While the industrial market has generally struggled in the wake of the economic crash, a new sector has emerged from within the market to take up some of the slack. In warehouses dotted around Dublin, information from the online community around the globe is housed in high-tech storehouses known as data centres.
Ireland is currently the fastest growing country in Europe in terms of data centre use and sophistication, according to technology giant Oracle.
While the office deals of companies such as Google and Facebook have hit the headlines, there has also been another, less-heralded side of the tech boom in the development of cloud computing and data centres. These and other firms require educated staff and prime offices, but they also need a tech infrastructure running in the background.
According to Maurice Mortell, Managing Director Ireland of global data firm Telecity Group, the increasing hunger for data can provide a big opportunity for Ireland. "Over the past decade, we have built up a very strong reputation for providing comercial data centres", he said. "The fact that big companies like Google and Microsoft are setting up large centre headquarters servicing the European marketplace is a very strong calling card. We are in the premier division now in terms of how we are percieved."
If you are a fan of online gaming or Netflix, you could well have used these services through one of Telecity's data centres. Formerly Data Electronics, a €100 million acquisition in 2011 folded the IT services company into one of Europe's largest data centre players, the Telecity Group. The firm now has three centres in Dublin, and as demand goes up, Mortell believes Dublin is well placed to take advantage. "We are only on the cusp of what is coming down the line in terms of requirements," he said. "Things like cloud computing and software as a service are only starting to get ramped up. We are in a really strong position to move from where we are".
While the market may have seen a big increase over the past few years, data centres in Ireland are nothing new. The sector began to gather pace in Dublin during the dotcom boom of the late 1990s, with a large number of developments aimed at servicing the expected growth in internet business demand.
But the dotcom crash of 2001 resulted in many European markets being left with distressed data centre assets and unfulfilled schemes, and Dublin was no exception. By 2006, growth in new data centre investment was re-established, with some large transactions from major US firms building up the market. This has carried through the current wave of new data centres led by local and multi-national co-location operators and the major US technology companies who are expanding their cloud operators.
According to Cathal Daughton, director of the industrial agency at Lisney, some unused industrial sites could prove to be good options for data centre developments, provided they have the right access to telecom communications networks and power. "For some buildings which are beyond their normal economic use, they could be transformed into a data centre and given a new lease of life," he said. "In Blanchardstown for example, the old Fujitsu building was taken over by Amazon. That was a building that at the time was useless, but Amazon fitted it out because they got such a good deal on it.
For Daughton, as lon as tech firms continue arriving in Ireland looking for office space, the demand for data centre locations should keep going up. "When companies like LinkedIn and Google come here and look for office space, they also require a data centre, he said. "These firms will look for an office first and could then look for a data centre. If other companies keep locating here there is no doubt that there will be a demand. Some could well rent space, or could develop their own facility."
The demand for cloud technology use, from corporate servies to things like Dropbox and Google Drive, has fuelled a new source of demand for services. On the back of this, Dublin has enjoyed considerable investment in new data centres led by the major corporates, although many operations are also house in co-location operator facilities.
According to a report by CBRE, the total investment in the data centre market sinces the beginning of 2011 has exceeded €200 million, and has involved the addition of 56,000 square metres of new data centre space. Google is one of these biggest players in the data market. Last September, it opened a €75 million data centre at Profile Park in Clondalkin. The centre hosts cloud computing services such as the Google search engine, Gmail and Google Maps. According to Google, it ranks among the most energy efficient data centres in the world.
Last year, Microsoft announced a major new investment in it's data centre in Clondalkin. The tech giant is investing 98 million in the 34,000 square metre facility at the Grange Castle Business Park, where it already has a centre.
Amazon, meanwhile, took over an old Tesco distribution centre in 2011 before converting the 22,500 square metre facility at the Greenhills Industrial Estate in Dublin 24 into a cutting edge cloud computing centre. The data centre market is no different to other parts of the property market, in that when occupiers are making decisions, it all comes down to locations. Data centres have a specific demand for connectivity, and more fibre connectivity is being added here through the Sea Fibre Networks and Hibernia Atlantic. Ireland's expanding connectivity and location are seen as big pluses, particularly among US corporates looking for the easiest point of entry into the European marketplace.
Many of the sames things that attract tech firms to Ireland are key to the data centre industry, particularly the attractive rate of corporation tax. The weather also gives us a big advantage in terms of energy efficiency - data centre operators take advantage of Ireland's climate by using an air cooling system which wipes out the need for energy intensive air conditioning units. Dublin's data centre market is unique in comparison to many of the established European locations, as growth in data centre facilities has evolved in two distinct areas - large scale corporate facilities and co-location operations.
As demand for data capacity increases, many smaller firms are also looking to take advantage of cloud networks. Rather than setting up their own centre, co-location -- essentially looking to take advantage of the digital economym as Cork also looks to build on it's already considerable multinational presence and establish itself as a technology hub.
According to Denis Collins a global sales executive at IBM and also the current Chairman for the not-for-profit independent business organisation it@cork, Ireland's IT industry hasn't reached it's full potential, and could yet grow to five times it's current size. He believes that with the right nurturing, locations such as Cork can take advantage as companies look to get smarter about how they store and use their data. "What is happening is that smarter data centres and smarter buildings are becoming very important," he said. "Where do you store data, how to you keep it secure, and how do you use it? Companies are challenged with operational costs, and by using smarter analytics, they can get costs and emissions down. Places like Cork and Dublin can become global hubs. We have the right multinationals and SMEs here to continue to make this a major cluster.
Chairman interview on Sunday Business Post
