Across all sectors, companies are constantly questioning the impact that Brexit will have on their business its operations. Sadly, nobody knows what will precisely happen, however, companies will be affected whether it's positive or a negative outcome. Focusing on the colocation sector for now, it is looking better than ever, and the global colocation market is expected to double in value in the next few years.
This success is down to a few main factors, to start with the cost of storing data is ever changing. Volumes of data created by the customer is growing rapidly, which means added pressures on organisations to increase their on-site storage and carry costs associated with on-site premises (power, workers, security and infrastructure). As data capacities grow, it simply doesn’t make sense for most business to continue maintaining their own facilities.
Another factor to consider is the cloud. An increase in cloud computing has driven the success of colocation with hyper-scale cloud giants requiring vast bands of data storage. However, colocation is proving to be the ideal solution for businesses of all sizes – not just the for these cloud giants.
Many businesses are looking to the cloud to future proof their activities, but most are yet to pull digital resources into the cloud. Business are looking towards more hybrid solutions combining both cloud and local stored servers with IT equipment. This is where colocation comes in.
So, what impact might Brexit have on colocation in the UK? Well, we can only estimate and guess what the impact may have in the same way we can only currently guess how Brexit will turn out. Whilst some businesses may choose to relocate their UK headquarters and take their data centre requirements with them once Brexit has happened, its very likely that companies that are serving the UK market from abroad might end up moving to the UK despite Brexit. This will shape the data centre market as we know it.
The UK is the largest market for data colocation space outside the US – this looks unlikely to change over the Brexit proceedings. However, it is fair to say that the UK might become less attractive if the economy is negatively affected during and after Brexit. From this, other European countries will put themselves forward as alternative data storage locations. The power requirements of data centres mean that the UK’s high-power costs and reliance on fossil fuels might have a negative impact on our credentials in relation to other locations unless action is taken to mitigate the risk.
Whilst the UK remains part of the EU, data can be transferred freely between the UK and any EU country. However, there is currently no clear understanding of what the UK’s departure from the EU will mean in terms of data flows. Whilst GDPR was adopted by the UK in 2018, certain exemptions were made before it was integrated into UK law, and this may be a stumbling block in terms of coming to an arrangement that permits the same levels of free transfer of data from the EU to the UK.
As we head into the unknown outcome of Brexit, it is likely that business will be thinking more and more about disaster recovery of their IT infrastructures. There’s no reason to suggest that colocations sector is at any significant risk than any other from the potential upheaval caused by Brexit. Most of the UK business will continue trading as normal and new ones will join the ranks. Their data storage requirements will continue to grow, and they will outgrow their existing infrastructure. The interest of cloud services will continue to increase, as will as an interest in hybrid solutions to accommodate cloud services alongside the physical storage and maintenance of IT equipment and servers. In conclusion, growing businesses will continue to require appropriate expansion strategies. Colocation will offer them precisely what they need; Efficiency, Reliability, Security and Scalability.
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