Amsterdam Data Center Market

Amsterdam Data Center Market Analysis

The Amsterdam Data Center Market is expected to register a CAGR of 3.14% during the forecast period.

The Amsterdam data center market stood at 995.34 MW in 2022, and it is anticipated to record a CAGR of 3.14 % during the forecast period to reach a volume of 1271.15 MW by the next six years. The main factors anticipated to drive the market expansion are the increasing demand for energy-efficient data centers, considerable investment by colocation service and managed service providers, and expanding hyperscale data center building.

• Additionally, the development of big data, cloud computing, and the Internet of Things (IoT) has made it possible for businesses to invest in new data centers to preserve business continuity. Industrial development is LAO expected to prosper due to the rising need for security, operational efficiency, improved mobility, and bandwidth. Software-based data centers boost industry growth by providing a higher level of automation.
• The massive amount of data that 5G networks must process, store, and distribute may burden data centers, raising the demand for computing power and supporting infrastructures like storage, communication, and edge computing. The rise in 5G is expected to drive the demand for data centers in the region. For instance, according to Ericsson, by 2026, the Netherlands' 3.5GHz (5G) roll-out is anticipated to be complete. By 2030, 60% of the Dutch population will be covered by the 3.5 GHz 5G network, up from 33% in 2023.
• To cater to a wide range of customer needs, players are expanding their data centers in the region. For instance, recently, Interxion has completed the expansion of its Amsterdam-based AMS17 data center. The third and final phase of Digital Realty's AMS17 facility, commonly known as the Amsterdam Data Tower, has been finished, and four additional floors are now available to clients. The extension adds a total of 2,048 other usable square meters (22,000 sq. ft) to the facility, as well as 2.4 MW of additional power. Digital Realty formally launched the tower, which is located within the Amsterdam Science Park, in 2016. Customers can now access 5,500 square meters (59,200 sq. ft) and 7 MW capacity at the data center.
• Similarly, Deutsche Telekom inaugurated two new data centers in Amsterdam, the Netherlands. The German telecommunications company announced the opening of twin data centers in the city with a total area of 21,000 square meters (226,000 sq. ft) to support its Open Telekom Cloud offering. According to the business, the two new facilities are powered entirely by renewable energy and have Power Usage Effectiveness (PUE) ratings of 1.32 and 1.25. The two new locations supplement the company's current Biereand Magdeburg, Germany operations.
• According to network operators, the electricity infrastructure cannot support a limitless number of connections from these large-scale power users. Data center construction is restricted in several nations due to the lack of energy grid capacity. This puts the desired expansion of current data centers in jeopardy. The issue is most prominent in the Amsterdam metropolitan area.

Amsterdam Data Center Market Trends

Tier 4 is Expected to Hold Significant Share of the Market

• The Tier-IV certification is currently the highest classification among data center facilities. These data centers require huge capital compared to other tiered data centers and are usually present in developed economies.
• There are several tier 4 data centers located in the Amsterdam region. These data centers typically provide the highest uptime and availability, with fully redundant power, cooling, and network connectivity systems. Some examples of tier 4 data centers in Amsterdam include Equinix AM5, located in Amsterdam-Zuidoostand. It offers a variety of colocation and interconnection services. Similarly, Interxion Amsterdam is located in Schiphol-Rijk and is certified to meet Tier 4 specifications. It offers a range of colocation, cloud, and connectivity services.
• This tier also ensures optimized efficiency. The servers are housed in the most physically advantageous locations. This drastically extends the life of the hardware. If temperature and humidity are kept consistent, one can gain great efficiency. Even the backups and dual power sources are treated like primaries. Also, the tier-IV data center can require up to 3 to 1 of the space required to facilitate the IT footprint. For tier IV, the kW cost component is USD 25,000/kW of the redundant UPS capacity for IT.
• Data centers in the city need to meet certain regulatory requirements and industry standards for security, privacy, and environmental impact, among other areas. In Europe, data centers may need to comply with the General Data Protection Regulation (GDPR) and the EU Code of Conduct for Energy Efficiency in Data Centers, which provide guidelines for reducing energy consumption and improving efficiency in data centers.
• According to The Economist, Copenhagen was the leading worldwide digital city in 2022, with a score of 80.3, followed by Amsterdam, with a score of 74.6. Digital cities rely heavily on data center infrastructure to collect, store, and process large amounts of data generated by IoT sensors and other devices. The data centers manage and store this data and provide the computing power necessary to analyze it and extract insights. With smart city applications such as smart traffic management and optimized energy usage, the data center infrastructure is essential for ensuring these systems' reliable and efficient operation. Developments toward the digitalization of the cities would create an opportunity for the studied market.

E-commerce is Expected to Hold Significant Share of the Market

• Data centers provide numerous significant benefits to e-commerce businesses. They also use the data collected to generate valuable insights about their clients and optimize their company processes. Big data provides a direct view into the brains of customers. Companies can learn about current behavior by carefully studying their consumers' consumption habits. Companies that use advanced data analytics infrastructures may foresee various stages and patterns within their demographics, whether low or high turnover. This would be impossible without significant advancements in data center infrastructure.
• One of the most prominent instances is Netflix, which has recently managed to generate a consistent number of entertainment items by utilizing all of the information from its subscribers globally. Netflix has one of the world's largest data centers of any video streaming service. It has an impressive data center that can derive insights by analyzing the ratings its customers give to its movie catalog and browsing trends on its website. The collection is so extensive that it considers a user's number of clicks, surfing times, pause periods on movies they are watching, and other engagement data.
• The digitization of e-commerce is an ongoing trend transforming how retailers and consumers do business. The push to digitalize the e-commerce industry has been accelerated by the COVID-19 pandemic, which has caused more consumers to shift to online shopping. With more consumers using smartphones and tablets to shop online, retailers must optimize their websites and checkout processes for mobile devices. Social media platforms like Instagram, Facebook, and Pinterest are increasingly used as e-commerce channels. Retailers can sell their products directly on these platforms or use them to drive website traffic. Such trends toward the digitalization of e-commerce would drive the market.
• According to the Central Bureau of Statistics, fashion was the most purchased online category in the Netherlands in 2022. Over half of Dutch customers bought clothing, shoes, and accessories online that year. Streaming services came in second, with around 46% of buyers purchasing films and programs online. E-commerce data centers are designed to handle high volumes of traffic and transactions and provide secure and reliable infrastructure to ensure smooth operations. Such huge online sales would create an opportunity for the studied market to grow and also push the market players to develop new services and solutions to cater to a wide range of customers.
• According to the Dutch Data Center Association, 80% of data centers in the Netherlands use green electricity. This means that at least 20% of Dutch data centers are still largely reliant on fossil fuels. The green energy used is often 'light green' electricity ('certified power') and does not come from sustainable electricity generation in the Netherlands. Only a small part of the power supply for data centers is 'dark green,' meaning that it is generated sustainably in the Netherlands. There is still a lot of work to be done, particularly considering the Climate Accord and the objectives of the Dutch Climate Act, namely the almost eradication of greenhouse gases and CO2-neutral electricity generation in this country by 2050.

Amsterdam Data Center Industry Overview

The Amsterdam data center market is moderately consolidated with the presence of several major players, including Keppel Data Center Pte Ltd, Equinix Inc., and CyrusOne Inc. The companies continuously invest in strategic partnerships and product developments to gain substantial market share. Some of the recent developments in the market are:

• In April 2023, InMotionHosting announced the commencement of its first international data center in Europe. The three-story data center in Amsterdam, Netherlands, will purportedly provide customers NVMe hardware, 99.99% network uptime and security monitoring, improved UltraStackServer configurations for performance, free SSL certificates, premium malware, and hack protection. Three of the world's largest internet exchanges are housed on this site.
• In April 2022, Scaleway expandes its European footprint by constructing a second data center in Amsterdam. Scaleway believes in an open, multi-cloud, hyper-resilient approach that gives clients total control over their businesses and data. Scaleway released its first full multi-AZ region with FR-par-3, making it the only European cloud provider to meet this gold standard, a key pillar in Gartner's Magic Quadrant for first-tier CSPs. The business had intended to create a fully operational zone in Amsterdam by the end of 2022.

Amsterdam Data Center Market Leaders

Amsterdam Data Center Market News

• December 2022: Equinix Inc., the world's digital infrastructure firm, announced the first pledge by a colocation data center operator to reduce overall power consumption by increasing operating temperature ranges within its data centers. Equinix will begin defining a multi-year global roadmap for thermal operations within its data centers immediately, aiming for much more efficient cooling and lower carbon footprints while maintaining the premium operating environment for which the company is recognized. This program is expected to help thousands of Equinix customers to reduce the Scope 3 carbon emissions connected with their data center operations over time as supply chain sustainability becomes an increasingly essential aspect of today's enterprises' total environmental activities.
• May 2022: Berenberg Private Bank announced that the Berenberg Digital Infrastructure Fund (the "Fund") recently granted Unitranche financing to support Angelo Gordon's AMS3 Data Centre in Amsterdam. Berenberg Digital Infrastructure Fund, which is still in the investing phase, provides Unitranche and Mezzanine financing for data centers and glass fiber networks across northern and western Europe. This financing for the AMS3 Data Centre is consistent with the Fund's core business and expands on Berenberg's track record of providing data center finance throughout Europe.