to take steps to improve the energy efficiency of their datacentres and cut the amount of water used to run them.
Participants will also be set targets to encourage them to use 100% carbon-free energy sources to power their facilities and re-use any waste heat generated by their operations. They will also be encouraged to prioritise the repair and re-use of the IT hardware inside.
Progress on all these fronts will be monitored twice a year by the EC, but many of the pact’s participants have previously made individual pledges to do more to improve the environmental friendliness of their facilities.
Digital Realty, for example, went public in May 2020 with its plans to embark on a 10-year carbon reduction initiative geared towards ensuring the greenhouse gas emissions of its operations are within the levels needed to keep global warming at bay.
Several months later, fellow colocation provider CyrusOne set out its intention to become a carbon-neutral datacentre operator by 2040 by using renewable energy to power its facilities, while making a commitment to embark on sustainability-focused equipment upgrades within its existing datacentres. It also pledged to ensure any new datacentres it builds will follow energy-efficiency design principles.
Such proclamations will no doubt have been prompted in part by the EC’s efforts to ensure its digital economy grows in a sustainable way.
At the same time, however, enterprises are becoming ever more mindful of the sustainability of their own supply chains, which include the companies they source their cloud and colocation services from, says Forrester’s Sunil.
In fact, sustainability is increasingly becoming a source of competitive differentiation for colocation providers and cloud companies, which is another reason why so many of the market’s major players have recently announced plans to make their operations leaner and greener.
Companies operating in almost all verticals – including technology, public sector, healthcare, banking and finance – will have “ambitious” environmental goals that they are working towards, and want to work with IT partners that will help, rather than hinder, their ability to achieve those aims, says Sunil.
“As a result, the number of requests for information [during technology procurement exercises] that seek information on sustainability initiatives has increased markedly over the past years,” he says.
The hyperscale cloud community are big consumers of colocation capacity and are credited with driving much of the demand for datacentre space in many major European markets. Microsoft, Amazon and Google have all made big green commitments of their own in the past 18 months, and they are likely to be looking to work with colocation partners with similar objectives, says DC Byte’s Galvin.
“It probably will go that way as the market matures,” he says. “The hyperscalers make up the majority of demand right now, and if they were to add environmental sustainability within their own scoring criteria when considering which colocation providers to go with, moving in that direction would become [increasingly] customer-led.”
Expanding on this point, Mark Turner, director of cloud business at hosting provider Claranet, says it is not uncommon for enterprise IT buyers to stipulate in their requests for proposals that they are seeking a colocation partner with certain minimum power usage effectiveness (PUE) score.
This metric is used to measure datacentre energy efficiency and is calculated by dividing a datacentre’s total power consumption by the amount of energy consumed by the IT equipment housed within it.
Although the usefulness of the metric is subject to ongoing debate within the industry, given how easy it is for operators to manipulate their scores and misrepresent what they mean in their marketing materials, Turner says PUE is still considered an important indicator of a provider’s commitment to minimising its impact on the environment.
“A favourable PUE score can often lead to lower overall costs in running expensive IT estates,” he says. “The cost to these businesses is millions of pounds of electricity a year, as electricity prices can increase by 8-12% a year on year due to green taxes.”
There is also a chance, as the market matures, that the stance that colocation and hyperscale firms have taken on sustainability matters may also affect their ability to recruit and retain staff, says Scott Balloch, director of energy and sustainability at hyperscale colocation provider Colt DCS.
“Sustainability, in particular, is becoming increasingly important to people when making informed decisions about what organisations they want to build and progress their careers with,” he says.
“It is something that is important to a lot of the millennial workforce, so setting significant goals and taking genuine action to meet them is crucial to attract future talent. Not only do we see it as key in talent acquisition, but purpose is also really important to our current employees.
“Going forward, purpose and being a part of the sustainable movement will be major factors in not only attracting but also maintaining staff, as workforces increasingly demand employers they can be proud of.”