Thought Leadership and Insight from Hydro66

Paul Morrison

For this edition of the Datacloud Ireland Interview Series, we spoke to Paul Morrison, Business Development Director from Hydro66.

Q.1 – Why has Ireland been so successful in attracting data centre investment?
It’s clear that Ireland has outperformed in data center deployment from what could be reasonably expected from one of the peripheral EU island countries. So the reasons for that are worth a closer look. It’s no secret that Ireland has aggressively pursued an ultra-low tax, regulation-lite environment for large corporations.

Many large multinationals have taken significant advantage of this. Ireland being an English-speaking tax haven near the UK but in the Eurozone is pretty unique! And with the large tax concessions on offer it’s easy to make the connection to data center deployments following along behind. Unlike say for example the Nordics with abundant low cost true green power, Ireland is not a natural home for power intensive industries - you could argue that data centers are an anomaly - you don’t see the aluminium smelters flocking here. This is not a controversial view - most of the inward investment bodies make the tax benefits on offer the primary part of their pitch. The 3 year planning debacle surrounding Apple’s hyperscale data center in Athenry, during which time Apple have opened one and announced a 2nd in the Nordics, is probably having a chilling effect on other large projects slated for Ireland, so could signal the end of this phase.

Q.2 – How do you think Brexit will affect the current rate of IT asset deployment in the county?
Brexit is a very serious issue for Ireland and the business community. Nobody likes uncertainty and it seems an extended period of uncertainty is the only thing we know for sure. Leaving aside the cross-border tax planners in the global corporates, it’s clearly a concern for the actual Irish companies who trade with the UK. The fall in value of GBP against the EURO is hurting them as the UK is a very significant market for their goods and services. Ironically it appears Brexit is enabling the UK to pursue its own low corporation tax policy. With all that in mind, there is an underlying backdrop of growth in DC space required so probably a net neutral result for native Irish businesses in the IT space.

Q.3 – How do you think GDPR will impact the storage of data in the European Union?
Companies are going to have to seek expert advice and become compliant by making sure all their existing policies, procedures and processes remain fit for purpose under the new regime. Or face potentially hefty penalties. Particularly those companies that are transferring personal data from the EU to external countries eg HR cloud companies are one obvious example. It may take a few headline cases to focus the corporate minds. So organisations may decide that some sort of hybrid cloud and colocation service, where they can retain full control over the most sensitive data, is the most appropriate response.

Q.4 – What will be the main drivers of data growth in the coming decade?
In a word - smartphones. Smartphones and video. OK that’s 2 words! The consumer is definitely leading the charge, with a 20MP camera costing less than $50 and a 4k video camera less than $500. There is a reason why most of the hyperscale data center builders are also household names. And of course there is the ever growing list of usual suspects - big data, personalized medicine, IoT, AI, HPC, driverless etc. I think Joe Kava summed it up best when he said “Whatever you are building is not enough.” And that speaks to the future of data centers being a scale game. Building single digit MW data centers won’t offer the economies needed. Data center builders need to start thinking “Where can I build my next 20, 30 40 MW scale data center?”. And some countries simply don’t have that power available, or not at the right price, or not green. So data growth will present opportunities and problems - I believe we will see scale data centers continue to migrate to the optimal locations - in the EU that means the Nordics - over the coming decade.

On the 21st of September, Hydro66 will be at Datacloud Ireland 2017 in Dublin. Meet them there!