Growth of data centres both an opportunity and responsibility for Ireland
The right moves
Changes in 'policies and pipes' are set to accelerate the strong growth of data centres in Ireland, and firms should be aware of the effects - whether involved in their development, or simply using data in one's business.
Data centres are specialised buildings where data is stored, managed and exported, and Ireland ranks as a leading centre, alongside Frankfurt, London, Amsterdam and Paris. Indeed, the boom in the development of these facilities, much of which occurred here during the recession, saved many a professional firm from collapse. Now the sector is set for a fresh wave of activity following the development of two new undersea fibre cables to the US in the last 18 months, bringing the total to four.
For Europe, Ireland's growth as a centre for hosting data is well ahead of the average and there are 14 existing undersea cables between Ireland and the continent. A new cable, from Cork to France, was announced last week.
Activity in the industry is measured by power consumption, which is now at 300 megawatts. Half of this is taken up by the three 'hyper-scale' operators in Ireland - Google, Amazon and Facebook. The other segment of the industry, which is growing fast, is 'co-location', where operators store and manage data for other parties. The main players in this sector are Digital Realty, Equinix, Interxion and Dataplex. Co-location operators provide a space inside their building where the customer places their own servers, or a space in a rack, or a shared server. Thousands of companies worldwide, who are serving European markets, are being serviced by co-located facilities in Ireland.
Most of the data centres in Ireland are located along the route of the M50, as that is also the route of the 'T50', an infrastructure of 40 ducts and chambers that was developed alongside the motorway. Data centres tend to cluster in certain locations - usually because there is easy access to back-up power and fibre connections. The first wave of data centre development in the 1990s saw several existing buildings, usually on IDA estates, being converted. Latterly, however, facilities are purpose-built, particularly for reasons of energy conservation.
Not only is the growth in 'pipes' (physical infrastructure) boosting development in Ireland, but Brexit, and the issues of international compliance with data privacy laws, are set to boost demand further.
Central to this growth in demand are new European regulations known as the General Data Protection Regulations (GDPR), which come into force across the EU on May 25, 2018. These regulations protect a citizen's right to decide what happens with their personal data. The collapse of the 'safe harbour' agreement also means that many US companies find it more convenient to host European citizens' data in Europe. Brexit could see UK data centres forced to re-locate within the EU - with Ireland as an obvious beneficiary.
The GDPR will have implications for the property sector. For example, estate agents collect and store large amounts of information on citizens. When leasing a property, tenants provide bank accounts, landlords' references, bank references and character references. While an agent is required to keep information for minimum periods, from May 2018 any citizen can demand that their information be deleted.
Firms will need clear policies and procedures on how they collect, manage and dispose of data. This is a corporate governance issue, involving trust around the storage of data, and should not, I suggest, be casually referred to the IT department.
'Host in Ireland' is an initiative to raise awareness of Ireland as an optimum location to host 'digital assets'. Garry Connolly, President and Founder of Host in Ireland told me that there is a lack of awareness here of the impact of GDPR. The organisation is holding an event in Dublin today, which is a 'call to collaborators', such as professional bodies, trade associations and experts, to work with them in preparing for the new regulatory regime. The Data Protection Commissioner will be another source of information.