Dutch Data Centers

2016 State of the Dutch Data Centers

The new foundation

Edition Editor-in-Chief State of the Dutch Data Centers 2016: Stijn Grove June 2016, year 2 Managing Director Dutch Datacenter Association Contributions Dutch Datacenter Association (Stijn Grove, Noor van den Marketing & artwork Bogaard, Luuk ter Weeme) Noor van den Bogaard (DDA) PB7 Research (Peter Vermeulen) Michiel Cazemier, Gaby Dam, CBRE Data Centre Solutions (Mitul Patel) Wouter Pegtel (Splend)

Research by Print quantity Peter Vermeulen First release, 14 Jun 2016: 100 Principal Analyst PB7 Availability Our publications are free to download on Mitul Patel www.dutchdatacenters.nl Associate Director CBRE DDA thanks all people who made this report possible. A special thanks to Simon Besteman, Micky van Vollenhoven and Marc Gauw.

TERMS OF USE AND DISCLAIMER The Dutch Data Center Report 2016: State of the Dutch Data Centers (iii) accept no liability for any use of the said Data or reliance placed on it, (herein: “Report”) presents information and data that were compiled and/ in particular, for any interpretation, decisions, or actions based on the Data or collected by the Dutch Datacenter Association (all information and data in this Report. referred herein as “Data”). Data in this Report is subject to change without notice. Other parties may have ownership interests in some of the Data contained in this Report. The Dutch Datacenter Association in no way Although the Dutch Datacenter Association takes every reasonable step to represents or warrants that it owns or controls all rights in all Data, and ensure that the Data thus compiled and/or collected is accurately reflected the Dutch Datacenter Association will not be liable to users for any claims in this Report, the Dutch Datacenter Association: (i) provide the Data “as brought against users by third parties in connection with their use of any is, as available” and without warranty of any kind, either express or implied, Data. including, without limitation, warranties of merchantability, fitness for a particular purpose and non-infringement; (ii) make no representations, The Dutch Datacenter Association, its employees do not endorse or in any express or implied, as to the accuracy of the Data contained in this Report respect warrant any third-party products or services by virtue of any Data, or its suitability for any particular purpose; material, or content referred to or included in this Report.

Colophon 4 Preface 7 About the report 8 Executive summary 9

The new foundation Data centers 11 Data center types 12 How a data center works 13 Infographic 14 Data center expertise 16 Data center customers 18 Regional data centers 19 Digital hub 21 Campuses 22 Digital Gateway to Europe 24 Representation 26 Related associations 28 Digital clusters 29

Market research State of the Dutch market - PB7 31 Key EU data center market - CBRE 41

Impact Effects on the economy 47 In- and outbound 48 Sustainability 49 Energy use 50 Trust 51 Future trends & growth 52 Data center myths 56

Recommendations

10 + 1 Recommendations 59

About Dutch Datacenter Association 63 PB7 66 CBRE 67

The Dutch data center sector is in excellent shape. Every online service originate from data centers. The online sector is growing rapidly and so is the data center industry. Especially in the Netherlands as it is the Digital Gateway to Europe. The reality is that without data centers our economy comes to a halt. Data centers are therefore the main enablers of the digital economy. They are the new foundation.

Digital services play an increasingly important role in our lives and the economy. Data centers are essential for these services to operate properly. All these online services, such as cloud, mobile apps and other digital applications are provided from within data centers. Data centers thus form the foundation of our (digital) economy.

Data centers underpin a wide spanning range of activities across government, business and society. They form an important part of our national critical infrastructure.

A whole ecosystem grew inside and around the Dutch data center precense and that is why many industry giants in the cloud, internet, hardware, and data industries choose the Netherlands as the ideal digital hub to operate from.

With this annual report, the second time it is published, the Dutch Datacenter Association would like to emphasize the importance of this crucial industry and provide insights into how this sector works, grows and what its challenges are, as it is destined to play a crucial role in the future growth of our economy.

Stijn Grove Managing Director Dutch Datacenter Association

The Dutch Data Center Report is annual study initiated by the Dutch Datacenter Association. The main focus is to provide a quantitative overview of the Dutch multitenant data center market, the Netherlands as Digital Gateway and the direct and indirect way the data center industry impacts the Dutch (digital) economy.

The report is a combination of research exclusively done by PB7 Research, CBRE Data Centre Solutions and the Dutch Datacenter Association itself.

It focuses on data centers that rent out data center space in the form of housing or colocation. Many of these data centers will also offer hosting services. Not included are single tenant data centers that house server racks for internal use. Major hyperscale data centers from digital giants such as Microsoft and Google are also not part of the scope.

Data centers are the foundation of our digital The Amsterdam metro is responsible for 64% of all economy multitenant datafloor in The Netherlands. As a location, Digital services play an increasingly important role in our it brings multiple benefits, including one of the biggest lives and the economy. Data centers are essential for these internet exchanges in the world, excellent connectivity, services to operate properly. Online services such as cloud, low energy costs, a stable energy grid and an world class mobile apps and other digital applications are provided infrastructure for international business. from within data centers. Data centers thus form the foundation of our (digital) economy. The Digital Gateway to Europe is considered as the 3rd international hub (‘mainport’) of the Netherlands next to Having a strong data center infrastructure has the Port of Rotterdam and Schiphol Airport. become crucial to any economy The Netherlands has one of the strongest data center Future (challenges) infrastructures in Europe. Over 90% of organizations in the In both the internationally oriented Amsterdam Metro Netherlands have high quality data center facilities at less and the regional datacenter markets, we predict long term than 30 minutes drive. continued growth. The data explosion and continued rise of online services drive a steady data center demand. We have identified 271.000 square meters of multitenant Two thirds of all data centers expect to rent out more datafloor, an increase of 5% compared to the Dutch meters over the next 12 months, and only 18% expects Datacenter Report 2015. Most of the growth can be a decrease. On the other side, Dutch businesses expect contributed to the metropolitan area of Amsterdam, while a strong shift away from using compute and store out of most regional data centers have actively improved their their internal datacenters towards colocation, hosting, and utilization rates. the cloud.

The Digital Gateway to Europe For our economy, the direct and indirect effects are huge. As the fastest growing data center market in Europe, It is of the utmost importance to safeguard the growth of the Digital Gateway to Europe is the place in Europe to this sector. Focus, support and a balanced approach by our distribute your data. Centered around the Amsterdam government is needed for this fast growing industry. Let’s Metro region data centers have grown with an average of continue and build on our lead. 15% per year for the last 5 years. Due to the steady high take up all data centers are constantly expanding their supply to keep up.

“DATA CENTERS ARE THE NEW FOUNDATION”

>>>>>>>>THE NEW FOUNDATION >>>>>>>>>>>>>>

What is a data center? Key functions of data centers Data centers are relatively new in our urban landscape. In fact, many people are unaware that they even exist. A data 1. Reliability center is a facility, often an anonymous-looking industrial A professionally managed data center has backup systems building, used to house computer systems and associated that are too expensive for most businesses to purchase and components, such as connectivity and storage systems. maintain. Redundancies in cooling, power and communication systems ensure the constant connection that is essential It generally includes redundant or backup power to any business. Constant up-time means uninterrupted supplies, redundant data communications connections, access to your organizations data and servers by staff and environmental controls (air conditioning, fire suppression) customers. and various security devices. Large data centers are industrial scale operations. 2. Energy efficiency Data centers bring huge efficiency benefits. By concentrating The importance of data centers IT equipment in one place and by operating data center Data centers are the main enablers of the digital economy. facilities more professionally huge amounts of energy are Data centers underpin a wide range of activities across being saved compared to on-premise situations. Without government, business and society. They form an important data centers our society would use more than double the part of our national critical infrastructure and bring energy amount of energy to what is used now. efficiency. The Netherlands is benefitting greatly as Dutch data centers grow with double digits every year and are a 3. Cost magnet for bringing foreign investment and indirect growth. A data center is a low-cost solution to getting high-end equipment and service. If your IT department had to fund everything that you get from colocation – a clean room, redundant systems, around-the-clock monitoring – you “DATA CENTERS ARE would devote much of your company’s total budget to THE MAIN ENABLERS keep the servers operational. When you colocate, you get exceptional data center equipment at a fraction of its total OF THE DIGITAL cost. And what are the costs when your IT, hence your ECONOMY” complete company is unable to work? 4. Scalability Everything that happens online originates in a data center. When you devote part of your office space to server cabinets Data centers form the heart of the digital infrastructure and other IT equipment, expanding that area becomes a >>>>>>>>THE NEW FOUNDATION >>>>>>>>>>>>>> and are its foundation. This infrastructure includes Internet challenge as your business grows. With data center space or Exchanges, Cloud Exchanges, Cloud providers, Webhosters, colocation, you have flexibility to expand your requirements, Internet Backbone Carriers, Content Delivery Networks, paying only for the space and power you need and only when Internet Acces Providers and Fiber Operators. All centered you need it. in data centers to make the internet and online services possible. 5. Risk Management Emergencies happen, but when your mission-critical In simple terms: Our current lives would grind to a halt equipment operates off-site, it doesn't have to adversely without data centers. impact your business. Colocation is a good strategy whether you use your data center as a primary home for your servers or as a mirror site to ensure constant connectivity during an emergency. Think of a data center as another basket, located away from your office, for your most important eggs.

A. Regional and national data centers Throughout the country regional data centers provide a platform for organizations to compute, run and store their services and data. Nowadays, organizations rely heavily on online services, which is why a regional data center can be found in every province in the Netherlands. From the north of Groningen to the deep south of the province of Limburg.

Most Dutch data center operators have two or more locations providing geographical redundancy in-house. Only two Dutch data center operators have a truly national network of data centers.

B. International data centers The Netherlands is the place to distribute online services in Europe: the Digital Gateway to Europe. Its central location, open economy and most of all its unrivalled connectivity and internet exchanges make the Netherlands one of the most advanced international data center markets in the world. It’s currently Europe’s fastest growing data center market.

The data center space offered mainly consists of retail colocation, i.e. customers leasing space within a data center, usually one or more racks or caged-off areas. What is also offered is wholesale colocation: A tenant leases a fully-built data center space. Most of the data centers are located in the Amsterdam Metropolitan Area (MRA), with almost 100 data center locations, multiple internet and cloud exchange points. Unique are the three data center campuses within this area: Science Park, South- East and Schiphol campus.

C. Hyperscale data centers Hyperscales are huge, single tenant data centers. Build for the world wide operating internet companies that are large enough to build their own data center. Hyperscales are built in places where costs are low, with the supply of enough green power and were heat exchange is possible.

Apart from being a Digital Gateway for commercial data centers, the Netherlands is unique being a “hyperscale country”. Massive hyperscale campuses are located in the province of North-Holland, just above Amsterdam, and in the Groningen area, the most northern part of the Netherlands. The world's major Cloud providers choose the Netherlands for their online services.

“THE NETHERLANDS HAS ONE OF THE MOST ADVANCED DATA CENTER AND HYPERSCALE MARKETS IN THE WORLD”

Wholesale and retail data centers generators, fire suppression and environmental operations. In a wholesale data center, a company leases out a fully The wholesale data center is aimed at the bigger players; provisioned facility for its own dedicated use. In a retail data the general guide is that it works cost effectively at an IT center, a company rents a part of the data center, where it can equipment power requirement of 1MW or greater. Not place its own IT equipment within racks and rows. exactly your average business data center.

Compared to an owned data center, wholesale colocation Retail colocation offers great flexibility in how the IT platform allows a company to avoid managing the issues of building grows or shrinks over time, as facility costs and capacity are and running a facility: maintenance, power provisioning, shared across many lessees. Retail data centers are generally connectivity, uninterruptible power supplies and auxiliary better for companies with minor to medium IT requirements.

A data center is a purpose-built complex technical facility. All to provide a secure, highly efficient place to house computer systems, connectivity and storage systems that should function without interruptions. Below are the main components that allows the data center to makes it customers happy.

Security Batteries Mission-critical facilities face unique challenges to ensure the Batteries can provide power during short outages. When security of both digital and physical assets. Whether a data electricity fails completely, power is delivered via this center supports a single client or provides hosted services for uninterruptible power supply (UPS) until the emergency thousands, they are responsible for the sensitive information standby system is active. The UPS apparatus also compensates their customers rely on to conduct their business. A data for voltage fluctuations and distortions. However, batteries center has fencing and a secured gate to keep unwanted cannot on their own bridge the gap for power outages that visitors out. In addition, multiple video cameras, CCTV last longer than a few hours or days. cameras. monitor the exterior premises and the building. The cameras are arranged in such a manner that one camera also Cooling units monitors another one. This means that, should a neighboring High-efficiency cooling units remove the heat emitted by the camera fail, continuous monitoring is still assured. air-conditioning system and release it into the outside air via heat exchangers on the roof. Data halls Data halls, or server rooms, house standard servers and Heat exchangers storage units. The racks are often kept in an enclosed area to Located on the data center’s roof, heat exchangers release enable optimal cooling. Additional fencing, caging, is used to excess heat from the turbo-cooling units into the air. When raise the level of physical security. Data halls are only entered outside temperatures are high, the exchangers are sprinkled into sporadically and for short periods of time. with water to increase the efficiency of heat dissipation.

Fire extinguishing Monitoring All data halls are equipped with smoke detection systems Control stations for the building security and data center that monitor the room 24/7. In the event of a fire, water, facilities serve as central commands in the data center. All extinguishing foam, or powder fire suppression systems can important information is gathered via a DCIM (Data Center cause more damage in a data center than a charred cable. Infrastructure Management) system and displayed on large This is why, special extinguishing gases are preferred. An screens. Any variation from standard operation is promptly extinguishing gas, reduces the oxygen content in the air, which reported. smothers the fire’s source. It is harmless to people and the equipment. Meet-Me-Rooms Connectivity is key for a data center. Without it a data center Diesel generators is without use. All connectivity comes together in Meet-Me- When a power outage occurs, the diesel generators start up Rooms, there will be a minimum of two per data center for automatically within seconds. While the generators go through redundancy reasons, and from there it is distributed to the a short start-up phase, batteries deliver power allowing server rooms. operations to continue uninterrupted. The diesel generators then take over and provide the complete power supply for the data center.

Dutch data centers: 206 DATA CENTERS Of which: 156 > 100m2 IT floor 64% ... and 117 > 400m2

Total 271.000 m2 net surface

64% of all data centers of the EU key are located in the Metro data center Amsterdam 20% market Amsterdam Campuses METRO AMSTERDAM Science Park, South-East, 5 year average West, Schiphol data center growth

Other hotspots 1 Rotterdam, Eindhoven, Fastest Groningen growing data center DUE TO DATA CENTERS market in Europe until 2020 a 10-20% decrease in ICT-related energy consumption is forecast 82% relative to 2013. Occupancy rate ENERGY PRICING Most competitive pricing of all key markets in Europe

CONNECTIVITY Netherlands is home of (HYBRID) CLOUD OUTSOURCING SAAS GAMING IOT BIG DATA 2 Hyperscale campuses

Projected increase Server-racks still from 21% to 42% 70% located on-site 42% in data centre outsourcing In 5 y ears time this will drop t o 50%

2015 RECORD YEAR AMS-IX: AMS-IX 792 members 127 New members 127 27% growth of internet traffic NL-IX 564 members

In Western Europe the number 2nd year the of IoT devices will quadruple Dutch Data Center 4X between 2015 and 2021 Report is published

DATA CENTERS: FOUNDATION FOR THE (DIGITAL) ECONOMY

A data center is a complex crossroad of many different fields of expertises. Although data center staff is normally limited in numbers, the knowledge areas in which they need be skilled are not. Below are the important areas of expertise.

IT sector Real estate Data centers excist through customer demand. ISV’s, Cloud A data center is also known as ‘digital real estate’. A data providers and direct customers all have different needs in center leases wholesale, retail space or racks to its customers. a disruptive market. Data center personnel need to have extensive IT knowledge to serve the customer. Also in the Finance data center sector, the customer always comes first and is Data centers are expensive to build. A large data center can always right. cost in excess of 150 million euros. Hyperscale data centers can exceed one billion euros. These huge investments require Technical facilities excellent knowledge of financial markets and possibilities of, A data center is a highly technical building. The technical for instance, financial lease constructions. facilities need to be in perfect condition, operated efficiently and get updated regularly in accordance with the latest Certifications standards and regulations. In the data sector it is common to be certified in different areas. As a data center house critical IT systems, it needs to Power provide its customers with assurance that it meets certain Power is the main “fuel” and main cost for data centers. The claims. The most important certifications are: less power data centers use, the lower their costs and the better it is for the environment. To always maintain focus on this up-to-date knowledge of the energy pricing, laws and IS0 27001 Information security management regulations, energy efficiency and green energy are key. ISO 9001 Quality management Security To earn the trust of its customers a data center must be highly ISO 14001 Enviromental management secure. Perimeter fencing, security gates, CCTV, 24/7 guards but also strict security processes are needed to maintain this PCI-DSS Credit card payments trust. SOC1 Financial and internal controls covered by Connectivity ISAE3402/SSAE16 (prev. SAS70) Without connectivity data centers can’t operate. Extensive knowledge of Fiber carriers, Backbone providers, CDNs and LEED/BREAM Green building certification Internet exchanges is needed. This alongside other connectivity as Cloud, Ad, Mobile data, Media exchanges and knowledge of (in-house) patching.

BLOCKCHAINS VIRTUAL REALITY AGRITECH ARTIFICIAL INTELLIGENCE SCALE UPS E-COMMERCE BIG DATA ANALYTICS SMART HOMES GOVTECH HOSTED VOIP OFFICE TOOLS SELF-DRIVING CARS SMART CITIES GAMING HYBRID CLOUD SECURITY EHEALTH ROBOTICS EDUTECH PERSUASIVE COMPUTING BUZZ ANALYTICS OPEN ENTERPRISE DIGITAL GLOBALIZATION ENERGY EFFICIENCY INTERNET OF THINGS TRUST FINTECH PUBLIC CLOUD SAAS START UPS

“THE GROWING IMPORTANCE OF “DIGITAL” DEMANDS INCREASED FOCUS ON THE CONTINUITY OF IT SERVICES”

Commercial data centers have three major customer groups: 1. Hosting/Cloud providers 2. ISVs/SAAS providers 3. Direct customers

1. Hosting and Cloud providers Hosting and Cloud Providers provide IT infrastructure and platform services to third parties. The customers can be end customers of SaaS providers. Popular services are Infrastructure as a Service (IaaS), offering computers—physical or (more often) virtual machines or Platform as a Service (PaaS), allowing customers to develop, run, and manage applications without the complexity of building and maintaining the infrastructure typically associated with it.

2. SaaS providers SaaS stands for Software as a Service. SaaS is sometimes referred to as “on-demand software” and is usually priced on a pay-per-use basis or using a subscription fee.

In the SaaS model, application software is installed and operated in the data center and users access the software from their premises. SaaS users do not manage the IT infrastructure and platform where the application runs. This eliminates the need to install and run the application on the user’s own computers, which simplifies maintenance and support.

The ISVs, Independent Software Vendors, have now almost all switched to a SaaS model.

3. Direct customers These are companies or organizations that outsource (part of) their IT to a data center. These can be governmental, businesses and non-profit organizations. The customer outsources their compute, storage, security and networking equipment to the data center.

With the growing importance of “digital” and the continuity of IT services more and more organizations are increasingly opting for external housing of their IT infrastructure at a data center provider. Preferably organizations around the corner, as organizations don’t want to ‘lose control’ over their IT systems. A data center in the region is able to service regionally-based companies and local governments to meet that need. Recent research of the Dutch research company PB7 shows that the demand for regional colocation services is increasing.

Innovation hotspots Every province in the Netherlands has multiple data centers. Regional data centers profit from being located in the proximity of a digital innovation hotspots, where all kinds of digital players and startups can interconnect. What is so unique to the Netherlands, is that if you want to find a high quality, tier-lll level data center within a 30 minute drive, there are hardly any blind spots. Apart from the Amsterdam notable data center campuses, there are those in the Rotterdam, Eindhoven and Groningen region.

Regional data centers obviously look for local opportunities. They often expect to find business with local businesses, healthcare or education, but have grown as a result of the business from local IT service providers, hosters and (cloud) software vendors. As a result, regional data centers do well when they are located at digital innovation hotspots, where all kinds of digital players and startups can interconnect.

Well connected Need for connectivity is no longer an argument for specifically choosing colocation data centers in Amsterdam. All regional DDA data centers are carrier-neutral and many offer IX services. With the current fiber technology, a regional data center is also only a few milliseconds away from the major Internet exchanges in the Amsterdam area. For SMEs and Enterprise organizations this is a negligible number.

Regional data centers bring huge efficiency, scalability and flexibility benefits and provide a primary home for your servers at all times.

DDA Datacenters 2016

In Europe, having high speed internet access is now very common. Almost everywhere in Europe people and organizations go online via fixed and/or mobile broadband. The underlying infrastructure that makes it all possible to surf the web is called the digital infrastructure. The infrastructure that makes the internet work.

Digital infrastructure The digital infrastructure is the combined fixed and mobile access networks, data centers, cloud & hosting providers, domain name registrars, internet exchanges, content delivery networks, etc.

Part of the digital infrastructure are international digital hubs, these are only present in a few countries around the world. These digital hubs are international intersections of connectivity and are the key commercial multi-tenant data center markets.

Digital Hub Digital hubs consist of international backbone-, fiber- and IP-carriers, data centers, internet exchanges and major cloud providers. They have developed into an unique ecosystem of infrastructure, customers and suppliers.

The Netherlands is one of the most important Digital Hubs in the World. The Digital Gateway to Europe is centered around the Metro Region of Amsterdam. In the Netherlands it is seen as the 3th international hub, Mainport, next to the Port of Rotterdam and Schiphol Airport.

Near the Digital Gateway For companies less dependent on latency or the need of being next to the special digital hub ecosystem, just being outside the Amsterdam region is good enough and in almost all the cases still better than anywhere else in Europe. As the Netherlands is a small country, this immediately means basically all of the Netherlands. Notable data center hot spots are: Rotterdam, Groningen and Eindhoven for commercial data centers.

Apart from multi-tenant data centers, the Netherlands is also home to hyperscale data centers. Main campuses are Agriport, north of Amsterdam and Eemshaven, Groningen in the north of the Netherlands.

"AS THE NETHERLANDS IS A SMALL COUNTRY, PEOPLE VISITING THE NETHERLANDS SOMETIMES REFER TO THE WHOLE OF THE NETHERLANDS AS ‘AMSTERDAM’."

Commercial data centers/colocation Locations: Amsterdam, Rotterdam, Groningen, Eindhoven

Links: www.dutchdatacenters.nl www.digitalgateway.eu

Amsterdam Metro Region Locations: Science Park, South-East, Schiphol, West

Links: WEST www.dutchdatacenters.nl SCIENCE PARK www.digitalgateway.eu

SCHIPHOL SOUTH EAST

Hyperscales Locations: Wieringermeer (Middenmeer) Eemshaven

Links: www.agriporta7.nl www.dataports.eu www.nxtvn.com

All data centers can be found online. Visit the Dutch Data Center Map: www.dutchdatacenters.nl/map

AMSTERDAM-NORTH

AMSTERDAM 300 km/ 186 m

AMSTERDAM-SOUTH

GIVEN ITS AGE, THE INTERNET ECONOMY HAS ALREADY A LARGE IMPACT ON THE DUCH ECONOMY AND IS GROWING AT A RAPID PACE RELATIVE TO OTHER GROWTH ENABLERS

#FTE (K) Annual Growth ‘07 - ‘13 Port of Rotterdam - The Port of Rotterdam is contributing to 3,8% 1841 of the Dutch GDP - The Port is contribu- ~1250 2014 ting to 2,3% of the 1% country employment Amsterdam Schiphol Airport - Schiphol is contributing to 3,4% of the Dutch 1661 GDP - The airport is contributing to 2,1% of 1916 2014 2% the country employment Internet Economy - The internet economy is currently adding to >1002 5,3% GDP - Employment in e-commerce cloud and Digital 1995 2014 7-9% Infrastructure is estimated to be 1,5% of total employment

Source: Slides from the 2014 Deloitte report on the Dutch Digital Infrastructure: www.digitale-infrastructuur.nl

Digital Gateway to Europe is home to several large internet exchanges and has the fastest growing data center industry in Europe. The digital hub consists of connectivity, data centers and cloud providers.

Connectivity Internet Exchanges Digital Gateway to Europe is home of three(!) of the largest exchanges in the world: AMS-IX is the second largest internet exchange in the world in terms of traffic and has almost 800 members. The second largest Dutch internet exchange, the NL-IX, is number 7 in the world. The world number 6 exchange, Equinix IBX, is also present at several locations.

Connectivity Backbone Fiber & IP carriers The metro Amsterdam area is known of its perfect fiber connectivity. With a large national network and many sea cables landing in the Netherlands we are directly connected to, for instance, the USA. Many customers only use fiber and operate and maintain the optical equipment themselves.

The major leading fiber providers leading are Eurofiber, EU Networks and Relined. The top IP backbone carriers present are NTT, Cogent, Level3, GTT, Hibernia and Telia Sonera. Companies who choose the Netherlands as their digital hub enjoy the lowest average latency throughout Europe.

Connectivity In-house connectivity Organizations choose to rent space in certain data centers because of other relevant parties, verticals, CDN’s, cloud connects, etc. that rent space in that data center. In-house cabling connects them together.

Data centers Colocation Unique about the Amsterdam region are the multiple data center campuses near to each other. The Science Park campus (where it all began), the South-East-West Campus, and the Schiphol Campus.

Cloud providers International large cloud players The Netherlands are the only European country in which three out of the four top public cloud players are present with their own large data centers. Providing superior Cloud connections for Enterprise, Media and ISVs.

‘The third mainport’ At the end of 2015 the Dutch parliament recognized the Digital Gateway as the third mainport of the Netherlands. ‘Mainport’ is a Dutch word meaning an intersection of major transport routes. The closest English word is hub.

The motion submitted by member of parliament Kees Verhoeven (D66) stated that the Dutch government should develop an economic vision with the relevant stakeholders and implement this vision to strengthen the position of the digital hub.

The adoption of the motion was an important milestone and great support for the Digital Gateway to Europe.

“TO STRENGTHEN THE ’THIRD MAINPORT’ IS A NATIONAL PRIORITY”

24 | © 2016 Dutch Datacenter Association Diamond encrusted unicorns The Netherlands is known for its ideal position as a launch pad to the rest of Europe. With its central location and perfect connectivity it has the best average latency times to any location in Europe to distribute data.

The well-developed digital ecosystem has attracted many foreign companies entering the European market. These include Google, Softlayer, GoDaddy, Huawei, Microsoft, Netflix, Uber and NetApp to name a few. Apple, to give one more example, has chosen to distribute all of the company’s software updates in Europe through the Netherlands.

Strategically located at the center of Europe’s largest markets, the Netherlands has also established itself as a magnet for international companies and a leading site for European or regional headquarters. A stable country with a supportive corporate tax structure, a highly educated, multilingual workforce and a superior logistics and technology infrastructure, the Netherlands offers companies a perfect climate to compete successfully in Europe. And with attractive quality of life.

For scale-ups, Fortune 500 leaders, diamond encrusted unicorns, small to mid-sized business, the Netherlands is a smart choice to locate international headquarters. Just ask major players like Cisco Systems, Palo Alto Networks, Netflix and Tesla or smaller operations like Optimizely, DoubleDutch, Advantech, Sun Pharma and Lux Research. Regardless of size, there’s nothing small about the results businesses see here.

Digital Gateway to Europe organization The Digital Gateway to Europe organization is an industry & government backed initiative to promote the Netherlands as the Digital Gateway to Europe and orchestrate all activities around the digital hub.

It helps foreign companies that want to come to the Netherlands and helps Dutch digital companies that want to go abroad, it organizes trade missions and trade shows and provides training about this new sector.

Main activities: • Portal Digital Gateway to Europe • Trade missions • Trade shows • Industry events • Reports & documentation • Education • Support & consultancy services www.digitalgateway.eu

"THE NETHERLANDS HAS THE LOWEST AVERAGE LATENCY FOR DATA DISTRIBUTION THROUGHOUT EUROPE."

More general information about investments in the Netherlands: www.investinholland.com

In only 20 years the data center sector has grown to become an industry of major importance worldwide and especially in the Netherlands. For many years this sector was almost unknown to the general public and government. You can say that the data center industry grew to its current size completely under the radar.

In general internet related companies were for a long time not represented on trade association level. As the internet grows very fast and tends to be disruptive this sector did not connect to the existing traditional ICT and telecom sector and still feels different from it.

Only around five years ago representation changed in the Netherlands, as Cloud and Webhosting providers started organizing themselves. In 2014 the other data centers followed and the Dutch Datacenter Association, the national trade association for commercial data centers, was formed. It currently represents almost all Dutch data centers and is the primary voice of the sector.

In the Netherlands we have a tendency to organize things. We have vertical or horizontal representations of every sector in our economy. All these groups and associations work together via the famous Dutch polder model. The polder model looks for solutions by “cooperation despite differences” for a greater purpose.

To make a more effective representation and to form one voice towards government, all parties in the digital infrastructure: data centers, internet exchanges, domain name registrars, internet backbone and access providers, cloud and hosting providers, formed an umbrella organization called DINL (Digital Infrastructure Netherlands).

“THE DUTCH DATACENTER ASSOCIATION IS THE NATIONAL TRADE ASSOCIATION FOR COMMERCIAL DATA CENTERS”

26 | © 2016 Dutch Datacenter Association Dutch Datacenter Association The Dutch Datacenter Association (DDA) is the national trade association for commercial data centers. It’s the representative of the successful Dutch data center sector, the foundation of our online digital economy and Europe’s Digital Mainport: Digital Gateway to Europe. With almost 90% of all commercial data centers in the Netherlands being a member, the DDA is the voice of the industry.

Activities of the Dutch Datacenter Association:

- Driving awareness of the industry towards stakeholders such as government, the media and society at large. Expressing the views of the industry with regard to regulations and policy issues.

- Promoting the image and the economic importance of the data center industry. In the short as well as in the long run. The DDA publishes many publications including the annual Dutch Data Center Report.

- Leading by facilitating members to boost operational improvements in the form of best practices, promotion of education and contributing to technical standards with which the data center industry in the Netherlands and beyond can make the difference.

For the Dutch Datacenter Association cooperation is key. Therefore we are active participants of: - Digital Infrastructure Netherlands (DINL) - Digital Gateway to Europe (DGWEU)

Board of Directors: Michiel Eielts - Chairman (Equinix) Eric Boonstra - Secretary (EvoSwitch) Michael van den Assem - Treasurer (Interxion) Gerben van der Veen - Member of Board (Dataplace)

Executive Board: Stijn Grove, Managing Director

For more information visit our website: www.dutchdatacenters.nl

From left to right: Rob Stevens (Interconnect), Jeroen Stevens (Interconnect), Wim van de Donk (King’s Commissioner of North Brabant), Michiel Eielts (DDA), Stijn Grove (DDA).

NL - Digital Infrastructure Netherlands NL - Digital Gateway to Europe (DGWEU) (DINL) Digital Gateway to Europe is the industry and government DINL the federation/umbrella organization that represents backed organization promoting the Netherlands as the Digital the parties that provide the facilities necessary for the digital Gateway to Europe. DGWEU promotes and orchestrates economy: data centers (DDA), cloud and hosting providers, Mainport DINL backed, from the industry for the industry. It is internet access providers, internet exchanges, registrars, NLnet the central source of information about the hub with reports, and SURFnet. factsheets, contacts, maps and news.

The Digital Infrastructure Association (DINL) is committed to The Dutch are also famous for trade, logistics, reliable the strong, ongoing development of the Netherlands as the and comprehensive infrastructure and open and business hub within the international digital infrastructure. With our friendly orientation. Ideally located in the heart of Europe digital economy the Netherlands is at the forefront of the and connected directly via many sea cables to, the United sector and there is still much more potential to be realized. States. With multi-campuses and home of the largest internet exchanges in the world. These are the reasons why the The organization puts the Netherlands on the map as Netherlands appeals to such diverse industry giants in the international digital hub, guides government, companies and cloud, internet, hardware, and data industries as the ideal data citizens in the digital economy and highlights the opportunities hub (‘Digital Mainport’): the Digital Gateway to Europe. and challenges. It is the first point of contact for anything happening in the digital infrastructure. At the end of 2015 a majority of the Dutch parliament recognized the Digital Gateway as the third major international DINL is neutral and non-discriminatory: an open digital market hub of the Netherlands after Schiphol airport and the seaport where all participants are treated equally, this is the philosophy of Rotterdam. behind everything we do. www.digitalgateway.eu www.dinl.nl

"DIGITAL GATEWAY TO EUROPE REPRESENTS AND PROMOTES THE DIGITAL ‘MAINPORT’/ DIGITAL HUB IN THE NETHERLANDS"

NL - Security The Hague Security Delta (HSD) is the largest security cluster in Europe. In this Dutch cluster –with important regional hubs in The Hague, Twente, and Brabant– businesses, governments, and knowledge institutions work together on innovations and knowledge in the field of cyber security, national and urban security, protection of critical infrastructure, and forensics. They share a common goal: more business activity, more jobs and a secure world.

In The Hague region alone 400 security businesses realize more than 25% of the national turnover in security and employ 13,400 people. Nationwide there is a turnover of six billion euros and 61,500 people are employed in the security domain. HSD has three important regional hubs with their own areas of expertise. Twente Safety & Security (TS&S) is particularly strong in nano technology, safety, radar & sensor technology and the Dutch Institute for Technology Safety & Security (DITSS), located in Brabant, in high-tech solutions and camera and sensor technology. The main focus areas of the The Hague region are: cyber security, forensics, national security, and critical infrastructure. www.thehaguesecuritydelta.com

NL - E-commerce Thuiswinkel.org is the inspiring digital commerce network that helps companies, entrepreneurs and their employees to becoming more successful. They offer relevant and practical solutions through lobbying, the “Thuiswinkel Waarborg Keurmerk” quality mark, knowledge, research and education, primarily through digital channels, and buys goods and services wherever and whenever they want. Their objective is to improve trust in distance selling and to make cross-border trading easier. www.thuiswinkel.org

NL - Startups The overall goal of StartupDelta is to establish a thriving and competitive ecosystem in the Netherlands, listing a top 3 position in Europe on the Global Startup Ecosystem Ranking. Coming from nowhere, the Netherlands is now listing a 4th place in the EU and 19th globally (January 2016). So, we’re on speed and aiming high!

The StartupDelta initiative consists of a dedicated team with excellent connections in enterprise, government, research and all aspects of the startup community. They are assigned to tackle challenges that hinder growth for startups. StartupDelta closely collaborates with the 10+ tech hubs to make the Netherlands the largest startup ecosystem in Europe. www.startupdelta.org

The Dutch “Polder Model”:

The Netherlands is a small country with largely consists of polders, land reclaimed from the sea, which requires constant pumping and maintenance of the dykes. Ever since the Middle Ages, when the process of land reclamation began, different societies living in the same polder have been forced to cooperate because without unanimous agreement on shared responsibility for maintenance of the dykes and pumping stations, the polders would have flooded and everyone would have suffered. Crucially, even when different cities in the same polder were at war, they still had to cooperate in this respect. This is thought to have taught the Dutch to set aside differences for a greater purpose.

>>>>>>>>THE NEW FOUNDATION >>>>>>>>>>>>>>

The Dutch Data Center Landscape

With London, Paris and Frankfurt, the Amsterdam region is one of the top-four data center locations in Europe. All of these areas show growth, but Amsterdam has been outpacing the others for a while now. he strong position of the Amsterdam area can be attributed to two key factors. First, Amsterdam is home to one of the biggest and fastest Internet Exchanges in Western Europe, even the world. And secondly, out of the four metropolitan areas, Amsterdam is the more affordable in terms of property prices, doing business and cost of living. With the presence of Schiphol as a major international airport, it is also very accessible for international customers.

Table 1: Sizing the Dutch multitenant data center market, May 2016 2015 2016 Gross surface (incl. office space, etc.) 460,000 m2 496,000 Net surface (data floor) 259,000 m2 271,000 Data centers (#) 205 206 Source: Pb7 Research, June 2016

FIGURE 1: MULTITENANT DATA CENTER FLOOR SPACE (net m2 * 1000, % of total), per province except MRA, May 2016

10% 9%

7% 7% >>>>>>>>THE NEW FOUNDATION >>>>>>>>>>>>>>

5% 5% 3%

2% 2% 1% 1% 1% 0% 0%

0% ZH NB GR OV UT LI NH GE FL DR ZE FR

Source: Pb7 Research, June 2016

© 2016 Dutch Datacenter Association | 31 In the Netherlands, we found 156 multi-tenant data centers, one more compared to 2015, and estimate we may have missed up to 50 small locations with up to 100 square meters of data floor (less than 2% of the total floor space). If we add up the surface of all data floors, we find a total of 271,000 square meters (2.9 million square feet). If we add office space and areas from data center building, we find a total of 496,000 square meters.

The importance of the Amsterdam region becomes visible when we map the amount of square meters of data floor from multitenant data centers. In the Metro Amsterdam (Amsterdam, Almere, Aalsmeer, Haarlem, Hoofddorp/Schiphol), Pb7 identified more than 171,000 m2 of net floor space, or 64% of the total data floors in the Netherlands. If we take into account some historical restatements, the supply in the Amsterdam region grew by 12,000 square meters, with Keppel T&T opening up a new 7000 square meter facility in Almere as the biggest contributor the growth.

FIGURE 2: MULTITENANT DATA CENTERS’ GROWTH EXPECTATIONS FOR THE NEXT 12 MONTHS, MAY 2016 [N=100]

80% 67% 68% 70% 58% 60%

50%

40% 36% 30% 18% 15% 13% 19% 20% 6% 10%

0% Datafloor in use (m2) Power (MW) Investments (EUR)

Decrease Stable Growth

Source: Pb7 Research, 2016

Regional datacenters Regional datacenters obviously look for local opportunities. When we take away the Amsterdam region, we find less They often expect to find trade with local businesses, growth in the provinces. As a result of a few bankruptcies, healthcare or education, but have grown as a result of the supply even shrank in Zuid-Holland and Zeeland. As we saw business from local IT service providers, hosters and (cloud) that many local datacenters have a lot of unfilled data floors, software vendors. As a result, regional datacenters do well we can see this as a healthy development. Local demand is when they are located at digital innovation hotspots, where growing, but it will take a few years before the overcapacity all kinds of digital players and startups can interconnect. What will have disappeared. Looking at these facts, it seems like is so unique to the Netherlands, is that if you want to find a there is limited activity in the regional datacenter segment. But high quality, tier-III datacenter within a 30-minute drive, there looks can be deceiving. are hardly any blind spots. Pb7 Research believes that the continued investments in digital will continue to drive growth First of all, most multitenant datacenters, including the regional for regional service providers. ones, find that demand is growing and that they are able to fill more square meters. In a recent survey, Pb7 Research However, with the growing importance of “digital” for found that only 18% of the multitenant datacenters expect enterprises, SMBs and public organizations, they are also a decrease in square meter usage over the next 12 months, starting to turn to professional datacenters to deliver secure while 67% expects an increase. The percentages for power and robust housing. Datacenter and server room decision usage are similar and even slightly more optimistic and point makers are also experiencing a strong growth in demand for to continued increase of the density in equipment. the housing of computer equipment, but many are looking to build new server rooms themselves. About one in four expects a decrease in square meters and power usage, while at the same time, most believe they need to increase investments into the datacenter.

Created by IABR, found via IABR

80%

70%

60% 53% 47% 50% 46% 46% 40% 29% 30% 24% 23% 25% 20% 7% 10%

0% Datafloor in use (m2) Power (MW) Investments (EUR)

Decrease Stable Growth

Source: Pb7 Research, 2016

According to end-user organizations, more than 70% of the the role of colocation is also expected to grow strongly. This server racks are currently still located on-site. Only 13% is will be especially strong in organizations that currently don’t already located in colocation facilities and the remainder is have a back-up location and are looking into multi-tenant data hosted, in the cloud, or fully outsourced. Five years from now, centers to provide a mirror, or a slightly colder backup facility. the change will be very significant: only 50% will still be located Still, these figures also show that most growth is likely to on-site. And while most growth will go to cloud and hosting, continue to come from cloud and hosting providers.

FIGURE 4: SERVER RACK LOCATIONS, DUTCH END-USER [ORGANIZATIONS WITH FIVE OR MORE RACKS], MAY 2016 [N=100]

2016 72% 13% 15%

2021 50% 22% 28%

0% 20% 40% 60% 80% 100%

Onsite Colocation Hosting/cloud

Source: Pb7 Research, 2016

The impact of “cloud” Obviously, the cloud has a strong impact on the development on the demand for data center housing. We saw that organizations indicate that the cloud may not completely take over, but will play a major role in the computing and the storage of data. When asked for the current and future cloud strategies, most Dutch organizations indicate having a cloud strategy or approach. There is a big divide between companies that believe they will use private clouds and organizations that believe in hybrid approaches. In the end, we have seen that the number of organizations that embrace hybrid cloud computing, or managed private clouds will grow. Keep in mind that most studies also show that the volumes will increase strongly. For data centers, this means on the one hand that they may benefit from facilitating managed private cloud services, and on the other hand, that cloud companies will probably show more growth potential than the enterprise market itself. One thing is certain: server racks are moving towards multitenant data centers.

We can conclude that the data center market is very well positioned to benefit further from the strongly growing international demand for high quality data center housing on the one hand, and the growing local demand driven by the growing importance of IT for the business. But this is not just good news for the data center industry. Having a strong digital infrastructure, is beneficial to the economy as a whole as well.

FIGURE 5: WHAT IS YOUR CURRENT CLOUD STRATEGY AND WHAT WILL MOST LIKELY BE YOUR CLOUD STRATEGY IN TWO AND FIVE YEARS? WILL IT BE PRIVA- TE, PUBLIC OR HYBRID? [ORGANIZATIONS WITH FIVE OR MORE RACKS], MAY 2016

2016 8% 36% 8% 39% 9%

2018 6% 37% 10% 13% 15%

2021 5% 34% 12% 22% 19%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

No cloud Private cloud, on site Managed private cloud Public cloud Hybrid cloud

Source: Pb7 Research, 2016

© 2016 Dutch Datacenter Association | 35 A digital nation One might wonder why the Netherlands is one of top European data center locations. Simply put, a tier-1 data center location needs great infrastructure and great customers. In terms of infrastructure, it is not just about the presence of a major Internet hub, but also about access to cheap and green energy, access to in-depth data center expertise and innovation skills, costs of doing business, and cost and quality of living. In terms of customers, data centers thrive where financial centers and international business meet and where technology led companies feel at home. In this chapter, we will look at how the Netherlands compares to other countries, in particular other tier-1 data center countries, i.e. Germany (Frankfurt), the United Kingdom (London) and France (Paris).

“THE DUTCH INVENTED BLUETOOTH, WI-FI, THE COMPACT DISC AND THE DVD”

Internet Exchange The Netherlands is host to the Amsterdam Internet Exchange (AMS-IX), the second largest Internet Exchange point in the world. And in terms of throughput, only the German DE-CIX is somewhat bigger. Per second, the AMS-IX passes more than 2700 Gbit. But also the number seven internet exchange on the list, NL-IX, was formed in the Netherlands and is currently owned by KPN.

Short name Name Country Esta- Members Throughout Throughout blished (Gbit/s) max (Gbit/s) average 1 DE-CIX Deutscher Commercial Germany, USA, UAE, Italy, 1998 660 5178 2914 Internet Exchange France, Turkey 2 AMS-IX Amsterdam Internet Ex- Netherlands 1997 792 4711 2706 change 3 LINX London Internet Exchange United Kingdom, USA 1994 644 3021 1990

4 DATA-IX DATA-IX Russia, Ukraine, Kazakhstan, 2009 277 2950 1300 Germany 5 MSK-IX MSK-IX Russia 1995 398 2135 1234

6 Equinix Equinix Exchange USA, Europe, Japan, Singapore, 1998 798 1600 990 Hong Kong, Australia 7 NL-ix Neutral Internet Exchange Europe 2002 564 1560 900

8 IX.br Brazil Internet Exchange Brazil 2004 861 1470 966

9 GE-CIX GE-CIX Europe, Switzerland, Germany, 2015 180 1240 830 Russia, Netherlands, Ukraine, Poland

10 Netnod Netnod Internet Exchange Sweden 1997 255 1302 773 in Sweden

Source: en.wikipedia.org/wiki/List_of_Internet_exchange_points_by_size, Updated May 2016

Internet While the AMS-IX started out as a scientific traffic exchange, it was soon opened up to Internet Service Providers. The Netherlands quickly developed into a country with excellent connections to the Internet, and the population quickly embraced the Internet. To this day, the Netherlands is one of the best connected countries in the world. According to the Digital Access Index (DAI) , the Netherlands ranks fifth after three Nordic countries and South Korea, way ahead of the US (10), UK (11), Germany (17) or France (22).

If we take a look at a more comprehensive indicator, the EU’s Digital Economy and Society Index , we see that the Netherlands is one of the top-3 ranking countries in the EU. The Netherlands ranks first in the domain of connectivity, due to the wide availability and usage of broadband connections. 94% of Dutch households has a broadband connection, which is way ahead of the EU-average of 80%. But also in terms of digital public services (4th) and the domains of human capital (7th), use of Internet (7th) and integration of technology (6th), the Netherlands is in the forefront. In terms of IT specialists (a subset of human capital), the Netherlands ranks fourth. Not only does the Netherlands have a very strong IT services market, but it also hosts a vibrant Independent Software Vendor (ISV) community and it attracts a lot of international offices from global IT vendors.

DIGITAL ECONOMY AND SOCIETY INDEX

12,5

7,5

Weighted score Weighted 5

2,5

0 Italy Spain Malta France Latvia Poland Sweden NorwayFinlandBelgium Ireland EstoniaAustria SloveniaSlovakia CyprusCroatia GreeceBulgaria Denmark Germany Lithuania Portugal Hungary Romania Netherlands Luxembourg Czech Republic United Kingdom European Union

European Commission, Digital Scoreboard

Digital Public Services Integration of Digital Technology Use of Internet Connectivity Human Capital

Source: Pb7 Research, June 2016

1 http://www.internetworldstats.com/list3.htm 2 https://digital-agenda-data.eu/

Power One of the major cost factors for a data center is power. The location of a data center is increasingly dependent on the availability of energy sources, preferably green. And as energy is such as big part of the cost of a data center, data centers that consider locations in different countries, have to take into account the energy prices. Energy prices are relatively low in the Netherlands, especially when compared to the other tier-1 data center locations.

INDUSTRIAL ELECTRICITY PRICES IN SELECTED COUNTRIES 20153

€ 0,25

€ 0,20

€ 0,15

€ 0,10

€ 0,05

€ 0,00 Germany France Netherlands United Kingdom

<20 MWh 20 - 499 MWh 500 - 2 000MWh 2 000 - 20 000MWh 20 000 - 70 000MWh

Source:Industrial Electricity prices in selected countries 2015

Expertise Building and running top notch data centers, requires having access to a wide range of skilled professionals. The Netherlands houses a strong ecosystem of consultancies with expertise in data center design, power systems, and cooling, that export their knowledge across the globe. Most global suppliers of data center equipment have a solid presence in the Netherlands. And that the Netherlands also is ranked number 4 in the EU for access to IT specialists.

38 | © 2016 Dutch Datacenter Association Cost of living Another aspect in deciding on a business location, is the cost (and the quality) of living. According to Numbeo , London ranks as the 8th most expensive European city and Paris 11th, while Amsterdam (24) and Frankfurt (30) have a much lower cost of living. But also in terms of quality of life, from a country perspective, Numbeo ranks the Netherlands very high at a 7th place worldwide.

Rank City Cost of Living Index Rent Cost of Living Groceries Restaurant Local Purchasing Index Plus Rent Index Index Price Index Power Index

1 Zurich 135 68 103 135 136 169 2 London 96 87 91 72 102 89 3 Paris 86 48 68 80 83 101 4 Amsterdam 79 51 66 60 89 114 5 Frankfurt 77 33 64 64 69 142

Customers The infrastructure is there, but how about the customers? So far, Dutch square meters have been sold in large numbers, but where do the customers come from? More importantly, where will they be coming from?

Financial Most tier-1 data center regions are located in a key financial city. But how does Amsterdam fit in with London, Frankfurt, or even Paris? Sure, Amsterdam is still host to the very first stock exchange in the world, but it is not a major global exchange. And while ING and ABN Amro once challenged other banks for global leadership, they have become more modest after 2008. The financial sector may have been a strong driver for the Amsterdam data center world before the credit crunch in 2008, but some of the biggest growth in Amsterdam is from more recent years.

International (high tech) business The Netherlands may not be the center of the financial world, but it has a strong claim to being a mainport to Europe. The Rotterdam harbor is the biggest harbor in Europe and plays a crucial role in the distribution of raw materials and products to the EU. Schiphol Airport is the fourth biggest European airport – after London Heathrow, Charles de Gaulle Paris and Frankfurt am Main – with more than 50 million passengers per year.

The impact of the mainport function, becomes visible when the exports and imports are compared, as a percentage of the GDP. In the Netherlands, the value of imports and of exports, is about triple the value of the GDP . For the other key data center countries, the value is much lower, closer to 100%. Most of these Dutch imports and exports are related to international trade. The international orientation of businesses in the Netherlands, also translates into a surprising number of large multinationals in a variety of sectors, including energy, retail, food, and high tech. High tech companies include Philips, ASML, NXP, Tomtom, but also Adyen, Catawiki, Elastic and WeTransfer. And the Netherlands also attracts a large number of regional headquarters from Asian and American multinationals, including major technology vendors such as Huawei, Cisco or Tata Consultancy Services. So the Dutch mainport is not just about “old” business, it has a strong footprint in the digital business world as well.

4 Numbeo: Europe: Cost of Living Index by City, New York=100 5 Source: Eurostat, 2016

FIGURE 6: SINGLE TENANT DATA CENTERS’ GROWTH EXPECTATIONS FOR THE NEXT 12 MONTHS, MAY 2016 [N=100]

350% 318% 274% 300%

250% 180% 200% 154% 150% 112% 119% 109% 116% 100%

50%

0% Netherlands Germany France United Kingdom

Export Import

International Digital Companies The Netherlands may not be one of the biggest financial centers and it may be one of the biggest mainports to Europe, but in the end, it’s the digital companies that decide where data centers will be booming. Where the cloud gets dense, the rain will fall. International digital companies are attracted to the Netherlands as a result of the excellent (digital) infrastructure and the fair cost levels. Of course, the cloud cannot afford to be in one place. In the end it is inherently decentralized. But it needs major hubs. The Amsterdam region is one of them.

The key data center markets in Europe are Amsterdam together with London, Frankfurt and Paris, also known as the FLAP markets.The total market supply of the combined markets is 830 MW. The five year average for take up is 62,6 MW.

AMSTERDAM MARKET SIZE, BY OPERATOR TYPE (KW)

180,000

160,000

140,000

120,000

100,000

80,000

60,000

40,000

20,000

0 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4

Retailers Wholesalers

AMSTERDAM SUPPLY (KW)

2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4

Retailers 57,849 62,314 87,789 102,462 122,932 136,577

Wholesalers 17,760 23,410 23,410 22,810 22,810 27,810

© 2016 Dutch Datacenter Association | 41 Amsterdam had over 15 MW of new supply in the last 12 months. The most of the major European markets, bringing its total supply to 164 MW. Amsterdam now only has 20 MW less supply than Frankfurt and we will see substantial new facilities launching in the market in the next 12 months. The occupancy rate is 82%.

AMSTERDAM MARKET SIZE, BY LET AND AVAILABLE SPACE (KW)

180,000

160,000

140,000

120,000

100,000

80,000

60,000

40,000

20,000

0 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4

Let Space Vacant Space

AMSTERDAM SUPPLY (KW)

2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4

Retailers 55,758 70,977 89,268 100,377 120,239 135,179

Wholesalers 20,651 14,746 21,930 26,545 25,503 29,207

Amsterdam Take-Up by Operator Type Amsterdam is more a retail data center market than a wholesale data center market.

AMSTERDAM TAKE-UP, BY OPERATOR TYPE (KW)

25,000

20,000

15,000

10,000

5,000

0 2010 2011 2012 2013 2014 2015

Retailers Wholesalers

AMSTERDAM TAKE-UP (KW)

2010 2011 2012 2013 2014 2015

Retailers 11,075 7,359 20,594 11,337 22,287 11,630

Wholesalers - 8,730 - - - 6,300

Grand total 11,075 16,089 20,594 11,337 22,287 17,930

© 2016 Dutch Datacenter Association | 43 “In the key FLAP (Frankfurt, London, Amsterdam, Paris) markets the 2015 Q4 and 2016 Q1 saw record take up of data center space. In Amsterdam the take up is actually higher than the level of new supply. This resulted that Amsterdam’s absorption level has now dropped to 1.5 years.Though a healthy level of new supply is expected over the next 12 months.”

TAKE UP AND VACANCY RATES IN MW (INCLUDES RETAIL FITTED AND WHOLESALE FITTED + SHELL).

LONDON FRANKFURT

35,000 60% 35,000 60%

30,000 50% 30,000 50% 25,000 25,000 40% 40% 20,000 20,000 30% 30% kW 15,000 kW 15,000 20% 20% 10,000 10,000

5,000 10% 5,000 10%

0 0% 0 0%

2002 2004 2006 2008 2010 2012 2014 2002 2004 2006 2008 2010 2012 2014

Take-up Vacancy Rates Take-up Vacancy Rates

AMSTERDAM PARIS

35,000 60% 35,000 60%

30,000 50% 30,000 50% 25,000 25,000 40% 40% 20,000 20,000 30% 30% kW 15,000 kW 15,000 20% 20% 10,000 10,000

5,000 10% 5,000 10%

0 0% 0 0%

2002 2004 2006 2008 2010 2012 2014 2002 2004 2006 2008 2010 2012 2014

Take-up Vacancy Rates Take-up Vacancy Rates

Absorption: Market absorption is the number of years it would take current vancant supply to be fully let based on the xed average take-up of the previous ve years (i.e. not including take-up in the current year).

>>>>>>>>THE NEW FOUNDATION >>>>>>>>>>>>>>

Throughout history, better-connected villages and cities have been more prosperous. From the Roman paved roads to the Silk Road, from the 19th century railroad systems to the North American highway system of the 50s and to the current global Internet network, human progress has been associated with the infrastructures that facilitate the exchange of products and ideas.

The digital infrastructure, in which data centers play a central role, impact productivity by enabling and improving access to services. As our lives and the economy becomes more digital, the digital infrastructure grows and gets increasingly important. The effects on our society and economy are significant.

Economic effects The contribution of the digital infrastructure sector on the Dutch economy is a combination of four effects: Core, Downstream, Upstream and Digital Society.

Core effect The direct effect quantifies the economic impact within the digital infrastructure sector and is the direct result of added value in the industry.

Downstream The downstream effect can be divided into the indirect effect and the induced effect.

1. Indirect effect: Sectors supplying materials for production & construction (supply chain). 2. Induced effect: The result of consumption by workers directly or indirectly related.

Upstream The contribution to the wider Internet value chain.

Digital Society Digital infrastructure is a key enabler for the broader digital society, affecting the use of Internet, the broader economy and society.

>>>>>>>>THE NEW FOUNDATION >>>>>>>>>>>>>>

"OUR CURRENT LIVES WOULD COME TO A HALT WITHOUT DATA CENTERS"

Our digital infrastructure sector has proven not only a magnet for international companies to connect to or locate near the Digital Gateway but is now also a springboard for companies to grow further across the border. Although not very well-known among the general public, these companies are best in class and are growing and expanding rapidly.

A new world-class sector. The rapid growth of the Dutch digital infrastructure sector caused a whole new eco-system to emerge. Many companies started operations and grew along with the industry. It evolved into a very large eco-system of providers, suppliers and consultancy firms. Companies including in the field of data center design, data center construction, cloud and hosting providers, IT security, IT and data center hardware makers and suppliers and even companies in the field of recycling.

“NEXT TO CHEESE, DATA CENTERS ARE THE NEW EXPORT PRODUCT”

Some examples of successful Dutch Digital Infrastructure international companies:

Agriport A7 Campus developement www.agriporta7.nl AMS-IX Internet Exchange www.ams-ix.net Amsio Cloud provider www.amsio.nl Custom-Connect Connectivity specialist www.custom-connect.net Deerns Data center Design www.deerns.nl Interxion Data center provider www.interxion.nl Minkels Data center and server room solutions www.minkels.nl

EvoSwitch Data centers www.evoswitch.com

Leaseweb Cloud, CDN, Connectivity www.leaseweb.com Open Provider Registrar, Domain name management www.openprovider.nl Quanza Cloud provider www.quanza.net Royal Haskoning DHV Data center design www.royalhaskoningdhv.com

Your Hosting Cloud provider www.yourhosting.nl

Over the past 25 years, we have witnessed major changes due to the rise of the internet. Currently, a large portion of the world has access to the internet, ranging from smartphones to smart meters. With the rapid developments in the field of the Internet of Things, we can expect more connectivity in the near future. These changes make us increasingly dependent on the digital infrastructure and the online services that make use of them.

It is necessary to further develop the digital infrastructure with sustainability in mind. Efficient energy use in data centers can reduce costs and improve the sustainability of the sector and enhance its competitiveness. The topic of efficiency has taken a structural place on the agenda of data centers.

The importance of sustainability For the sector, energy efficiency is of strategic importance for its competitiveness, both nationally and internationally. This includes data centers taking their social responsibility to deal with energy in an efficient manner and to enable sustainable expansion. Sustainability and a healthy business case often go hand in hand. The Dutch data center sector shows a consistent 2015 improvement in the field of energy performance. Green IT Dutch Data Center Report on Green IT There is a lot of experience and knowledge in the sector, and good, structural steps are being taken by all parties involved to achieve further optimization. In November 2015 the Dutch Datacenter Association together with Nederland ICT and Green IT Amsterdam, published the Dutch Data Center Report on Green IT.

The report briefly describes the development of the data “FOR THE DATA center sector and subsequently addresses a number of important themes: technology, energy, standards, policy and CENTER SECTOR, finances. A brief description per theme with reference to dozens of sources and reports is given, which are also included ENERGY EFFICIENCY in the various annexes. IS OF STRATEGIC A publication with the purpose to inspire more commitment, innovation and collaboration with respect to the subject of IMPORTANCE” sustainability. www.dutchdatacenters.nl/publicaties

The Netherlands Enterprise Agency (Rijksdienst voor Ondernemend Nederland) encourages entrepreneurs in sustainable, agrarian, innovative and international business. They asked CE Delft to do research on ICT Energy consumption. CE DELFT is an independent research and consultancy organization specialized in developing innovative solutions to environmental problems. In February 2016 they published the report ‘Dutch ICT Energy consumption: 2013 and estimated trends 2020-2030’.

Report findings will lead to increased energy consumption. On the other hand, ongoing trends of consolidation in the cloud and Over the 2008-2013 period, Dutch ICT-related energy improvements in appliance efficiency will continue, with a consumption remained stable. In 2013 total electricity marked positive impact. consumption by ICT stood at 9.4 TWh, or 8% of the national total. Three-quarters of this, 6.9 TWh (6%), was used by On balance, until 2020 a 10-20% decrease in ICT-related households and businesses. The remaining quarter, 2.5 TWh energy consumption is forecast compared to 2013. Towards (2%), was consumed by the ICT sector itself, largely by data the 2030 horizon the forecast range becomes broader, varying centers (1.4 TWh), followed by telecom companies (1.0 TWh). from a 22% decrease to a 14% increase.

Increased consumption by data centers over this period Based on the study results, the recommendations to the is limited compared with the pronounced growth of ICT government was recommended to continue its efforts to services and data traffic. In the telecom sector we in fact incentivize energy efficiency, via the Long-Term Agreement for see a decrease in energy consumption, in absolute terms, the ICT sector (MJA-ICT), among other means. ICT providers even though fixed and mobile data traffic has been growing are advised to only implement energy-efficient solutions. Users structurally by dozens of percentage points annually. Over of ICT, too, are recommended to opt for efficient solutions this period, the amount of energy used by consumer ICT and exercise greater awareness in appliance usage. Finally, appliances has decreased by 20% thanks to more efficient recommendations are made for a follow-up study on the technology and growth of online applications. observed trends and on the positive impact of ICT solutions for energy consumption in other industries. Estimates for 2020 and 2030 were made on the basis of five ‘megatrends’ that will largely determine future energy www.cedelft.eu/publicatie/energy_trends_in_ consumption in this area. Growth in interconnectivity, the ict%2C_2013-2030/1756 Internet of Things and increased data collection and use

"RESEARCH FORECASTS A

Trends ICT en Energie 10-20% DECREASE IN THE 2013-2030

Energiegebruik ICT in Nederland 2013, trendontwikkeling 2020 en 2030

COMBINED ICT-RELATED ENERGY

CONSUMPTION BY 2020."

1 Februari 2016 3.F48 - Trends ICT en Energie 2013-2030

The Netherlands thrives on international trade and 2015, and will become the new framework for transferring logistics. With its many data centers, the Netherlands is personal data to the United States. However, the Article 29 an important landing and distribution point of data for Working Party, which advises the European Commission numerous US companies. on Privacy Shield, still has considerable reservations about certain provisions contained in the draft agreement. As a new Trust, through sound agreements and frameworks on framework for data exchange is of such critical importance, how we handle data and specific personal information, the European Commission must take the Article 29 Working forms the basis of trade and transit. This is why Party’s message seriously. international; agreements on the handling of personal information are so essential. The Article 29 Working Party believes that Privacy Shield does not adequately secure the privacy of European data. To be able to pass on personal information to the United The Working Party has doubts, for example, as to whether States, the European Commission signed an agreement with Europeans can sufficiently exercise their rights or whether the US in 2000, called the Safe Harbor Agreement. American the possibility of raising a complaint is not too limited and organizations which signed up to the Safe Harbor Framework complex. In addition, the Working Party is concerned about were seen as organizations which handled European personal the potential for US secret services to initiate surveillance, information in a secure manner. when mass surveillance by the US secret services was one of the reasons for invalidating Safe Harbor. On 6 October 2015 the European Court of Justice declared the Safe Harbor Agreement to be invalid. The Court took this As Dutch Datacenter Association we support the feedback decision in its ruling on a case between Austrian Max Schrems the EU Article 29 Working Party has on Privacy Shield. We and Facebook. As trade and logistics need to continue as they see that progress is being made and things are moving ahead always have done, a new agreement was put together, called and are getting clearer. We remain fully confident that a good Privacy Shield. agreement is to be made so that Privacy Shield will replace Safe Harbor. On April 13 this year, the Article 29 Working Party, an alliance of EU Member State national data protection authorities, gave its opinion on Privacy Shield. Privacy Shield will replace the DDA factsheet on Safe Harbor: Safe Harbor agreement, which was invalidated in October www.dutchdatacenters.nl/safe-harbor

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“TRUST, THROUGH SOUND AGREEMENTS AND FRAMEWORKS SAFE HARBOR FORMS THE

Nederland leeft van internationale handel en logistiek. Met haar vele datacenters is Nederland een belangrijk landings- en distributiepunt van data voor veel Amerikaanse bedrijven. Als digitale mainport, de Digital Gateway to Europe, hebben we inmiddels een serieuze omvang, staan we hoger op de ranglijstjes BASIS OF TRADE AND TRANSIT.” en groeien we harder dan traditionele mainports als de Luchthaven Schiphol en de Haven van Rotterdam.

Vertrouwen door goede afspraken en verdragen, over hoe we omgaan met data en specifieke persoonsgegevens, vormen de basis voor handel en doorvoer. Daarvoor zijn verdragen over persoonsgegevens nodig.

Om persoonsgegevens naar de VS te kunnen doorgeven heeft de Europese Commissie in 2000 een verdrag gesloten met de VS, het Safe Harbor-verdrag. Amerikaanse organisaties die zich aansloten bij het Safe Harbor Framework, werden gezien als organisaties die veilig omgingen met Europese persoonsgegevens.

Op 6 oktober 2015 heeft het Europese Hof het Safe Harbor-verdrag ongeldig verklaard. Het Hof heeft dit besluit genomen in het arrest in een zaak tussen de Oostenrijker Max Schrems en Facebook. Gezien het feit dat handel en logistiek altijd door zal blijven gaan is er een nieuw verdag op poten gezet genaamd Privacy Shield.

Nobody can predict the future but for the Dutch Data Center sector all lights are on green. We explain this at the hand of major tech trends and statistics affecting the data center market.

Data Explosion IoT is coming fast Scientists have concluded that more data has been generated Internet of Things (IoT) is expected to surpass mobile phones in the past two years than in the entire history of mankind, as the largest category of connected devices in 2018. Between and the rate of data generation is intensifying. 2015 and 2021, IoT is expected to increase at a compounded annual growth rate (CAGR) of 23 percent, making up close Amsterdam Internet Exchange reported 2015 to 16 billion of the total forecast 28 billion connected devices as a record year. by 2021. In Western Europe the number of IoT devices will From 2014 to 2015 they saw 27% growth of internet traffic. quadruple between 2015 and 2021. They grew with 127 new members & customers. An all-time record. Their 100 GE ports doubled and Ipv6 traffic almost The demand for enhanced app coverage continues to push tripled. In total 4,2 Tbps port capacity added. An annual growth LTE data rates to new heights. In 2016 a long anticipated of 32%. The AMS-IX exceeded the Peak traffic rate of 4 Tbps. milestone is being passed, with commercial LTE networks Total internet traffic volume: 9 Exabyte (9060000 Terabyte supporting downlink peak data speeds of 1 Gbps. By 2021, (Source: AMS-IX 2016) over 90% of the world’s population will be covered by mobile broadband networks. All this devices are connected to (Edge-) Global IP traffic will grow with 23% per year data centers. Global IP traffic has increased fivefold over the past five years, (Source: Ericsson 2016) and will increase threefold over the next five years. Overall, IP traffic will grow at a compound annual growth rate (CAGR) Big Data growing 23% per year of 23 percent from 2014 to 2019. All this data passes or gets A new forecast from International Data Corporation (IDC) processed and stored in data centers. sees the big data technology and services market growing at (Source: Cisco 2015) a compound annual growth rate (CAGR) of 23.1% over the 2014-2019 forecast period with annual spending reaching Global Mobile traffic grew 74% in 2015 $48.6 billion in 2019. This driven by wide adoption across Global mobile data traffic grew 74 percent in 2015. Global Industries. mobile data traffic reached 3.7 exabytes per month at the end of 2015, up from 2.1 exabytes per month at the end of 2014. All three major big data submarkets – infrastructure, software, and services – are expected to grow over the next five Mobile data traffic has grown 4,000-fold over the past 10 years. Infrastructure, which consists of computing, networking, years and almost 400-million-fold over the past 15 years. storage infrastructure, and other datacenter infrastructure- Mobile networks carried fewer than 10 gigabytes per month like security – will grow at a 21.7% CAGR. Software, which in 2000, and less than 1 petabyte per month in 2005. (One consists of information management, discovery and analytics, exabyte is equivalent to one billion gigabytes, and one and applications software – will grow at a CAGR of 26.2%. thousand petabytes). And services, which includes professional and support services for infrastructure and software, will grow at a CAGR of 22.7%. Annual global IP traffic will pass the zettabyte (1000 exabytes) Infrastructure spending will account for roughly one half of all threshold by the end of 2016, and will reach 2 zettabytes per spending throughout the forecast period. year by 2019. By 2016, global IP traffic will reach 1.1 zettabytes (Source: IDC 2015) per year, or 88.4 exabytes (nearly one billion gigabytes) per month, and by 2019, global IP traffic will reach 2.0 zettabytes per year, or 168 exabytes per month. (Source: Cisco 2016)

Cloud has steady growth of around 20% Outsourcing only just begun Software as a Service (SaaS) is forecast to grow 20.3 percent Projected Increase in data center outsourcing (%) grows in 2016, to $37.7 billion. As software vendors shift their from 21.1 % in 2013 to 42.3% in 2018. Main drivers are: business models from on-premises licensed software to public Increased complexity in running in-house Data Centre – and cloud-based offerings, this trend will continue. In addition, the recruitment of personnel to manage, sourcing power etc.. entry of some major software vendors into the public cloud Large upfront costs to construct – especially high spec facilities. last year will fuel growth of the SaaS market moving forward. Not a core competency - owning and managing data centers All SaaS is housed in data centers. are not core competencies for many organizations – need to focus on business. Organization needs can change and grow According to Gartner the IaaS segment will remain the quickly - and third party providers are able to provide flexible, fastest-growing segment in 2016, forecast to reach 22.4 billion on-demand, agile infrastructure at scale. Growing data center dollars. IaaS continues to be the strongest-growing segment compliance - and regulatory requirements especially data as enterprises move away from data center build-outs and privacy, environmental legislation. Plus the potential in-country move their infrastructure needs to the public cloud. Platform growth following EU decision on Safe Harbour. as a Service (PaaS) will grow 21.1% to 4.6 billion and Business (Source: Broadgroup 2016) Process as a Service (BpaaS) to 42.6 Billion dollars. A growth of 8.7%. Data center take up is at a high In the key FLAP (Frankfurt, London, Amsterdam, Paris) markets Goldman Sachs is forecasting the cloud infrastructure and the 2015 Q4 and 2016 Q1 saw record take up of data center platform market will grow at a 19.62% CAGR from 2015 space. In Amsterdam the take up is actually higher than the to 2018, reaching US$43B market value by 2018. All cloud level of new supply. This resulted that Amsterdam’s Absorption platforms “live” in a data center. level has now dropped to 1.5 years. Though a healthy level of (Source: Gartner 2016, Goldman Sachs 2015) new supply is expected over the next 12 months. (Source: CBRE 2016) Hybrid Cloud becomes strategic IDC sees that more than 80% of Enterprise IT organizations will commit to Hybrid Cloud architectures by 2017, vastly Absorption: Market absorption is the number of years it driving the Rate and Pace of Change in IT organizations. would take current vacant supply to be fully let based on the fixed average take-up of the previous five years (i.e. RightScale surveyed 1,060 technical professionals across a not including take-up in the current year). broad cross-section of organizations about their adoption of cloud computing. Their findings were that Hybrid cloud adoption grew significantly. Private cloud adoption increased from 63 % to 77 %, driving hybrid cloud adoption up from 58 % to 71 % year-over-year. 82 % of enterprises have a hybrid cloud strategy, holding steady from 2015. 95 % of organizations surveyed are running applications or experimenting with infrastructure-as-a-service. (Source: IDC 2015, RightScale 2016)

Rank Country Aggregated Traffic Peaks in 2014 (in Gbps)

1 Netherlands 4,179 2 Germany 4,130 3 United Kingdom 2,456 4 Russian Federation 1,238 5 Sweden 1,043 6 Poland 736 7 France 409 8 Ukraine 313 9 Czech Republic 307 10 Italy 295

Source: EURO-IX 2014 report

Ranking of the world’s metro regions and NL single sites based on networks registered in the PeeringDB.

World Metro region ranking based on Peering DB Rank Networks Metro region Country Cities

1 580 London UK London,Park Royal, Slough, Reading, Maidenhead, Newbury, Bracknell 2 482 Amsterdam NL Almere, Amsterdam, Haarlem, Hilversum, Schiphol-Rijk 3 449 Frankfurt DE Frankfurt, Frankfurt am Main 4 297 Los Angeles US El Segundo, Los Angeles, Santa Ana 5 292 San Francisco US Fremont, Palo Alto, San Francisco, San Jose, Santa Clara, Sunnyvale

Source: NL-IX / PeeringDB 2016

Netherlands site ranking based on Peering DB Rank Networks Site

1 176 TelecityGroup Amsterdam 2 (South East) 2 143 NIKHEF Amsterdam 3 100 SARA Amsterdam 4 78 Global Switch (Amsterdam) 5 70 TelecityGroup Amsterdam 5 (Schepenbergweg) 6 69 TelecityGroup Amsterdam 1 (Science Park) 7 62 EvoSwitch AMS1 8 58 Equinix Amsterdam (AM1) 9 32 Equinix Amsterdam (AM3) 10 30 euNetworks Amsterdam

Source: NL-IX / PeeringDB 2016

54 | © 2016 Dutch Datacenter Association The Netherlands World’s number 1 The Netherlands rank first in the DHL Global Europe’s number 2 Connectedness Index 2014. The Netherlands 1 Amsterdam is second in the European Digital retained its top rank as the world’s most WORLD City Index. The index describes how well 2 connected country and Europe is once again different cities across Europe support digital the world’s most connected region. EU entrepreneurs. Amsterdam achieved a top- (Source: DHL GCI 2014) three ranking for both startups and scale- ups, which are companies that have already World’s number 5 achieved a scalable business model. The Netherlands is fifth in the world (EU 5 (Source: EDCi 2016) third) with Average Connection Speed in Akamai’s state of the internet report (17 WORLD World’s number 9 Mbps). The Netherlands ranks ninth in the latest (Source: Akamai Q4 2015) ranking of the world’s best countries for 9 business, compiled by Forbes, surpassing World’s number 4 WORLD many other European competitors, such The Netherlands fourth in Foreign Direct as the United Kingdom (10), France (29) Investment (FDI) projects. A growth of 47% in 4 Luxembourg (24) and Germany (18). 2015 compared to 2014. WORLD (Source: Forbes 2016) (Source: EY Attractiveness survey 2016)

World’s number 11 Europe’s number 2 Amsterdam is 11th in the world city ranking of 11 The Netherlands has a top performance best quality of living. ranked 2nd on the DESI index of the 28th EU 2 WORLD (Source: Mercer 2016) countries. It is in the running ahead category. EU Running ahead countries are those that score World’s number 8 above the EU average and whose score grew The Netherlands is eight in the world 8 faster than that of the EU over the last year. competitiveness rankings and at rank 4 in The Digital Economy and Society Index (DESI) Europe. WORLD is a composite index that summarizes relevant (Source: WEF 2016) indicators on Europe’s digital performance and tracks the evolution of EU member states World’s number 3 in digital competitiveness. The DESI 2016 The Netherlands ranks third on Global 3 shows that both the European Union as a Resilience Index. The high ranking illustrates whole as well as individual Member States are the efficiency and safety of the Netherlands as WORLD progressing towards a digital economy and a true logistics hub. society. (Source: FMGlobal 2015) (Source: European Commission 2016)

World’s number 4 Europe’s number 2 Amsterdam is fourth in the Sustainable Cities The EF English Proficiency Index (EF EPI) is 2 Index. The Sustainable Cities Index lookes at 4 a report which attempts to rank countries 50 of the world’s leading cities. European cities by the average level of English skills amongst EU WORLD dominate the upper rankings, with Amsterdam adults. Primary conclusions are that exports placed fourth. per capita, Gross National Income per capita (Source: Sustainable Cities Index 2015) and Ease of doing business all correlate positively with English proficiency. Europe as a whole speaks the best English, with the Netherlands firmly on number 2 with very high proficiency.

Trusted Digital Gateway to Europe: According to the latest Akamai Q1 2016 State of the Internet - Security Report the Netherlands, although its size, is not mentioned as a source country for internet attacks and low on the list on target countries.

MYTH: The bigger the data center, the worse it is for the environment.

FACT: The bigger the data center the more efficient it can allocate cooling, efficiently use power the servers, storage, security and network equipment. Data centers are far more efficient than inhouse data centers. Without large data centers a lot more energy would have been used.

MYTH: Data centers waste energy.

FACT: Data centers are built for efficiency. Also the more efficient datacenters are, the less energy they use, the lower their cost, the better it is for their competitive advantage. So why waste energy? A no-brainer.

MYTH: Data centers are not green.

FACT: With there focus on efficiency the data center sector are fore runners in the green movement. In the Netherlands a vast majority of the DDA data centers use a form of green energy. It will be a question of time the whole industry uses green energy. Also almost all DDA data centers have heat pumps to store and exchange heat.

MYTH: You can grow a new digital hub in only a few years

FACT: The Digital Gateway in the metro Amsterdam is an eco-system of fiber, IP carriers, exchanges, cloud companies, content delivery networks, etc.. Each data centers forms a special marketplace. Every customer want to be at the excisting campuses because of that. You can’t build such an environment somewhere else. Actually, all the world key markets like Ashburn, Hong Kong, San Francisco, London, Frankfurt and Singapore are growing in the same way.

MYTH: You can combine data centers with residential areas

FACT: Data centers produce no emissions on site. The only by-product is noise of the fans on the roof. Existing campuses, and especially the golden campuses of the Digital Gateway: Science Park, South East and Schiphol can’t be mixed with residential buildings because of that.

MYTH: Data center employ only a few people

FACT: The direct employment of a data center is limited but the indirect effects of data centers are huge. The sector supporting, using and relying on data centers for there day-to-day operations is huge. In 2014 it was estimated by Deloitte more than a 100,000 people work in the internet economy. With a growth rate of around 10% per year more and more people have a job in or direct related to this industry.

MYTH: Data centers have no contribution to the economy

FACT: Due to the growth of the digital hub many expert companies grew very big designing, building, maintaining data centers. The users of data center space, hosting & cloud sector is one of the biggest and most diverse in Europe. Many foreign providers and suppliers have come and set up the EU HQ in the Netherlands because of the the perfect infrastructure. And the biggest job effect, because of the very good digital infrastructure we have become big in digitization. Data centers have become the main enablers of the economy.

MYTH: Data centers are telecom.

FACT: Data centers grew as the internet emerged and feel part of that. The internet, or digital infrastructure that makes the internet, works in a completely different way compared to the telecom world. In terms of the connectivity, within data centers telecom incumbents and access providers have no or at most a marginal role. Almost all connectivity in and around data centers is provided by exchanges, international backbone carriers, fiber providers and inhouse cabling inside the datacenter.

MYTH: The digital Infrastructure is only an supporting industry

FACT: The digital infrastructure sector is not only there to support the IT of other industry. It is a major sector itself. Internet access providers, backbone providers, hosting and cloud providers, internet exchanges, domainname registrars, facility and hardware suppliers, consultancy firms, design agencies, building companies, fiber providers, all together they form a unique logistical chain. On the international side, the Digital Gateway is a ‘mainport’/hub equivalent with the Port of Rotterdam and Schiphol airport.

MYTH: Only university trained workers work in data centers

FACT: Data centers need to be always on. The people working in a data centers work on industrial size electrical and cooling equipment. True professionals that are aware of their important task. Next to that 24x7 support is need to be provided by engineers on the ground. To help customers who are not physically in the Netherlands. As we are growing we are always looking for new professionals.

>>>>>>>>THE NEW FOUNDATION >>>>>>>>>>>>>>

1 Migrate to a data center 5 The need for future-proof energy supply Our economy and society are changing fast. This digital As more and more IT gets centralized in data centers, energy disruption is all coming from data centers around the world. use is obviously growing in these specific areas. This is an issue If organizations do not want to fall behind they need to move everywhere in the Netherlands but especially in the metro their IT to a data center. Organizations who migrate their IT region of Amsterdam, being the key data center market and to a data center will be far more able to follow the market the Digital Gateway to Europe. The three main data center trends, thus being more flexible, scalable and cost-effective. campuses, Science Park, South-East and Schiphol Data centers are the new foundation. And it’s all about the need to continue their growth. Although this is not an issue base. that requires immediate attention, it will become a threat if decisions are not made soon. Power infrastructure planning 2 The future is in an efficient data center is a slow process, so... urgency is needed as we should never In-house server rooms are far less efficient than data centers have to say no to our customers. are. This is why organizations, and especially those who want to lead by example in green actions, should closedown their 6 Skilled people wanted in-house server rooms and migrate their IT to a data center. Our economy has become a digital economy. Our society This will benefit the environment. The time is now. has become a digital society. All of this is made possible by digital infrastructure, hardware and software. And most 3 Don’t punish the ones who do well importantly… people. The data center sector has made serious achievements in People with the right technical skills. And this is not only being as efficient as possible. The figures of the MJA, the about higher educated people. In data centers we also need Dutch covenant of the government and the IT sector, speak people to maintain and operate the power equipment, cabling, for themselves. We do this because being more efficient cooling equipment and maintain security. And we are not even helps our business case but also because it’s the right thing talking about the indirect needs. Sectors supplying the data to do. The data center sector is and has been a forerunner in center industry, the data center customers and -since every energy efficiency. Because of this, every next step to improve company has become a digital company- all companies in the efficiency is getting more and more difficult. Netherlands. Most efficiency rules and regulations follow fixed percentages. Our current education system is not providing the people Easy for sectors that are lagging behind, difficult and more and that our digital economy is in need of. Although the system more unrealistic for industries that are already ahead in this. is not worse than most other key digital countries, it is not We are in serious need of a sector-based approach rather good enough. There is a mismatch in the type and level of than a general approach. Don’t punish the ones who are doing skills and the amount of people that get a degree every year. well. According to very recent figures, we have more than 40,000 job openings at this moment alone in IT, without the indirect 4 Towards a closed-system economy jobs taken into account. The only byproduct of a data center is heat. Most data centers To fix this we should not point fingers but work together. The >>>>>>>>THE NEW FOUNDATION >>>>>>>>>>>>>> store this heat in the ground below via thermal storage rapid growth of this sector and lack of sector representation (WKO) installations. This energy is a by-product that most data has made it very difficult to keep up. But now the DINL centers would like to pass on to anyone who needs it in order association is being formed, we need to work together to fix to achieve a truly closed cycle economy. The much needed the shortage of technical personnel. It is of utmost importance thermal network infrastructures for this are currently not in to invest heavily in education together and create a way of place. With the rise of smart cities this need to become an managing this. We need more engineers now! action point for governments to invest in. Let’s not waste this free energy. Note: In the meantime, it is of the utmost necessity to keep up place the incentives for foreign workers. We can’t do without them at this moment if we want to keep growing.

© 2016 Dutch Datacenter Association | 59 7 No data on data centers 9 Be the guide This sector has grown to its current significance mostly under On 17 November 1988, almost 30 years ago, the Netherlands the radar. But there is something very strange going on: data was the second country in the world to connect to the centers, and more broadly the complete digital sector, are Internet. Since then we have been forerunners in building the not being measured by the Dutch Central Bureau of Statistics digital infrastructure, developing protocols, doing research, (CBS). This because the tracking SBI sector codes, based providing education, improving sustainability and increasing on the EU NACE codes, do not exist or -if they do- are security. Well-known institutions like Surf, NLnet foundation, hopelessly out of date (updated once every 20 years!). Even Green IT Amsterdam and The Hague Security Delta have for non-standard, custom report requests, CBS is unable to been major contributors and are centers of progress. gather the data. As hard economic data is the basis on which A trusted, open and free Internet is key for developing a policymakers make decisions this is a very serious problem. digital economy and society. The Internet’s backbone of key Our sector has taken the initiative together with the DINL protocols and infrastructure can be considered as global association to address this issue, but until it is fixed the public good that provides benefits to everyone in the world. government needs to take the lack of good data into account. The government of the Netherlands should partner with the What’s measured, improves! digital infrastructure sector as its main knowledge partner. Together we should take a more active role as guide in leading the international agenda for Internet governance for the global The commercial data center sector in the Netherlands is public good. The ones who lead should guide the way. estimated at 800 to 850 million euros in combined revenue. These 2015 estimates are based on research conducted 10 Promote the sector by two DDA participants. This research was conducted History shows us that a good (digital) infrastructure has a independently of each other. catalyzing effect on our economy and society. Supporting our sector will help grow the Netherlands further. On a national level, this entails support and stimulation of our 8 Stimulate rather than regulate regional/national data centers and our digital infrastructure. The digital economy is driving innovation and growth This will have direct effects on the local economy and improve around the world. As new technologies, business models energy efficiency to help the environment and reach the and companies emerge, they are fundamentally altering the energy saving goals faster. business landscape and ways in which traditional industries operate. As Digital Gateway to Europe we are an obvious On an international level we are in need of permanent backing choice for foreign investment. But these investors are to step up our representation. Both inbound, attracting foreign concerned. Concerned by potential regulations in areas like direct investment (FDI), as well as outbound, helping Dutch copyright & intellectual property, intermediary liability & potential companies grow abroad. censorship, privacy & security, and infrastructure & services. The Digital Gateway to Europe organization promotes the They prefer countries that focus on creating supportive third Dutch mainport: the best infrastructure, connectivity economic, regulatory and investment environments which and digital eco-system in the world. We need to step up the consider investor sentiment. This needs an orchestrated promotion to be able to compete against other countries that interdepartmental, well-balanced approach with regards to have vast, fixed long-term budgets to promote their digital policymaking. By doing so, we can stimulate investment and sector. We need to be able to be present the Netherlands on will see significant positive results in terms of increased capital trade shows, conferences, local events, expo centers, etc. etc. investment, GDP growth and job creation. Keep the pace up on a permanent basis. Promoting the Netherlands is not only and don’t try to fix something that isn’t broken. about cows anymore, it’s about the internet of cows.

60 | © 2016 Dutch Datacenter Association Note: As Digital Infrastructure we have become a new separate sector. The Digital infrastructure even has it own ‘mainport’ that is growing fast towards the size and impact of existing Dutch international hubs as the Port of Rotterdam and Schiphol airport. A true “top sector” but without the official status and help of the Dutch government in the Dutch Top sector policies. With the digital reality that we now live in the rigid structure need to be changed. As a sector making the future.

+ 1 Work together As a young, fast-growing sector we have only recently formed trade associations in the Netherlands to represent us. A concept that is still new to most organizations that are members of the Data Center Association, but also to all organizations comprising the young umbrella association DINL, Digital Infrastructure Netherlands. DINL is the primary representation the Dutch Digital Infrastructure (Data Centers, Internet Access, Cloud & Hosting, Research, Education, Internet exchanges and Domain names). As founding member we have taken the initiative to bring all organizations together, limit the fragmentation, and with this create a single point of contact and a single voice for the shared interest of the sector. As DINL we realize that working together is the only way forward. We also do this actively, openly and with respect for the traditional representations. For the benefit of all.

>>>>>>>>THE NEW FOUNDATION >>>>>>>>>>>>>>

The Dutch Datacenter Association (DDA) is the trade association of data centers in the Netherlands. DDA unites the leading Dutch data centers with a shared mission: to strengthen economic growth and promote the data center sector in the eyes of the government, the media and society as a whole.

DDA voices the industry’s position when it comes to regulation and issues of policy. It shows leadership by facilitating its members and stimulating operational improvements through best practices. DDA stimulates education and contributes to technical standards that allow the data center sector to set itself apart in The Netherlands and outside it.

The DDA is one of the founders of the umbrella organization Digitale Infrastructuur Nederland (DINL). Together with AMS-IX, DHPA, ISPConnect, SIDN, VVR, Nederland ICT, NLnet and SURFnet, DINL unites the organizations that facilitate the internet in the Netherlands. The Dutch Datacenter Association actively cooperates with market players, the government and other interest groups.

Dutch Datacenter Association Contact: Stijn Grove, Managing Director Tel.: +31 650 439 288 Email: [email protected] Website: www.dutchdatacenters.nl

Contact: Noor van den Boogaard, Marketing Manager Tel.: +31 628 91 24 01 Email: [email protected] Website: www.dutchdatacenters.nl >>>>>>>>THE NEW FOUNDATION >>>>>>>>>>>>>>

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Pb7 Research is an independent ICT research firm. We provide independent research and advice, aimed at the successful deployment of new technology in the European market, with a key focus on the Dutch market. Pb7 supports technology marketers and strategists by identifying and analyzing market and competitive opportunities and challenges, technology buyers in making well-informed decisions and we help policy makers with key statistics and market insights. Pb7 Research is a specialist in IT security, IT professional services, data center infrastructure and services, cloud, and other emerging technologies.

Research methodology The research is based on desk research and a short survey While the overview of data center space per location was among multi-tenant data centers. The desk research has complete, we had information about the power capacity focused on mapping individual multitenant data centers. For (MW) and the PUE for about 40% of the data centers. By this purpose, Pb7 Research used publicly available sources and calculating the averages per m2, we quantified the total online searches. capacity and we used the average from the known PUEs.

After identifying the data centers, we checked the current The anonymous survey was done among members of the status via every individual website and did a double check Dutch Datacenter Association. With a total of 158,000 m2 based on addresses. This resulted in the removal of a number of data floor, the DDA represents 61% of the total market of data centers that went out of business or had changed volume. The survey results are mainly representative for the owner and other double counts, in the addition of a number mid and high end of the market. of data center locations that were not listed in other sources.

For a limited number of data centers we had to estimate the net floor space as there was only information about the number of racks (one per 2 m2) or the gross surface. We estimated that we still may have missed 50 data centers with on average 100 square meters of floor space (this is probably on the high end) and added 5000 square meters (or 1.9%) to the total as a result.

Pb7 Research Contact: Peter Vermeulen, Principal Analyst Tel.: +31 657 585 156 E-mail: [email protected] Website: www.pb7.nl

CBRE formed a special Data Centre team in 1994 to address the specialized technical real estate needs of high-tech firms such as telecommunications companies, data center operators and corporates.

Core technical real estate services provided by the Disclaimer CBRE Data Centre Solutions team include: Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do • Acquisition – One-off assignments, worldwide network not doubt its accuracy, we have not verified it and make no rollouts guarantee, warranty or representation about it. It is your • Disposal – One-off assignments, multi-site marketing responsibility to confirm independently its accuracy and campaigns completeness. This information is presented exclusively for use • Investment by CBRE clients and professionals and all rights to the material • Consultancy – Consolidation strategies, mergers & are reserved and cannot be reproduced without prior written acquisitions permission of CBRE. • Asset valuation – Bank, corporate • Project management, development monitoring, due diligence, building and M&E surveys • Research – Market reports, statistics, take-up forecasting

Data center research CBRE quarterly European ViewPoint identifies data center supply, take up, demand and availability and forecasts the next quarter’s outlook. It provides an industry-leading analysis of data center space in Europe and a unique market opinion piece developed in partnership with iXNewsSearch.

The research relates only to the European Carrier Neutral Hotel Tier 1 markets. Accurately capturing the dynamics of all the categories of the Data Centre market is very difficult, especially when attempting to analyse vacancy within standalone Carrier, Web-Hosting and IT outsource data center facilities. The Carrier Neutral Hotel market caters for the full range of user/operator requirements so it is the best indicator of the underlying conditions in the Data Centre market.

CBRE Data Centre solutions Contact: Mitul Patel, Associate Director Tel.: +44(0)20 3257 6669 E-mail: [email protected] Website: www.cbre.com

MAY 2016 APR 2016 Data center & Law Report Factsheet Safe Harbor Available in Dutch Available in Dutch and English

In samenwerking met:

ICTRECHT 2016 Datacenter en Recht SAFE HARBOR

Nederland leeft van internationale handel en logistiek. Met haar vele datacenters is Nederland een belangrijk landings- en distributiepunt van data voor veel Amerikaanse bedrijven. Als digitale mainport, de Digital Gateway to Europe, hebben we inmiddels een serieuze omvang, staan we hoger op de ranglijstjes en groeien we harder dan traditionele mainports als de Luchthaven Schiphol en de Haven van Rotterdam.

Vertrouwen door goede afspraken en verdragen, over hoe we omgaan met data en specifieke persoonsgegevens, vormen de basis voor handel en doorvoer. Daarvoor zijn verdragen over persoonsgegevens nodig.

ICTRECHT

MAR 2016 JAN 2016 Data center Vision Report The impact of the personal data Available in Dutch security breach notification law Available in Dutch and English

2016 Impact van de meldplicht datalekken IN EN ROND HET DATACENTER

NOV 2015 JUN 2015 Dutch Data Center Report on Green IT 2015 Dutch Data Center Report 2015 Available in Dutch and English State of the Dutch Data Centers Available in English

2015 2015 State of the Dutch Green IT Data Centers

Download the free reports at www.dutchdatacenters.nl/publicaties

www.dutchdatacenters.nl/map