Data centres also require power — lots of it. And although power supply tends to be more reliable in developed markets, they are among the ones which are most environmentally conscious. In addition to power, strong intellectual property laws and other legal and regulatory frameworks all favour developed markets as the first choice for data centres.
Exuberance over data centre assets, although worrisome, may not be in bubble territory just yet. All of us are using more data, spurred not only by fun stuff like Tik-Tok and Instagram story but also serious stuff such as cloud adoption by businesses, e-commerce, internet of things, autonomous vehicle, AI, 5G roll-out, distributed ledger technology, digital assets, cryptocurrencies, edge computing, FinTech — the list goes on.
According to real asset consultant Turner & Townsend, demand for data centre storage is at an all-time high but there are supply constraints. “Supply chain disruptions due to Covid-19-related delays and pent-up demand have had a severe impact on the data centre sector in Europe. Global steel prices have more than doubled in the past 12 months in Europe, according to the London Metal Exchange. As well as price increases, long lead-in periods are impacting data centre programmes, especially the supply of equipment such as generators and switchgears. It is common at the moment for switchgear to have a 12–16 week lead-in. Similarly, the war for talent continues to impact the data centre sector. Skills shortages persist, and the need to retain and attract talent and diversity into the sector is vital,” says the consultant.
