European Data Center Growth with the CFO & EVP of Strategy at Digital Realty

We sat down with Digital Realty CFO Andy Power and Giuliano Di Vitantonio, EVP of Strategy & Business Segments, to get their take on recent European data center market growth.

This is an episode of HawkTalk, datacenterHawk’s series of candid one on one conversations with executives and leaders in the data center industry. If you enjoyed this episode, you can check them all out on our blog. If you’d like to know when we release future episodes, you can subscribe here.
It’s always great when we get to speak with business leaders from leading companies on our HawkTalks and this week is no exception.

Check out our video above with Andy Powers and Giuliano Di Vitantonio of Digital Realty to get their take on the state of the European markets.
Or if you’re short on time, you can check out our summary of the conversation below.

Growth in smaller European markets

When looking at demand patterns in the European markets, it’s usually a safe bet to look at what the North American markets are doing because those trends tend to follow in European markets 18-24 months later. Initially these trends start in the FLAPD markets and then cascade into the tier 2 and tier 3 markets across Europe.

The largest trend the European markets have seen over the past 6-7 years has been the demand growth from hyperscale users. Starting in about 2013-2014, hyperscale users began to establish their presence in the FLAPD markets and now we’re seeing those users want to get closer to their end-users.

Data sovereignty and improving the customer experience are the two main reasons hyperscale users want to get closer to their end-users. This means expanding out of the FLAPD markets and into smaller markets like Madrid, Zurich, Stockholm, and Vienna.

Growth of the global data center industry

The North American data center markets have been some of the largest in the world for a while now. As the data center industry continues to mature we are seeing those North American markets continuing to grow. But recently other markets around the globe, specifically in Europe, have been growing at a faster rate than the larger North American markets.

One reason for this is that a number of the hyperscale customers are US-based multinational companies and now that they’ve anchored their IT requirements on their home soil, they want to expand and ramp up their growth closer to their international users.

The tech divide between North America and Europe

The US has consistently had a lower GDP than Europe by more than 100%. But because the US has been an early adopter and investor in the tech space, Europe’s tech spend has been about 75% of that in the states. To take that even further and more specific to data centers, Europe has invested about 50% of what the US has on data centers and IT infrastructure.

These figures indicate that there is still quite a bit of room for growth in the European data center space. Which is another reason the growth in the European markets has been at a higher percentage rate than the US growth recently.

We'll continue to track Digital Realty as they continue to grow across the globe.

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