The Covid-19 Pandemic is set to Impact the Majority of Data Centres with Growth to be Maintained - this DCP Report Finds
This report called 'Data Centres at a time of Pandemic - Weathering the Storm' analysis the issue of the impact of the Covid-19 Pandemic on the Data Centre segment worldwide, with an analysis of short term and long term impacts, capex and revenue changes, and operational and expansion made during the first quarter of 2020. It considers the operations and management strategies of the key Data Centre Providers.
The analyst provides an overview of the effects of the Covid-19 pandemic on the Data Centre segment worldwide, in Europe, North America and the Asia Pacific and China.
The report considers the impact of the Covid-19 pandemic in the key terms of Data Centre demand, Data Centre operations and Data Centre construction. The report analyses the drivers for Data Centre growth and contrasts pre-Covid-19 forecasts for Data Centre space (measured in m2) against the most recent results posted by Data Centre Providers worldwide and provides a revised forecast for Data Centre growth by region for the period from the end of 2020 to the end of 2021.
The majority of Data Centre Providers believe that the impact of the Covid-19 pandemic will be short-term only, with Chinese Data Centre Providers already resuming their construction programmes (as of the beginning of May 2020). Additionally, the large cloud service providers have emphasized the continued medium and long-term growth prospects, even though the sourcing computer hardware and the build out of existing construction projects have been delayed in the short term.
The period of the pandemic has been associated with the rapid growth of e-commerce, online gaming, online healthcare and social media including online video conferencing exemplified by the rise of Zoom video conferencing.
The report provides a global comprehensive overview of Data Centres around the globe including Data Centres in the USA, China and Europe and their response to the Covid-19 pandemic.
The DCP Data Centres at a time of Pandemic - Weathering the Storm report finds that the immediate effects of the Covid-19 pandemic include the following:
- Constant Growth - There is continued growth of Data Centre capacity and Capex despite the pandemic conditions.
- Supply Chain Disruption - But short-term capex and IT supply chains were impacted by the pandemic.
- Essential Infrastructure - Data Centres are being classified by authorities globally (sometimes for the first time) as critical infrastructure to be maintained.
- China led the way into lockdown – China was the first country to experience the pandemic and implemented lockdown and social distancing measures in January 2020.
- China was the first country out of lockdown - Chinese Data Centre companies implemented social distancing measures and restrictions on visitors with employee screening & from March 2020 resumed Data Centre construction.
- Automated Data Centre services are becoming more important – as non-essential visits to the facility are banned remote hands services and software automation services are being used instead.
The DCP report considers the growth in selected Data Centre markets worldwide since the pandemic struck, and considers Data Centre responses by region:
- China - The first country to be affected. Data Centres responded with a ban on construction activity and temperature testing for all employees and a visitor ban. Data Centres were impacted by IT supply chain shortages with a shortage of new servers for installation. Existing power utilisation rates increased as existing servers were run at full capacity.
- North America - Data Centres have introduced their own business continuity plans, with social distancing and non-essential visits to be stopped. Data Centre Providers have sought to encourage the usage of their “smart hands” services as an alternative to manual intervention and remote working via a software fabric and web portal.
- Europe - Data Centres have enforced restrictions based on Government regulations of social mobility, but with Data Centre facilities designated as being “critical” infrastructure.
- Asia Pacific - Data Centres have also complied with Government restrictions such as Singapore’s implementation of a “circuit breaker” approach locking down activity, but with Data Centre’s again being an essential part of Singapore’s “infocommunications” sector.
Table of Contents
- An overview of some of the Government regulations that have been introduced with their impact on Data Centres
- An overview of the impact of Covid-19 on technology services (including investment, Capex & construction).
- An overview of the geographical impact of Covid-19 by region (including China, the USA, Europe and the Rest of the World)
- An overview of the impact of Covid-19 on online & digital services (including e-commerce services).
- The changes in e-commerce service usage & the impact on Data Centres
- The changes in social media service usage & the impact on Data Centres
- The changes in online usage & conferencing & the impact on Data Centres
- Mapping the short- and long-term impact on the Data Centre segment
- The changes in Data Centre finance & investment - from the end of 2019
- The changes in Data Centre construction & growth rates - from the end of 2019
- The impact on forecast Data Centre growth rates to the end of 2020 & beyond
- Potential changes in Data Centre Acquisition & Merger (A&M) activity
- The impact of cross-border trade & the supply of equipment for Data Centres
- Monitoring employee and customer health & safety in the Data Centre facility
- Changes in the management & operations of the Data Centre facility
- The long-term impact of Data Centre operations
- The short- and long-term impact of Covid-19 on the Data Centre segment including:
- The immediate impact of the Covid-19 pandemic on the Data Centre segment
- The forecast after-effects of the Covid-19 pandemic on the Data Centre segment
Figures 2: A table showing the Equinix Recurring & Non-recurring capex costs, Q1 2020, Q4 2019 & Q1 2019
Figure 3: A table showing the key Chinese Hyperscale Data Centres under development from 2020 to 2021
Figure 4: A table showing a summary of capex in USD for selected Data Centre Providers for the Q1 2020 period
Figure 5: A table summarising the impact of Covid-19 on technology services (including Data Centre demand, investment, capex & construction
Figure 6: A table summarising the impact & effects of the Covid-19 pandemic by Country or region
Figure 7: A table summarising the changes in e-commerce services at the time of the Covid-19 pandemic
Figure 8: A table summarising the changes in social media usage since the emergence of the Covid-19 pandemic
Figure 9: A table summarising the effects of the Covid-19 pandemic on the key Internet Exchanges worldwide
Figure 10: A table summarising the impact of the Covid-19 pandemic on selected Data Centre reported results (Q1 2020)
Figure 11: A table showing the stock market performance of quoted Data Centre companies - from February 2020 to May 2020
Figure 12: A table showing the stock market performance of quoted Data Centre companies - from February 2020 to May 2020
Figure 13: A table showing the impact on Data Centre construction of the Covid-19 pandemic
Figure 14: A chart showing the impact of the Covid-19 pandemic on selected Data Centre markets worldwide (in the growth of Data Centre space in m2 against forecast growth)
Figure 15: A table summarising the changes in the management & operations of a Data Centre facility
Figure 16: A table showing the long-term effects on Data Centre operations of the Covid-19 pandemic
Figure 17: A table showing the immediate impact of the Covid-19 pandemic on the Data Centre segment
Figure 18: A table showing the long-term after-effects of the Covid-19 pandemic on the Data Centre segment
Figure 19: A chart showing forecast Data Centre space growth for 2020 - projected before & after the Covid-19 pandemic (in ‘000s of m2) for selected countries
In almost all countries Data Centres have been certified as being critical to the economy, in recognition of the importance made in providing online services - seen in the explosive growth in Zoom, Google Meets, Microsoft Teams, and Facebook Messenger desktop video conferencing applications.
Cloud Service Providers (including Google and Microsoft) have had to suspend their Data Centre expansion, as has Facebook (in Ireland and Alabama) with higher utilisation of servers and power being reported during the pandemic. With the end of the national lockdown in March 2020 Chinese Data Centre construction of new facilities has resumed.
But there continues to be an expansion of new facilities worldwide with the completion of Data Centre facilities already in the pipeline and the announcements of new construction projects (some of these include Interxion (Paris), Equinix (Singapore), SUNeVision i-advantage (Hong Kong) & RagingWire (Chicago)).
Acquisitions continue to be made during the pandemic. For example, investment firm ColonyCapital in May acquired Brazilian Data Centre UCL Diveo and its Vantage Data Center subsidiary acquired NGD Centre (Wales) in April and Etix Everywhere (Europe) in February 2020.
The large Data Centre Providers continue to grow their revenues, with Equinix anticipating growth of 6 to 8 percent revenue growth in 2020 - after seeing revenue growth of 6 percent in Q1 2020. But it is the Chinese Data Centre Providers who are seeing the most growth - with 21vianet Group reporting a 25 percent increase in Q1 revenues & GDS Holdings reporting a 34 percent increase in Q1 2020 revenues year on year.
After the pandemic Data Centres are to maintain their capacity growth despite the lockdowns, with DCP forecasting a slowdown in eight large markets worldwide of just 2 percent overall during 2020. The Data Centre sector is demonstrating its resilience even in the most intense downturn.
A selection of companies mentioned in this report includes:
- 21Vianet Group
- AirTrunk (Australia)
- Centrin Data Gaw
- DE-CIX IP
- Digital Colony (Brazil)
- Digital Realty
- FPT Telecom
- France IX
- GDS Holdings
- IX Brazil
- LCL Cloud
- NGD Data
- NTT Global Data Centres
- Otto Group
- QTS Rack Centre
- Thésée Data Centre
- Vantage Data Center
The analyst researches its reports typically within a three-month period. All of its reports are based on primary and secondary research including interviews with relevant companies/operators covered in the report. The analyst also draws on its extensive in-house database and its contacts in the field of telecommunications it has established since the company was launched in 2006.
The analyst has 26-years of experience in the field of telecoms pricing both mobile and fixed. They have a network of consultants as well as a multi-lingual research team, with languages spoken French, German, Polish and Spanish.