5G, IoT, SaaS to drive Netherlands data centre growth


Deployment of IoT, SaaS and AI applications, fuelled by 5G deployment and government-backed initiatives including smart city projects, will drive data centre investments in the Netherlands over the next few years, according to a new Arizton Advisory & Intelligence research report.

The good news for enterprise technology professionals is that the growth is will lead to a wider range of hosting and cloud-service options. A major side benefit of the data centre  investments is that new power-saving technology will be implemented, according to Arizton, helping to solve power outage issues and curbing electricity costs.

The data centre market in the Netherlands at the moment includes about 30 unique third-party data centre service providers operating over 80 facilities, and there will be  investments in nearly 15 facilities that are expected to be operational in the next two to three years, according to Arizton.

Public cloud providers, colocation companies and  private enterprises will invest US$4.5 billion in data centres by 2027, with the market growing achieving a 6% compound annual growth rate during 20201-2026, according to the report, ‘Netherlands Data Center Market – Investment Analysis and Growth Opportunities 2021-2026


“The Netherlands is a mature data centre market in Western Europe and is a part of the FLAP [Frankfurt, London Amsterdam and Paris] markets, acting as a digital gateway to Europe. The country’s data centre landscape is thriving due to incre ased digitalization, connectivity, and sustainable development of data centers,” according to the report.


5G accelerates IoT, AI adoption

Deployment of 5G networks in particular is helping accelerate use of IoT, and AI applications, which in turn leads to heavier usage of data centres of all types: on-premises, hyperscale cloud, and colocation facilities, according to Arizton.

Government initiatives play a big part. “The Netherlands government is driving various initiatives for the development and usage of advanced technologies within the Netherlands,” Arizton told CIO Netherlands.  “The National Smart City Strategy by the government of the Netherlands is an initiative for the development of smart cities that will function using high-end digital infrastructure, and be initiated in cities such as Amsterdam, Rotterdam, The Hague, Utrecht, and Eindhoven.”

So-called smart cities deploy 5G and IoT networks to control infrastructure such as HVAC, utility and traffic-control systems. These systems often use AI applications to do predictive analysis and maintenance.

The Netherlands is already known as the most connected country in Europe. About 98% of Dutch households have Internet access, while more than 90% of organizations in the in the country have adopted cloud technology, with BFSI [banking, financial services and insurance], healthcare, education, hospitality, government, and transport sectors topping the list, Arizton points out.

In addition, the COVID-19 pandemic has been a significant contributor to cloud adoption in the Netherlands, with over 55% of the population working from home, thereby driving cloud adoption, Arizton reports.

 Public cloud revenue is expected to reach over $10 billion by 2026, with SaaS emerging as the leading revenue contributor, Arizton notes.

In particular, data centre growth will lead to an increase in deployment of colocation facilities that deploy OCP (Open Compute Project) open-source technology, implemented by global hyperscale providers including Google, AWS and Microsoft, as well as Dutch colocation players such as Maincubes, Arizton said.

Power technology is key to data centre growth

Growth of data centre options to meet new demand will need to be based in large part on sustainable-power technology, Arizton said.

“Netherlands faces power grid challenges in certain locations, such as Friesland, Gelderland, and Noord-Holland, with the accelerated growth of data centers being one of the reasons for the grid instability,” Arizton told CIO Netherlands, noting that the government had declared a pause, from mid-2019 to mid-2020, in issuing permits for new data centres built across Amsterdam and Haarlemmermeer, with grid instability being one of the concerns.

To deal with power problems, Arizton expects increasing use of monitoring and control technology.

“With the adoption of metered/switched PDUs that allow for real-time remote monitoring and control of connected loads, it enables data centre technicians to take real time action with respect to load balancing and, managing the IT environment efficiently to lower the OPEX of running the facility,” Arizton said.