In 2017, Alphabet Inc.’s Google listed eight data center locations in the U.S., one in South America, two in Asia and four in Europe (Belgium, Finland, Ireland and Netherlands). The technology giant has decided to markedly increase its footprint in Europe.
Three months ago, Google said it would invest €1 billion ($1.1 billion) to expand its data center infrastructure in the Netherlands at a facility in Agriport, located approximately 30 miles north of Amsterdam. An existing site about 130 miles further to the north, in Eemshaven, will also be expanded.
Joe Kava, vice president of Google’s Global Data Centers, noted that the Netherlands was attractive for its "...ample sustainable energy sources...". This is true as large scale wind farms and sophisticated hydroelectric resources when combined with a generally cooler climate allow firms to reduce their use of fossil fuels so saving money in keeping the vast arrays of computer servers at optimal running temperatures.
This comes on the heels of an announcement last year when Google unveiled plans to invest €1.5 billion ($ 1.65 billion) into its Netherlands data center operations. In the past two years that brings Google’s Netherlands investment to €2.5 billion ($2.75 billion).
The European expansion does not stop there. In May Google announced it planned to invest about €600 million ($660 million) in a new data center in Hamina, Finland. It already has a data center in Hamina on a site that was an old paper mill previously owned by Stora Enso. That project of 2009 carried a cost of €800 million ($880 million). One should note that Hamina is close to the Finnish border with Russia. where it invested 800 million euros to convert an old paper mill. Paper firm Stora Enso sold the site.
Google has not made a comment on the fact that Hamina is close to Russia. Instead they cite the efficiencies offered by the cooling system that uses seawater from the Gulf of Finland to reduce energy use.
It appears that demand for Google services is growing daily, especially in Europe. So, it should not be a surprise to learn that will make an additional investment of €3 billion ($3.3 billion) over the next two years to expand its European data centres.
On top of what has already be allocated to the sites in Hamina, there is to be an additional investment there €600 million ($660 million) so raising the total level spending at this one site to €2 billion ($2.2 billion).
The data economy across Europe is forecast to grow rapidly and so will add even more of a stimulus across the continent. The value of the EU data economy was estimated by the International Data Corporation (IDC) and the Lisbon Council as representing 1.90% of the EU GDP in 2018 and this is projected to rise to 5.4% by 2025.
Long-term growth in the number of enterprises that will actively use data is going to be highest in professional services and lowest in primary activities such as mining and construction.
Big data and analytics are a growing market, that is continuing to attract significant investment within European services groups. IDC found that organizations are increasingly taking a data-driven approach to running their business. They can exploit data as a business asset and build market share.
In data intensive areas the rapid use of meta data and ever more granular analysis of patterns and trends will be essential for corporations that seek to build a competitive edge in being first movers in new business opportunities.
However, I must not dismiss the builders as Luddites. Even here, so-called “smart” technology is being deployed at an increasing rate. The humble building brick can be fitted with radio-frequency identification (RFID) to convey information on the status of a building in terms of wear and tear or erosion and stability.
What I find concerning is that the IDC and Lisbon Council see a limited uptake of data across European education. This has serious implications for the future. One might understand that at pre-school and primary levels. Surely there should be a marked increase in the use of data at secondary levels.
Only at the tertiary stage in Europe is there a clear trend of the adoption of digital technologies. This may reflect the diversification of the undergraduate and postgraduate student population that has led to a need to cater for the rise in non-traditional students.
Google is not alone in building its investments in Europe. However, it does appear to be highly proactive in seeking solutions to serve a raid rise in the demand from European consumers and businesses.