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Quo vadis Data center market?

Data center operator maincubes GmbH and one of its partners, Art-Invest Real Estate, have analysed the Data center market in Germany and come to the conclusion that there is not only a great deal of potential for growth in business for providers and users, but investment in Data center properties also represents a highly lucrative market.

The long-term development can be demonstrated using current density, for example. Current density is a measure of how many kilowatts per square metre are available to use in terms of infrastructure within a Data center. Whilst between 1970 and 1990 only between 200 and 300 watts were required per square metre, in 2015 it is up to 2,000 watts. Germany boasts excellent growth prospects, because Data centers represent one of the core elements of digital infrastructure, which are the prerequisite for technological progress for numerous developments. There are currently around 2.65 million square metres of Data center space in Germany, of which around 500,000 square metres are offered on the rental market. The rest is operated by companies in-house. Thus Germany is already the largest co-location market in Europe. For Germany, additional growth of 18 percent is forecast up to the year 2020, which corresponds to Data center space amounting to 3.14 million. When you consider that until now merely 13 percent of all German firms have outsourced their data and/or their IT, it quickly becomes clear just what potential Data centers have. Cloud computing, the Internet of Things, Industry 4.0 and Big Data are the most important growth factors. In Germany, these are set to ensure fivefold data growth (1.1 zetabytes). Indeed, the growth of the total area of Data centers in relation to data growth points to a future bottleneck, even if you take into account the further development of IT technologies like higher data densities. From this perspective alone, the Data center market promises outstanding prospects for operators and institutional investors.

“In the future, for technical reasons but also due to legislation and security provisions, companies will have to rely a great deal more on external Data centers. From a financial point of view too, external Data centers make ever more sense for all types of company. What’s more, in Germany there is a disproportionate demand for Data centers. The extremely good connection to the global internet, the safe geological location, the stable economy linked to the “Made in Germany” label and the legal certainty are selling points not only for German companies. We are also seeing a trend whereby European and international companies are increasingly using German Data center operators with an international slant. In our view the market is still comparatively young and offers outstanding opportunities for operators and investors,” comments Albrecht Kraas, CTO of maincubes.

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