How Data Centres in Europe are Adapting to the Growing Demands of a Digital Economy

Data centres are the backbone of the digital economy, that we have no doubt. They serve as the infrastructure for storing, processing, and transmitting vast amounts of data and are part of a larger digital infrastructure ecosystem that also includes fibre networks, cell towers, internet exchanges, satellites, and other assets. As emerging technologies such as artificial intelligence (AI) and the Internet of Things (IoT) continue to gain traction, data centres in Europe are adapting to meet the increasing demands of these technologies as investors line up to rip off the benefits of being an early backer of the future. JSA Media Consultant João Marques Lima offers a closer look.

One of the key ways in which data centres in Europe are adapting to emerging technologies is by investing in new infrastructure and technologies. For example, many data centres are implementing high-performance computing (HPC) solutions to support AI and other data-intensive applications. Such is the case of, for example, Verne Global in Iceland and Kao Data Centres in the UK These systems use powerful processors and specialised hardware to perform complex calculations and analyse large datasets of the most varied sources, from scientific research to engineering and design, financial modelling, healthcare and drugs discovery, and machine learning.

In addition to investing in new hardware, data centres are also deploying software-defined infrastructure to improve flexibility and scalability. This approach allows IT administrators to manage infrastructure resources programmatically, making it easier to allocate resources as needed for different applications also resulting in better resource usage and more sustainable use.

Another important shift taking place in the data centre industry is the use of edge computing. Edge computing involves deploying computing resources closer to the source of the data, rather than centralising everything in a single data centre. This can improve latency and reduce the amount of data that needs to be transmitted over long distances. As a result, many existing and new data centre companies in Europe like Atlas Data Centers are building out edge computing infrastructure to support IoT and other edge-centric applications.

Advancement of AI

All of those infrastructure investments and deployments are leaning towards supporting the advancement of what we can say are society-changing platforms like AI-driven inventions. AI is indeed one of the most exciting and rapidly evolving areas of technology –so we have seen with things like ChatGPT in recent months-, and data centres are playing a key role in supporting its development. AI requires massive amounts of data to train algorithms, as well as powerful computing resources to perform the calculations necessary for things like natural language processing and computer vision.

To support AI workloads, data centres are investing in GPU-accelerated computing and other specialised hardware. Many data centre companies are also partnering with AI vendors to offer tailored solutions for AI and machine learning workloads. For example, Kao Data Centres has recently partnered with NVIDIA to provide a new AI-ready infrastructure platform.

Financing and Building the Ecosystem

The development of advanced infrastructure and support for emerging technologies requires significant investment, and many different organisations are involved in financing these efforts. Interestingly, private equity has become the owner of a large share of the investment pie, greatly led by the downfall of other real estate verticals during the COVID-19 pandemic. Data centre companies are also themselves investing in new infrastructure and technologies, while also seeking financing from venture capitalists (VC) and other investors.

Government support is also playing a role in the development of data centre infrastructure in Europe. In some countries, governments and where possible, local/regional authorities, are offering tax incentives and other benefits to attract data centre companies and encourage investment in advanced infrastructure. For example, the Irish government has introduced tax incentives for data centre investments in the country, which has helped attract major players like Meta and Google in the past decade.

Finally, partnerships and collaborations between data centre companies, AI vendors, and other technology companies are helping to foster the ecosystem for emerging technologies. These partnerships allow companies to combine their strengths and resources to develop new solutions and services. This has been greatly advocated within machine learning for financial institutions.

The future of data centres is likely to be shaped by many emerging technologies we have mentioned above such as AI, IoT, and edge computing. To prepare for this future, data centres in Europe are investing in new infrastructure and technologies, while also focusing on sustainability and energy efficiency.

One major trend in the data centre industry is the move towards renewable energy sources. Data centres require significant amounts of energy to power their operations, and the use of renewable energy sources can help reduce the carbon footprint of these facilities. Many data centre companies in Europe are investing in renewable energy sources such as wind and solar power, while also implementing energy-efficient cooling systems and other measures to reduce energy consumption.

There are many examples of good practices, from Equinix’s recent investment in solar farms in Spain, to Digital Realty’s Power Purchase Agreement (PPA) with ENGIE, a French multinational electric utility company, and Blackstone-backed QTS Data Centers reuse of excess server heat to warm up to 10,000 Dutch homes.

In addition to sustainability and energy efficiency, data centres are also focusing on security and compliance. With the growing importance of data privacy and protection, data centres must comply with various regulations and standards.

In 2023 and 2024, new regulations designed to support a fairer infrastructure development monopoly as well as inclusive construction frameworks are set to not only change how investment is made but make it more open. For example, businesses will need to be more transparent on their sustainability-linked activities, whilst the EU is also pushing forward with legislation to force fibre deployments into new building construction requirements for the Gigabit economy era which will be paramount for the success of new AI consumption models.

Overall, of the many up-and-coming transitions in the data centre space, the readying for AI and all it brings with it is an exciting phase for the industry. Despite most conversations – and even this piece – focusing on the hard assets, the human capital is also playing and going to play an ever more important role in this preparedness.

It is the case to say that this is the time to buckle up and get on with it, walking the talk, and building the footsteps that will cement the trail of digital, societal and economical modernisation.

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