Thursday 26 April 2018

The right moves: Data drives the new economy

HP Ireland employs over 4,000 throughout the island of Ireland, in Kildare, Dublin, Galway and Belfast.
HP Ireland employs over 4,000 throughout the island of Ireland, in Kildare, Dublin, Galway and Belfast.

Paul McNeive

In the late 1990s I found myself involved in the development of several data centres in Dublin, and the sale of many more after the "dotcom bubble" burst.

But data centres have now evolved into a critical part of the Irish economy, at the heart of job creation, and on the day that the web summit closes, it's worthwhile updating on this fast growing sector.

Crucial to Ireland's success in becoming a world class location for data centres is that we are the closest connecting point to the US and there is a network of resilient fibre cables connecting us to the U.S and Europe with 95pc of the data held in Irish facilities being exported to Europe, the Middle East and North Africa.

"Data" is any information which is transferred over the internet and digitally stored in a data centre.

There are three types of data centres-the smallest are those developed and occupied solely by their owners, eg Irish banks.

The next type are known as "Co-location" facilities and these are developed and operated by specialist companies which "host" the servers belonging to third parties. The largest centres are known as "Hyper Scale" and these are the enormous centres developed by cloud computing companies like Google and Amazon where the data stored and exported is their own products. The market here is broadly a 50:50 split between these two latter classes.

Ireland's data centres are largely clustered along the M50 Motorway as this is the route followed by the "T50" which is a fibre trunking system running from north Dublin towards Citywest and there is approximately 250,000 sq m of data centres in operation.

Whilst 10 years ago there was a great focus on the standard of industrial or office building needed to house a data centre, data centres are now often ordered "off the shelf" and come in pre-fabricated boxes, manufactured to global standards and ready for installing in any weatherproof building which offers fibre and lots of power.

An example of this is Amazon's purchase of a 22,000 sq. m. warehouse on Greenhills Road Tallaght where their data centre uses over 20mw of power-twice the consumption of Waterford city.

The three biggest data operators in Ireland are Amazon (with seven centres), Microsoft and Google but just because data centres are located in Dublin doesn't mean that the associated jobs have to be there too. For example, Hewlett Packard operate a large data centre in Dublin but the 220 jobs which support this data are based in Galway.

On a European scale, Ireland ranks about fifth in terms of size and the four largest European hubs centre on the financial markets of Frankfurt, London, Amsterdam and Paris.

Whilst the jobs associated with the construction of these centres is welcome, the real bonus is that their location here serves as a "honeypot" in attracting high quality jobs for data scientists, analysts, engineers and software developers.

It is estimated that for every job working in a data centre, six other associated jobs are created. Once a company is hosting its data in Ireland it is far more likely to locate other operations here too and the "cluster effect" works in our favour.

The cost of the building needed to house a data centre becomes immaterial when one considers that the cost of the data centre itself can be up to €12,000 per sq.m. One advantage of these high value investments is that the operators are putting down very deep roots in Ireland.

The availability and cost of power is crucial to attracting data centres and an expert in the sector, Garry Connolly, president and CEO of Host in Ireland told me that with energy representing 75pc of operating costs it is critical that power costs are minimised so that Ireland stays competitive.

"Host in Ireland" is an industry led initiative to promote Ireland as a data hosting location and they promote Ireland as a cost-effective, secure and accessible location.

Mr Connolly told me that Ireland's appeal as a location is sustained by five core values which, he dubs "the five P's," namely "policy, people, pedigree, pipes and power."

It seems to me that the demand for data hosting will grow exponentially as the "internet of things" develops and all business's can benefit from attending a free conference being held by Host in Ireland at the RDS on November 11. For details visit hostinireland.com.

Indo Business

Business Newsletter

Read the leading stories from the world of Business.

Also in Business