European co-location continues exponential growth The huge amount of e-business growth has caused demand for co-location space in Europe to outstrip supply, according to a report released by The Phillips Group (www.the-phillips-group.com).
Co-location is the physical locale where switching equipment for telecom carriers or ISPs is installed. Increasingly, co-location refers to the facilities owned by Web hosting companies, or application and Internet service providers, where companies, with sophisticated IT needs can situate Internet servers for content distribution.
While co-location has been available in the U.S. for a very long period of time, the industry is relatively young in Europe. With the Phillips Group predicting co-location market growth of up to $5.4 billion over the next 10-12 months, incumbent operators, global network providers, competitive local exchange carriers and large ISPs have begun to form strategic alliances to build and roll-out their own facilities.
A prominent example of this is the plan recently announced by British Telecom (http://www.bt.com), AT&T (www.att.com) and Concert (www.concert.com) to invest $2 billion over three years to deliver seamless, global e-commerce services through a network of 44 Internet data centers in 16 countries.
The data centers will be directly connected to the world’s most powerful and wide-reaching Internet backbone and will provide the wide range of Web hosting, application and networking professional services that are critical success factors for companies engaging in e-commerce.
While Internet data centers have already been rapidly rolled-out in Birmingham, Cardiff, Bletchley and St. Albans in the UK and in Madrid, Milan and Zurich, further plans are in the works to build-out more data centers in the UK, as well as Belgium, Portugal and Sweden within two years.
Beyond the European base however, BT, AT&T and Concert are targeting customers for Web hosting services in a global market forecasted to grow from nearly $4 billion in 2000 to more than $16 billion by 2004. The companies however realize that more than half of this growth will occur outside the U.S., indeed much of it in Europe.
According to research by IDC (www.idc.com), Western Europe is currently undergoing an explosion in both demand for and supply of robust hosting services because the needs of European customers are growing more sophisticated each day.
IDC forecasts the European Web hosting marketing will increase rapidly in value, from $907 million by the end of 2000 to over $5 billion by 2004. This exponential expansion is mainly driven by the fact that the growth of relatively low-cost broadband access methods has encouraged content providers to develop more storage-, processor-, and bandwidth-intensive offerings for more demanding end-users.
Peter Bonfield, the chief executive of BT concurs: “Our customers are demanding high speed, reliable and sophisticated global Internet services. Through this alliance we are demonstrating our commitment to delivering those services and our determination to be pre-eminent players in the global marketplace.
“The financial commitment we have made in Web hosting forms part of our Internet strategy to become the leading Web hosting and IP network provider by working with AT&T and Concert, our joint venture partners, as well as the leading companies in the market.”
C. Michael Armstrong, AT&T chairman and chief executive officer stated, “AT&T believes that Internet data centers are the ‘next generation central offices’ and we’re committed to working with BT and Concert to build the world’s leading global network of data centers. This announcement isn’t about real estate. It’s about moving more intelligence and content to the edge of the network and getting as close to your customer as possible – whether they need us in Amsterdam or Arizona.”
David Dorman, Concert chief executive officer, added: “Businesses are operating in a Web-based world. We’ve consistently promised our customers simple solutions and leading edge IP applications. Through our global networking capabilities and IP platform, we’re delivering on this commitment on a scale and scope unmatched by anyone in the industry.”
With this alliance, all involved companies will come closer to the goal of pushing content to all corners to the European continent by expansion of co-located hosting facilities, in turn increasing their respective market shares in the European co-located marketplace.
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