Virus Orientated Growth: Data Centres
June 3, 2020
Robert Purton
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Viruses are historically the enemy of computing capabilities. However, COVID-19 has caused a dramatic spike in the demand for data centres as technologies that assist the millions of us working in health, logistics, or simply from home (WFH), or remotely communicating with our loved ones in a time of social distancing, are now appreciated as being essential to modern day life. Indeed, this was acknowledged at a very early stage in the current lockdown when data centre operatives were given equal ‘key worker’ status to doctors and nurses.
The emergence of a new business environment in the wake of the first wave of COVID-19 is expected to dramatically increase the demand for cloud services and expedited digitisation as companies overhaul their digital infrastructure to deal with new ways of working. Where for a relative few WFH was commonplace it has now become the new ‘normal’ for many. How long this phenomenon will last is the subject of much philosophising but many commentators in the sector believe that a large number of the enforced changes of lockdown are here to stay. Indeed, since lockdown began some providers have noted a 30-35% increase in data centre capacity usage, and even after the situation returns to ‘normal’, the way we work will continue to be data centre-driven and demand for additional processing is likely to continue as ‘the genie is out of the bottle’ on how we communicate, have meetings and undertake transactions. Outside established sectors such as banking, financial services, logistics, transportation, e-commerce, media and entertainment such as Netflix and Hotstar, demand for robust and scalable data infrastructure is likely to surge for the foreseeable future. This is particularly the case with ‘hyperscalers’ like google, who own and operate their own large or multi-unit facilities, rather than use a third-party facilitator. And, if there is the predicted second wave of infection – then the changes in how we live, work and shop will almost certainly become an established habit.
However, the planning and delivery of these critical pieces of infrastructure is not simple. Whilst a typical warehouse may require 3 – 4 MVA of power, a data centre may require a tenfold, or more, increase in electricity. A further essential component in providing a deliverable site is access to good fibre connectivity. And, even after the Government’s earlier fanfares of rolling out digital Britain, it is somewhat surprising that many urban locations in the UK are still not able to satisfy this critical requirement. Aside from these two key pieces of infrastructure, it is obviously essential to have a flat site and avoid other hazards, such as areas prone to flooding, as the potential repair bill for a catastrophic incident would be huge. Indeed, the scale of the investment, often in the billions, also frequently requires a freehold interest in a site and for there to be robust security measures in place. Although the M4 corridor and London in particular is the established hotspot for data centres and their infrastructure needs tend to result in clustering, the net is now widening to locations outside Silicon Valley and its hinterland.
Whilst the precise nature of COVID-19 legacy is unclear, we do know for certain that the internet and data centres that supply it with information have undoubtedly saved thousands of lives, helped feed millions of us in this crisis and will be a key element in the rebuilding of the UK’s challenged economy.

Robert Purton
Partner
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