CloudDatacentre

Bringing Your Data Home: Why Cloud Giants Are Building UK Data Centres

Sam Pudwell joined Silicon UK as a reporter in December 2016. As well as being the resident Cloud aficionado, he covers areas such as cyber security, government IT and sports technology, with the aim of going to as many events as possible.

IN DEPTH: Amazon, Google, IBM, Microsoft and Oracle are all investing in UK data centres. Why? And who are the other players?

The last 12 months or so has seen many of the major cloud players take up residence in the UK, with the likes of Google, Microsoft and IBM all opening infrastructure regions in London.

The capital is well established as one of the world’s key data centre markets, but it’s not the only place in the UK where activity is rife. Manchester is fast making a name for itself in the data centre space and areas such as Reading and Slough are also attracting infrastructure providers.

There are several reasons why companies would choose to establish themselves within the UK. For example, it’s an important factor for many UK-based businesses as it allows them to store data closer to home, a key consideration as data sovereignty issues continue to gain in prominence.

For regulated industries in particular, it allows them to benefit from local privacy regulations and now have to worry about their data being stored on foreign soil.

Performance could also be a factor. For financial institutions engaged in stock trading where milliseconds could make a huge difference, the improved performance and reduction in latency that comes with having localised data centres would be extremely valuable.

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Amazon Web Services

Of the four major cloud providers, Amazon Web Services (AWS) is currently the dominant force, boasting revenues of $3.5 billion (£2.8bn) in Q4 2016 and a profit of $926 million (£740m).

Those figures are both significant year-on-year increases – 47 percent and 60 percent respectively – showing just how important cloud has become to Amazon’s overall business.

Commenting on the news, Martin Garner, senior vice president of Internet at CCS Insight said: “During 2016 Amazon has considerably increased its investment in expanding its services across geographies, building up its logistics and increasing its video content. The company appears to be confident of growing demand and sees no external limits to its growth yet.”

As well as opening a new infrastructure region in Canada, AWS has strengthened its presence in the UK by opening data centres in London and launching a cloud training programme called AWS re:Start in an attempt to tackle a growing skills gap.

The company has been keen to emphasise the security of its platform, specifically targeting regulated industries such as health and finance that need to control where their data is stored.

Microsoft Azure

Microsoft actually got the jump on AWS in the UK when it opened its cloud data centres in London back in September to provide local support for its Azure and Office 365 services, with the Ministry of Defence and the NHS being among its initial customers.

Microsoft has since introduced several new features for UK-based customers to take advantage of. These include the release of ExpressRoute and PSN/N3 Connectivity for private internet connections, along with Azure Backup and Site Recovery.

The latter capabilities give businesses and organisations based in the UK a reliable way to protect their most important files ahead of the strict global data protection regulations (GDPR) set to be introduced next year, as well as ensuring the secure transmission of data transfers.

The only slight sticking point is Brexit, which Microsoft has warned could impact its data centre expansion plans in the UK if Britain’s exit from the EU results in higher tariffs on server hardware.

IBM

Despite an overall revenue decline, something that chairwoman, president and CEO Ginni Rometty has described as shrinking “by design”, the saving grace for IBM over the last couple of quarters has been its cloud division.

Revenue in its ‘Technology Services & Cloud Platforms’ section has continued to grow, as the company’s move to refocus on cloud computing and analytics has started to take hold.

“In 2016, our strategic imperatives grew to represent more than 40 percent of our total revenue and we have established ourselves as the industry’s leading cognitive solutions and cloud platform company,” said Rometty during the company’s Q4 2016 earnings announcement.

After opening its first UK data centre in 2011, followed by a second facility in 2014, IBM recently announced that it is planning to open four new data centres in the UK in an effort to meet growing demands from UK businesses.

This would treble its cloud capacity in the country, giving British customers access to Watson APIs, alongside IBM’s Blockchain, Internet of Things (IoT) and analytics platforms.

Read on about Google and Oracle on page two…