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London data centres will feel the effects of the 2012 Games
Data centres close to the 2012 Olympics will be tracking potential repercussions
EDF has pledged to source one unit of Olympic Park power from green sources for every unit it pulls from the electricity grid
"It has not been possible to get a substantial upgrade for years; there is just no spare capacity available."
Olympic event spectators swarming into the City could affect data centre staff’s ability to get to work
How significant will the impact of the London 2012 Games be on the capital's data-centre operators?
It has widely been predicted over the last three years that the 2012 Olympic Games will cause a significant drain on electricity supplies in London. Residents of east London in particular are concerned, given that the Olympic stadium in Stratford shares local real-estate and power cables with many of the UK's biggest data-centre facilities.
As early as 2008, data centre companies and analysts told the Guardian newspaper that EDF Energy, the power company serving east London and also the official supplier of energy to the 2012 Games, would have to limit the energy it supplied to other organisations in central London in order to guarantee supplies to the Olympic Park and other venues. Trade publications reported similar complaints from companies who were being forced to wait for new or upgraded electricity supplies until the games are over. The concerns have also had knock-on effects for the data-centres sector.
As recently as September 2011, Terremark, the cloud-hosting business of international carrier Verizon, deliberately chose Amsterdam over London to site its latest European data centre to avoid the Olympic host city's problems with availability and spiralling power costs.
While power outages are an inconvenience for most people, they can be a disaster for data centres and other businesses hosting large server 'farms' and mainframe computers that run mission-critical, latency-intolerant applications which measure downtime in thousands of pounds of lost revenue, rather than blackout minutes. Fortunately, all concerned have had a long time to prepare for the eventuality. EDF Energy's official line is that demand from the Olympics is not preventing power being delivered to data centres and other businesses in the area that need it - but at the same time it has consistently warned commercial customers that demand is high and rising, and that early notice of any additional power requirements is critical to avoid waiting.
EDF Energy has also retained a disclaimer on its website warning of occasional power outages to the Olympic and Stratford City site. It is careful, however, to avoid attributing the possible effects to potential shortages, as opposed to supply disruption caused by severe weather or network faults, with electricity distribution rather than generation handled by UK Power Networks. EDF Energy has made efforts to avoid'capacity problems, simultaneously revamping its infrastructure to cope with London's notorious power problems - which existed even before the city was named as host in 2005 - and exploring more environmentally friendly options.
The company has pledged to source one unit of power from low-carbon nuclear and renewable sources for every unit it pulls from the mains electricity grid, at least for events held at the Olympic Park, with 80 per cent of that low-carbon power coming from its nuclear power plants at Dungeness, Hartlepool, Heysham, Hinkley Point, Hunterston, Sizewell and Torness. Heated water for the stadium itself is being provided by the specially-constructed Olympic Park Energy Centre, which runs a gas-fired combined cooling heat & power (CCHP) plant as well as biomass-fired boilers.
Energy costs and hosting demand
Despite these measures, energy costs inside the M25 are variously reported to have risen by 30 per cent in recent years, though because the industry is regulated suppliers cannot charge more for power in London than they do in other parts of the country.
The explosion of new hosting facilities in the capital over the last 20 years had already put a strain on available electricity resources, and it is hard to specifically attribute any recent price hike to the 2012 Games and associated construction projects as opposed to myriad other factors involved. Either way, data-centre operators sitting on facilities within the capital may simply have ended up paying more to secure their energy supplies and protect customer service level agreements (SLAs), though they are perhaps loath to admit it.
"I cannot speculate either way [on whether costs are 30 per cent higher], but for us it was down to good planning," says Richard Warner, UK marketing director for data centre operator Interxion, which runs facilities in east London's Brick Lane. "We knew it [the Olympics] was coming and we made sure we brought enough power in advance as well as excess capacity in case it was needed, so we have not seen it as an issue. We work through power brokerage houses to essentially buy power in advance, so although some organisations will find issues with the Olympics, our managing director has close relationships with those brokerages and negotiates supplies."
The price of electricity is regulated so there is no difference in price in London, says Aidan Paul, founder and chief executive at data centre communications service provider Vtesse Networks: "Once you have a connection you are fine; but what has happened is that in that area it has not been possible to get a substantial upgrade for a number of years because there is no spare capacity available."
Although it has offices in central, west and north London, Equinix's recently-expanded 'London' data centre is situated "well away" from the Olympic Park and outside the M25 in Slough. The company's UK managing director Russell Poole reports no fallout from electricity supply issues or upsurge in demand for hosting services from organisations involved in the Games. "If anything we have seen more interest in our data-centre locations because we take people away from potential power problems.
"The Olympic Park has inhibited the building of new data centres in London because the Olympics took precedence over everything else and that will carry on for a while," he says. "It would be very difficult to put a number on that [whether we are seeing more demand for data centre space as a direct result of the Olympics] - part of it is driven by the Olympics, but not a huge part.
"We did not plan specifically to have extra capacity for the Olympics," he insists. "It was just part of general planning for new inventory".
Travel disruption and security
Whilst data centre operators may have secured their power up-front, and largely feel themselves immune to fluctuations in supply, other aspects of their operations are perhaps more susceptible to disruption from the 2012 games.
"The issue is that people are reliant on centralised data-centre facilities but may not be able to get to them in such a congested area," says Paul. "People do regularly go in to change this or reconfigure that, and if there is any form of disruption or alert, the place will come to a standstill."
Being so close to the transport infrastructure which services the Olympic Park, Interxion faces the risk of delays to its engineers getting in and out of its data centre, one reason why it will install in-building sleeping pods within which five-to-ten on-site staff can crash if tubes or buses get too crowded during the event.
"We've put in sleeping pods next to the servers initially, but when we are fully set up we will have a fully bespoke room with a shower and kitchen," says Warner. "The main point is to give staff doing a late shift somewhere to crash until public transport congestion dies down".
Equinix's Poole adds: "In the event that customers have trouble getting to us during the Olympics, we are confident it can still happen because we are taking precautions to have access to our sites at all times. These involve local accommodation for shift working employees and alternative means of getting to locations."
Interxion has even gone so far as to upgrade security measures at its Brick Lane offices to combat any potential terrorist threat, demanding that engineers and ICT staff pass through scanners as they enter the building, for example. "We have a lot of contractors coming in and out of the site," says Warner, "so as a precaution we have set up an internal Olympics team to manage things and speak with local police."
Part of the broader security effort implemented by the local and Olympic authorities in collaboration with the local police involves cementing-up man hole covers to prevent unauthorised access, a practice which severely restricts the ability of Vtesse Networks and other communications cable providers to conduct routine maintenance or repairs to fibre optic cables should they be required.
"The broad statistics are you get a cable break once in ten years per 100km of cable, but that is in a trunk network in rural areas and towns outside London," explains Paul. "The London fault rate is substantially higher because of the density and the amount of work that goes on all the time." *
Regulation and accreditation: Visibility and scrutiny
Having the Olympics taking place in a part of London that shares its power supplies with so many large data centres'has certainly put the industry under a spotlight in a way it has not previously experienced, but this may ultimately prove a benefit. Data centre, telecoms and other IT services companies have long complained that the UK government's Digital Britain brainchild is overly ambitious without significant investment in the underlying infrastructure needed to make the concept a reality, for example.
"Data centres have certainly become more prominent in the press, and that has been a good thing," says Richard Warner of Interxion, "because the government is recognising more of a need to have a power infrastructure play behind its Digital Britain initiative."
The increased focus may also highlight the continuing lack of regulation within the data centre industry, not just around power efficiency, but also professional accreditation for its key staff. As previously reported in E&T, in September 2011 a programme to establish a standard data centre professionalism model was announced by the Data Centre Council of the ICT trade association Intellect UK working with the IET; elsewhere guidelines outlined by the CPNI Best Practice Guide for the Protection of Data Centres aim to draw up a reference model for data centre security. Such initiatives will gain prominence in the absence of other established practices.
Data centres Europe report: Confluence of growth factors means outlook is good
Events this year in and around London may or may not be affecting 'business as normal' for UK data centres, but elsewhere in Europe operators have fewer concerns about the future, with growth being driven by data centre outsourcing despite persistent concerns about the challenges faced by some European economies.
The latest edition of BroadGroup Consulting's Data Centre Europe report (edition IV) says that the sector remains highly resilient. Outsourcing remains less than 15 per cent of the estimated total requirement in western Europe, which, the market-watcher says, leaves significant growth opportunities for an expanding number of players. This opportunity is of course allied to demand for data-centre space coming from cloud computing, expanding bandwidth usage, digital media growth, enhanced e-commerce, social networking, mobile traffic, and more vertical market elements such as increased regulation in certain industries. At the same time, a different set of regulatory changes will over time allow more public sector bodies and government agencies to place their sizeable data sets into third-party managed clouds where they haven't been permitted to previously. In some places (such as Australia) this means the appointment of approved 'trusted' cloud providers.
Although each country in Europe has specific issues, there remains an ongoing focus on Frankfurt, Paris, London and Amsterdam; but, note BroadGroup analysts, cities such as Dublin and Zurich are also seeing marked growth.
Yet another influence is the capital outlay that organisations would now require to build their own data-centre facilities. Outside of specialist sectors when self-build is almost mandatory, budgetary proposals are being scutinised by boards who may well have an awareness of cloud options.
"The high cost of self-build has encouraged more companies to consider an outsourced solution, even though the high capex of data centres means that self-build typically only becomes 'cheaper' in around year 7-9," says Steve Wallage, managing director at BroadGroup Consulting. "The western European market remains characterised by a proliferation of small, specialist third-party facilities - for example, we have identified over 400 such data centres in the UK alone."
At the other end of the scale, Wallage says, the largest players are growing in size and "increasingly differentiated by their breadth of portfolio and financial strength". While the strong recent performance of the outsourced data-centre market has tended to help the vast majority of providers, the market will increasingly be divided into winners and losers, avers Wallage; however, he does not expect this to happen via a process of consolidation that's been the pattern for other IT sectors. "Small and/or single data centres are not often that attractive to larger players," he suggests; which means that such players will simply cease operations - which if true will be a worrying trend for their customers.
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