They say every cloud has a silver lining. And in Benelux, there is a very large cloud, and, for the right business, not only a silver lining but a golden opportunity: cloud computing and big data.
Already one of the physical gateways to Europe – through Amsterdam, one of the most advanced and busiest ports in the world – the Benelux region is positioning itself as one of Europe’s biggest virtual gateways – thanks to the breakneck rise of the global digital economy.
The figures are truly astonishing and show the transformative nature of the growth of big data. It is estimated that 90% of the world’s data was created in just the last two years alone.
By 2021, according to Stijn Grove, managing director of the Dutch Data Center Association, the digital economy will account for more than half of Holland’s GDP.
“Everything that happens online goes through a data centre,” said Grove. “We are fast approaching what some are calling ‘a data singularity’ with the advances in machine learning, AI, the Internet of Things and self-driving cars. The demand for low latency data centres to handle this is huge.”
“All of this is interconnected and delivers on the digital economy,” Grove told firms attending the Ambition Benelux event at Enterprise Ireland’s Dublin offices. “For example, if you want to hop in an Uber, it requires the traffic information, the weather, the locations of drivers and it is provided to Uber in a split second, so they can combine it and display the relevant information to the customer.
“And this is replicated in any online app or digital product or website. This happens in the background and has led to big hubs springing up in the world to accommodate it.”
Why Benelux has become a data centre hub
The Netherlands has been quick to adapt to the new digital landscape and is one of the top five data centre hubs in Europe. It is already home to some of the biggest data handlers in the world, housing data centres for the likes of Google and Microsoft, and has averaged 18% YoY growth in data centre provision for the past seven years.
Currently, the main data centre provision is in Amsterdam itself, accounting for 215,000 sq.m of the total 308,000 sq.m of data floor space. Others are regional centres around the country and two hyperscale centres. Together they account for 1,300 megawatts of power use.
The trend shows no sign of slowing. Currently 20% of all foreign direct investment in the Netherlands is in data centre-related sectors. That is forecast to rise to 25%, said Grove.
In 2017, Equinix built the €200 million AMS4 data centre in Amsterdam, housing almost €1 billion in IT equipment but the recent Ambition Benelux event at Enterprise Ireland’s Dublin headquarters was told it would be filled with data within the next two years.
Opportunities for Irish construction companies
It should alert Irish firms in construction, IT and project management. There is now high demand in all of these areas, as demand outstrips supply in the local market. According to Grove, the shortage in expertise and skilled personnel is also experiencing a double-down effect as Dutch firms, employers and other bodies look to Brexit-proof their long-term infrastructure plans by sourcing alternatives to UK suppliers.
This should provide the ideal impetus for firms looking to diversify their export-side, said Richard Engelkes, Enterprise Ireland’s Senior Market Advisor in Construction Products and Services to the Benelux region.
“Currently, 35% of our exports go to the UK and 59% of this is in construction. What we have in the Benelux region is a fast-growing market and, in particular, with cleantech, pharma and data centre construction, there is a demand for the expertise of Irish firms. Irish expertise in these areas is highly respected and highly sought after. They have an international reputation in building and delivering difficult and complex structures,” says Engelkes.
In acting as a digital gateway to Europe, there are also challenges, not least in powering the data centres themselves. The energy footprint of the data centres sits at 1,300 MW. By comparison, Amsterdam the city needs 400 MW to function.
“There is no country in the world that built its power grid to foresee and meet these challenges,” says Grove. But these challenges also raise opportunities for Irish firms specialising in power and renewables solutions.
Grove added: “The market is good, demand is big. We have a need for good personnel and services and the companies here are looking for long-term contracts and partners to bring certainty to the growth. Companies here can see it is accelerating and they are looking for at least certainty in their supply chain. With Brexit, we are seeing firms preparing for non-UK suppliers and this puts Irish counterparts in a great position.”
Irish firms looking to take advantage of opportunities should think about Dutch partners, says Grove. As Dutch construction firms move into the data centre build sector, they need good services, contractors and expertise.
“It is already known that Irish firms have the expertise, the Irish advantage,” said Engelkes.
Thanks to that positive sentiment, Irish firms will find that the door to this market is already open.
Learn more on how Enterprise Ireland can support your business to export to new markets.