A pandemic like the one we are living comes every few hundreds of years, but with it, it brings much more than widespread disruption to our daily lives; it essentially leaves generation-lasting change. João Marques Lima looks at some of the drastic measures to save Europe’s IT infrastructure from collapse and the lessons learnt.

COVID-19 has been abysmal to sectors such as retail, hospitality and transport. Millions of people have lost their jobs, whilst billions have experienced working from home – many for the first time.

Businesses had to adapt and so have the IT infrastructure guys, who, nevertheless, have been able to control demand peaks, working alongside national authorities.

We have heard of measures we thought we would never have to bear including, for example, national rules on limiting the use of broadband on streaming platforms to “save” enough bandwidth for emergency services.

For example, Portugal has applied this, and although bad quality virtual calls or a Netflix movie streamed without HD might cause frustration, there is a general understanding across the business and public opinion spheres that health services must come first.

The reality is that information campaigns targeting consumers across the continent talking about the responsible use of services in order to avoid network congestion have become a common practice. This was the first large-scale internet rationing exercise most have ever lived through.

The Body of European Regulators for Electronic Communications (BEREC) explains that consumers were provided with practical recommendations on the ways they could contribute to avoiding congestion issues and supporting access to essential information, teleworking and distance learning applications by abstaining from downloading large files or streaming HD videos during peak hours.

Two big tech giants also helping to reduce network traffic were Google and Netflix, which reduced traffic on European networks by around 25%.

“Several consumer protection measures have also been implemented, including asking operators not to take any actions against consumers who cannot (given current circumstances) settle their bills, information gathering about consumer care and retail operation, and tracking service outages at essential services sites (e.g. doctors’ premises),” the BEREC says.

However, there is an underlying message in the midst of all these actions: for the IT infrastructure space, this has shown just how much the world relies on the sector. This isn’t so much about the industry understanding that, as we are all aware of what IT infrastructure provides, but what’s important is the lessons taken by governments and external bodies.

Without taking away the devastating toll COVID-19 has had on everyone’s lives across the globe, one thing the pandemic has done for the IT infrastructure space is bringing it to the forefront of all economies. This is a mission critical component of any nation, and both governments and the public seem to be more aware of it now than ever.

I would go as far as saying that the shift in digital usage has been accelerated by at almost a decade in the space of 12 months. A recent McKinsey & Company report looking at digitalization acceleration and the turbo-charging speed that the pandemic has brought upon verticals is quite clear: things like digital customer interactions have accelerated the equivalent of three years in the last one alone, whilst the share of products and services partly or fully digitalised have advanced the equivalent of seven years.

Some of the “new norm” things such as working from home, for example, were all slowly being implemented. COVID-19 has fast-forwarded much of this move to the present. We are not living in 2021, but in 2028.

Europe’s data centre and telecom economy has weathered the storm brought upon by the pandemic. This despite the pressure it was under. For example, in March 2020 – the first month when the pandemic was truly felt much across the continent and the first lockdowns were put in place – internet service providers (ISPs) reported varying rates of traffic growth ranging from 35% to 90% within the EMEA region.

During the entire period of the confinement measures across the Old Continent, there were no network outages due to overloading, the BEREC says.

The Now and After

This is – we all hope – a once-in-a-lifetime event, and so is the opportunity for governments, businesses, and operators to endeavour in their building quest of the digital economy.

The next step will be to keep up with the demand triggered by the pandemic, something that most analyst houses seem to agree will not diminish when the world reopens. The opposite is expected to happen.

To put things into perspective, consultancy firm IDATE and industry group FTTH Council Europe has put together a report that forecasts a surge in high-speed internet lines up to 2026, citing COVID-19’s  boost in demand as one of the main reasons for the surge.

According to the study, high speed fibre was present in 88.1 million homes across the European Union and other European nations. This value is now forecasted to jump to 202 million in the next six years.

Still within the network layer, faster networks, such as 5G, could bring an annual benefit of as much as $133 billion by 2025 to the EU’s economy, according to the European Commission. More than $50 billion are lined up for investment to expand Europe’s 5G coverage.

As for data centres, the sector has been for years enjoying a landslide when it comes to cloud consumption, which has led to billions of dollars being invested over the last quarters across Europe to expand footprints – especially in Ireland, the UK, the Nordic region, Germany, Benelux and France.

Eurostat, the data house of the European Commission, reports a big jump in enterprise cloud adoption between 2018 and 2020. 36% of EU enterprises used cloud computing in 2020, mostly for e-mail and storage of files, compared to 24% in 2018.

According to a recent study from market research firm Global Market Insights, the Europe cloud computing market is set to grow from its current market value of more than $25 billion to over $75 billion by 2026, gaining remarkable traction over the 2020 to 2026 period.

Steady uptake of cloud computing platforms to lower IT infrastructure procurement and maintenance costs and rapid expansion of global cloud vendors within the European countries, is one of the main reasons behind the surge in cloud adoption. This has been intensified by the Covid-19 pandemic as businesses were forced to bulk up their cloud infrastructure to support remote working.

Richard L. Villars, group vice president of Worldwide Research at IDC, says: “By the end of 2021, based on lessons learned in the pandemic, most enterprises will put a mechanism in place to accelerate their shift to cloud-centric digital infrastructure and application services twice as fast as before the pandemic.”

And no one puts it better than consulting firm Accenture who says “cloud is not an option, it’s a mandate”, especially as we live through this new inflection point created by COVID-19 where every company must dramatically accelerate their cloud migration to enable end-to-end digital transformation.

It goes without saying that data centres are the core of cloud computing and the sector will continue to build across Europe, something that just like fibre deployments, has been speeded up as a result of COVID-19.

Lydia Brissy, director of the European Research Division, comments: “As societies across Europe become more and more connected, especially in 2020 with web traffic growth ranging from 35% to 90% within the EMEA region, it is little surprise that the number of hyperscale data centres worldwide has more than doubled between 2015 and Q2 2020 from 259 to 541 according to Cisco Systems.

“As a result of COVID-19, we have seen first-hand the importance of continued network investment, and the exponential increase in companies moving solely to remote working has proved just how fundamental the sector is to keeping the working world afloat.

“Cloud infrastructures were paramount in enabling governments and healthcare associations to respond quickly to the crisis and remain so as we figure out a new normal.”

Nonetheless, Brissy and colleague and director of the Omnichannel Group at Savills warn that the exacerbating factor of the pandemic has brought the data centre industry to a tipping point, which will require rapid restructuring, organisation, and coordination amongst all market players.

This is the shifting age of Europe’s IT infrastructure, which will also take into account the need to be more green, diverse and inclusive.

COVID-19 might have brought with it a certain level of rationing, but lessons have been learnt and Europe has listened. Investors are hard at work to find new locations to invest, operators are expanding their footprints, hyperscalers are rushing to increase capacity, and enterprises and consumers are consuming services like never before. There’s no way back.

In the meantime, stay safe, and we will meet again.

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