European Data Centres continue to attract new investment with table pricing but projected electricity increases of up 23%

London, 5th August 2008: European Data Centres continue to attract new investment with stable pricing but projected industrial electricity increases of up to 23 per cent for the first half of 2008 casts a dark cloud over the sector – finds Tariff Consultancy Ltd survey.

The latest edition of the quarterly “Data Centre Price Tracker,” published by Tariff Consultancy Ltd - a unique survey of Data Centre Per Rack pricing in 14 European countries (including for the first time the Czech Republic) - shows that even though Data Centre average Per Rack rentals fell by 2.4 per cent for the 3 months up to July 2008 new space expansion continues.

Since the start of 2008 there has been in excess of 100,000 square metres of new Data Centre development space announced across the 13 European countries. The majority of the new Data Centre development is focussed on the established locations in the UK, Netherlands, France and Germany.

Individual Data Centres led by the Pan-European Carrier Neutral Data Centre sector have recently increased their rates and now their Per Rack rental rates are charged at least a 10 per cent price premium to their Carrier Based Data Centre equivalent.

The quarterly survey also tracks industrial electricity costs across 8 European countries and the EU-15 average based on official data. It forecasts that industrial electricity costs will increase by 23 per cent over the first half of 2008 on average for the EU-15 countries.

Within the average picture there are a number of variations, with French electricity prices forecast to reduce by over 20 per cent and German electricity costs forecast to come down by almost 10 per cent over the same period.

Although the average Per Rack cost in the survey does vary from quarter to quarter as new providers are included there are clear differences emerging in Data Centre rental costs between countries.

Italy has the lowest average Per Rack cost of the 14 countries surveyed in July, followed by Germany (despite some price increases now taking place) and closely by the Czech Republic and Portugal.

The highest average Per Rack cost is Denmark, followed by the UK & Ireland. The UK is some 27 per cent above the European average Per Rack price based on the 14 country average in July. The UK also has industrial electricity costs (measured in kilowatt per hour) at just over 10 per cent above the projected EU-15 average cost.

“Industrial electricity costs are set to climb as a proportion of total operating costs, currently they are at 30 per cent of overall operating costs, but are likely to increase further placing a strain on Data Centre costs, said Margrit Sessions, Managing Director of Tariff Consultancy Ltd.

In general terms France appears to be the most economical proposition for companies looking to base their servers in Europe.

“The French Data Centre market offers the combination of relatively low Per Rack costs and the lowest overall electricity rates,” comments Margrit Sessions.

But even in the French market there is a wide variance in Per Rack pricing of up to 147 per cent, and in Germany rates vary by 243 per cent. There are also considerable differences with average Portuguese Per Rack pricing of 638 Euro per month against average Spanish Per Rack pricing of 833 Euro per month. In France Per Rack pricing is 825 Euro per month, 165 Euro less than average UK Per Rack pricing.

“Data Centre providers are right to be cautious about increasing their Per Rack prices in the face of rising power costs and economic uncertainty,” comments Margrit Sessions.

“For IT users in a Pan European market there are considerable cost benefits to be gained from locating in the lowest cost country with substantial space and energy savings. In many cases the cost of space is dramatically reduced by sourcing in a neighbouring country, for example France rather than the UK or Portugal rather than Spain,” she added.

But all IT and Data Centre companies are susceptible to the increase in power costs caused by the sharp spike in industrial electricity costs.

Note to the Editors

About the Data Centre Price Tracker and Tariff Consultancy Ltd

Published once every 3 months by Tariff Consultancy Ltd, at the price of GBP 895 for an annual subscription, the Data Centre Price Tracker consists of a survey of Data Centre Per Rack pricing in 14 European countries (Austria, Belgium, the Czech Republic, Denmark, France, Germany, Ireland, Italy, the Netherlands, Portugal, Spain, Sweden, Switzerland and the UK) for both Carrier Neutral and Carrier Based Data Centres. The survey also includes an update of industrial electricity costs in 8 of the main European countries and the average for the EU-15 group of countries.

Tariff Consultancy Ltd is a specialist research and consultancy company which provides a wide number of research reports and subscription services based on mobile, fixed line and Data Centre tariffs. Based in London Tariff Consultancy Ltd is the publisher of the Data Centre Price Tracker.