London tipped to lead European data market. Yes, despite Brexit!

London will remain the most important European market for data, according to a report from data centre giant Equinix – even with Brexit looming and Frankfurt catching up.

The firm yesterday published its second annual Global Interconnection Index, which measures global traffic exchange, interconnection, or direct and private traffic exchange between businesses.

The report predicted that bandwidth for this purpose would grow to 8,200Tbps by 2021 – the equivalent of 33 zettabytes of data exchange a year and 10 times more than the projected capacity of internet traffic.

It concluded that London would be crucial for the European part of this market, finding that 35 per cent of private data exchange growth in the region came from the city.

Although Germany's Frankfurt is tipped for faster growth – at 58 per cent compound annual growth rate compared with London's 52 per cent – the English capital has twice the capacity.

A separate survey of 130 IT decision-makers found that the UK is still seen in a favourable light, despite the nation's impending exit from the European Union.

Some 64 per cent of respondents said that the UK's data centre industry makes it the best place in Europe to work with partners, customers, supply chain and cloud service providers.

Of course, the highly unpredictable nature of the Brexit negotiations and the fact firms in many industries are still issuing warnings about the long-term effects mean it's probably worth taking this report under advisement.

A further concern will be the future arrangements for data flows from the EU into the UK. At the moment, the UK is hoping Eurocrats will grant it an adequacy decision – but the assessment won't begin until it has left the bloc and speculation is rife about the impact state surveillance laws will have on the decision.

Equinix's main report said growth in interconnection bandwidth in Europe had been catalysed by data compliance requirements. The region is expected to grow 48 per cent each year, it said.

However, the report said this would only make up just over a fifth of global bandwidth – the US is expected to contribute 40 per cent, while Asia Pacific will contribute 27 per cent.

The report put the predicted increase in interconnection down to firms shifting from using the public internet to private data exchange in a bid to mitigate cybersecurity risks and support the growing need for real-time interactions.

Most of the growth in interconnection is expected to come from enterprises and cloud and IT providers, at a rate of 98 per cent each year to 2021.

The telecommunications industry has the greatest provisioned capacity to exchange traffic at 1,756Tbps, with cloud and IT services coming second at 1,382Tbps. At the other end of the spectrum are government and education (61Tbps) and healthcare and life sciences (169Tbps). ®