How regulations are impacting where we build datacentres today
- wandaserkowska1
- Apr 1
- 2 min read
Have you ever thought that WHERE we build #datacentre (DC) infrastructure is not any more influenced only by the laws of demand?
With recent almost daily news on new datacentres & giant investments in the industry the market is on a steep trajectory to beat all the odds.
✳️ So how this recent growth and increasing interest of investors have been shaped by regulations & laws ?
✳️ Will the impact continue good & bad in the future?
🌍 Data sovereignty:
Extraordinary game changer for countries with big local data and underserved DC market.
A great recent example: Kingdom of Saudi Arabia (KSA) Personal Data Protection Law (PDPL) of 2021 requiring personal data of individuals within KSA to be processed/stored within the Kingdom has made giant players like Oracle & AWS decide to deploy its cloud infrastructre locally in order to be able to serve the market, other major players & investors followed suit.
From a country with relatively few large scale facilities and projects, KSA became the fastest growing digital contender in the region and set to catch up with UAE very soon.
While initially stemming from the need for local data security & data control hashtag#datasovereignty regulation boosts development of local datacenters, cloud services, and other technological infrastructure, creating jobs and digital growth in the location where it is passed.
⚡Power constraints & moratoriums on new DCs:
Several years ago mature data hub locations such as Singapore or FLAPD (Frankfurt-London-Amsterdam-Paris-Dublin) issued restrictions to DC businesses expecting a negative impact on their real estate, power resources or challenging their existing local infrastructure (e.g. #powergrid woes in Amsterdam).
Moratoriums on new datacentres have been announced as early as 2019 (1 y in AM, 2 y in SG) and as new DCs planning cycle takes 3-5 years many big projects had to move to other locations with the industry quickly finding relevant location candidates. That’s how Malaysia & Indonesia found themselves an attractive "other" location bringing economic growth and infrastructure development into until-now-underserved areas by DC owners & operators.
These are just 2 examples of external "invisible" factors influencing locations where DCs can be built and are built. And most experts are agreeing we will see more of those as the industry grows.
✳️ How else local laws & resources' scarcity will shape the decisions of where and what to build?
↪️Bigger campuses to be built and further away from the busy metros, much more efficient, using more power, and bringing economies of scale from the campus' size.
↪️Countries with abundant land and accessible power (e.g. Finland, Malaysia, Indonesia etc.) will be winning bigger deployments for which years' ago they were not yet being considered having themselves smaller local data needs.
What further influence of new regulation can be expected in the future?
