Multinationals Seeking a Commercial Presence in Russia Push the Market Forward
With nearly 74 million users, Russia is Europe’s largest internet market. Given that figure, the metrics surrounding Russia’s data center industry are somewhat ambiguous. Consider that the country’s commercial data center market reached a modest $303 million in 2014, but has been growing at approximately 25 percent per year over the last five years, according to Direct INFO, a research consultancy.
In fact, as recently as eight years ago there were only half a dozen Tier I to Tier II commercial data centers in the entire country and these were largely operated by systems integrators. At the time, Russia’s technology talent pool lacked the necessary skillsets to build and operate modern data centers.
Today, however, Russia has no fewer than 180 data centers, most which are in Moscow. Sixteen of the 20 largest data centers in the country operate in the capital, each of which contains more than 1,000 racks and an average total capacity of 12 MW. Over the next several years, that number is anticipated to grow due to a confluence of factors, and not just in Moscow.
Government Regulations and Global Business Drive Growth
The data center colocation market, in particular, is being stimulated by government legislation, passed in September 2015, which forbid the storage of Russian citizens’ personal data on servers located abroad. Multinational and Russian financial institutions, as well as insurance and investment companies, are also facing new, more stringent regulations on international activity, which will increase the demand for premium data center services.
The other main drivers of the Russian colocation sector include a steady rise in demand for new white space, a growing interest among Russian enterprises in outsourced data center strategies, and an increasing number of international service providers and enterprises looking to establish a commercial presence in Russia.
With the development of enterprise branch networks, it also becomes desirable for companies to centralize the processing and storage of data using complex business applications, for example, ERP-and CRM-systems. Hence, commercial data centers will increasingly be used to centralize the IT infrastructures of global companies. Moreover, the use of commercial data centers will allow multinational firms to ensure the continuity of their business due to their high reliability.
On the Edge and in the Cloud
The owners of large-scale web projects, including search engines, web portals and social networks that generate a significant amount of traffic and number of users, also seek to locate their equipment closer to the end-user, or on the edge of the network, to reduce the costs of data transfer. These web-scale players are specifically interested in regional data centers. Read more here….
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