Market report and board announcements at DDI’s event in Odense

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Last week, DDI held its general assembly and the spring network meeting with hosts Coromatic and COWI. But of course, the corona virus outbreak was taken seriously on the day, so handshakes and hugs were replaced by elbow greetings and  smiles between the 60-70 participants amidst the serious situation. Danish Data Center Industry marked its three-year birthday with a great attendance despite the circumstances.

Chairman, Thomas Volder reported on the key activites of the industry and stated that the association has now 77 official members.

“We embrace a wide range of members from various parts of the industry, and lately a number of  operators have also joined us, which we are really happy about. Our ambition is to grow our member base to reach a critical mass in order to drive our activities and deliver even more value to members, “said Thomas Volder.

Thomas looked  back at DDI’s  busy calendar year in 2019, thanks to the active backing and support from the members.

“Our first annual event in May in the UN City was a great success. The participants had to be cleared the day before, so that the number of participants did not exceed the 280 registered on the day. But even more participants could have joined if there was an opportunity for registration on the day,” the chairman said.

“Remember to register well in advance this year due to security procedures at the UN City – we are expecting between 300-400 participants and so far the agenda looks really good with great participation from a variety of important stakeholders. We really hope that we will be able to execute the event in May, but of course we will notify you if the event must be postphoned due to the current corona virus situation. We are expecting to make a final call by the end of this month”

A steady progress has also been made with the TIDA – Test & Innovationcenter Denmark project.

“The project has been underway for some time now, with many people involved, and right now we have to determine how we can create a model around it which works for all parties involved. We are not there yet, and there are some major investments to be made, but we have positive commitments from a number of big players in the market, ” said Volder.

In the future, the association will also have a greater focus on exploring export opportunities, as the association is increasingly working with investment agencies in key European markets such as the Netherlands, France, Germany and Ireland. In December, DDI joined up with Business France to host a business meeting between Danish and French stakeholder the day before the DataCloud Nordics event in Copenhagen. Members can expect similar events in the near future.

The chairman also noted the recent market developments, stating that more projects were most likely to be announced soon.

“Recently it was announced that SAP  has purchased land in Aabenraa and Padborg, and I am sure that we will see more announcements in the near future. In many of the key markets in Europe, it is now difficult to access energy and land, so the Nordics and Denmark in particular will be obvious alternatives for the Tier 1 markets.”

Director of DDI, Henrik Hansen, presented a financial report in which the result – apart from a small positive deviation – was almost in accordance with the budget, and this year the ambitions will be higher.

“We will be able to accelerate the development and the growth of the association if we realize the these ambitions. So, if you are a Business member, you should consider upgrading to an executive level as we add more incentives to our executive members – also remember to spread the word to all potential members in your network regarding the opportunities within our association,” said Henrik Hansen.

The board of the Danish Data Center Industry will gain new perspectives, as five members have resigned due to new working relationships with their respective organisations. Newly elected board members include Jakob Munch from CBRE, Anders Hansen from Digiplex, Per Henriksen from Fuzion and Karsten Rieder from Business Esbjerg. Rasmus Brandt from Søren Jensen will have an observatory role in the board.

After the general assembly meeting was concluded, DDI proceeded with the networking meetup.  The network meeting was kicked off with the launch of DDI’s report.

The consultancy firm, COWI has, in collaboration with DDI, launched the first market report that is now available – read more here.

Merima Dzanic from DDI and Jakob Dybdal Christensen from COWI presented the key findings of the report.

“It is a multifaceted report, where we map virtually everything related to the Danish market and combine it with some recommendations from the association. After all, we have some strong opinions on current market conditions and how the industry can develop further in Denmark, overcoming some of the regulatory challenges,” explains DDI’s COO Merima Dzanic.

“The report highlights some of the key market shifts the industry is currently undergoing, especially on changing business models. Enterprises are rapidly moving from in-house to outsourcing their IT. Even banks, who 10 years ago would never even consider outsourcing their IT, are moving into colo and cloud environments”.

“Another important factor is the shift in capacity sourcing. As enterprises are moving into cloud environments, hyperscalers, who deliver these cloud services, are in turn taking up colocation space, where they have the flexibility of scalability, cost and speed. The future seems to be in the colo, and colocation data centers are steadily reaching the hyperscale level themselves.”

Another important point the report highlights, is that that larger data centers are more energy efficient. Therefore, Greenpeace has, for example, given top marks for the contribution of hyperscalers to CO2 neutrality.

“Another key point is that the Danish companies are calmly moving into hybrid solutions in a combination of their own capacity and co-lo. This also applies to manufacturing companies and banks,” the report’s lead author, Chief Market Manager Jakob Dybdal Christensen of COWI pointed out.

“Over the next five years, we can see that many companies will prioritize primarily cloud-based solutions, and then they will expand their on-premise activities. We can also see that Southern Denmark is expected to attract a number of data center investments, among other things because of competitive land prices, ” he stated.

The newly released market report will become an annual release for the association.

The networking meetup continued with a presentation from the co-host, Coromatic. BA Director Lars Frandsen, who is responsible for Coromatic’s data center department. He pointed to a digital development that is increasingly reliant on a stable power supply.

“In short, we build safe homes for data centers,” said Lars Frandsen, illustrating it with his daughter’s drawing of a house.

“Digitization is driving the trend forward, and right now many are, for example, working from home due to the corona crisis – this is all possible because of data centers. Building them is quite complicated, but here we have some advantages as a system integrator. We are not manufacturer-dependent, but we can take the best from all shelves for our customers.”

Coromatic works from 17 locations throughout the Nordic region, where 50% of the largest companies are on the customer list. At the meeting in Odense, the participants had the opportunity to take a virtual tour in a data center in the company’s Virtual Reality chair.

The next presentation on the DataWISE project was presented by Karl Sperling, Associate Professor at Aalborg University and Ph.D in Energy Planning.

“Our ambition is to bring the data center and district heating industries together, so that they stand stronger in the green transition. When we take a general look at all the district heating we can utilize from data centers coming to Denmark, there is a great potential for CO2 reduction. We can save quite a bit of electricity and heat production costs for around a billion DKK annually. We have some cooling solutions that can be integrated directly into district heating, and we develop some competencies that can bring the two sectors together,” explained Sperling.

Based on the Danish Energy Agency’s expectations for development and energy consumption, he expects the excess heat from data centers to cover 20-25% of the Danish district heating needs.

“If we at the same time excel at placing data centers near the cities, the heat could be utilized here. The trend is that the flow temperature of the district heating water goes down due to better energy efficiency in the houses. Conversely, the temperature for excess heat from data centers should rise. We see  a huge opportunity in this for both data centers and the district heating industry,” said Karl Sperling.

In his own home city, Aalborg, Asetek, for example, has connected the first water-cooled server directly to the grid at Aalborg District Heating this year – without the need to upgrade with heat pumps, because the water already has a sufficiently high temperature.

The network meeting was concluded with a panel discussion in which the participants, among other things, were asked to estimate the most important trends in the industry right now.

Key Account Manager, Søren Schrøder, from Schneider Electric pointed to peak shaving in the grid as one area that will be looked more at in the near future, while Asetek’s Vice President, Thomas Ditlev brought up the theme of surplus heat.

“Water cooling is needed – otherwise it will not function. Our own small advertising pillar in Aalborg shows that it can be done, and that the technology is there. We just have to convince the climate minister that it is not unimportant,” Thomas Ditlev said with a hint to the minister’s argument that data centers are still running on green power, so utilization of surplus heat does not count in the Danish CO2 accounts.

Project Lead, Rasmus Brandt, from Søren Jensen A/S agreed on this:

“In three to four years, the technology is more mature, so we can also make use of liquid cooling and take it further into the market. It’s energy-wasting to throw out energy, as is the case with free-cooling, and the technology is coming soon. ”

Fuzion’s CEO, Per Henriksen, pointed to consolidation in the industry with larger customers as well as the interaction between the industry’s emergency power preparedness and the electricity grid.

“We have made our large generators available for the energy supply – then they can be used for a shorter period, if, for example, the wind flow should fail. Our systems are so advanced that it is relatively easy to give the energy supply access to start them,” stated Per Henriksen.

The panel was also asked to assess whether future EU legislation should be considered as a positive pressure on the industry?

“According to EU’s proposal, the target year is 2050 with regards to reaching climate neutrality, while Denmark says by 2030. In this case, we have a 20 years lead if we make it work. But it will be the market that has to drive it. Regulation is always a bit behind and the lowest common denominator compared to the commercial/private side, ” said Brandt.

The chairman of the association also sees great opportunities in tougher international demands.

“In relation to the flexible and agile way in Denmark, we can hopefully help create some innovative solutions as best practice for the industry. I think the next thing to happen is that it will be a shift which will come from the consumers themselves. When our children, for example, can choose between streaming red, yellow or green in relation to the climate, then it will be a completely different agenda. In the end, the end-users are the ones who will pick up the bill,” Thomas Volder said.

When it comes to utilizing surplus heat, Per Henriksen wondered why it is no longer included in the overall planning.

“When you do urban planning, you can see everything from radon radiation to the colour of the roof tiles. But you cannot see where to to place a company or industry and subsequently get rid of 2 MW of heat – how hard can it be? I think a law should be imposed on  district heating plants which orders them to capture the heat – then we can tell them where they can get it from,” said Per Henriksen.

When it comes to the future of the regional market, Henrik Hansen,CEO of DDI, asked if it is realistic for Denmark to become a real data center hub?

The panellists were overall in agreement on the potential of the industry in Denmark, if we look at it realistically.

”The main markets will continue to be main markets. But we will see more focus on the Nordic countries because of our available renewable energy. In the context of free cooling and utilization of surplus heat, I continue to see growth. Whether it will be an explosive growth, will remain to be seen, ”said Thomas Volder.

Per Henriksen from Fuzion agreed:

“Colocation data centers can keep the flag flying. If we can make something in Denmark where we not only run on wind power, but also utilize the heat, we can make a difference. Here it is important that we are progressive. So if we can provide green solutions for our children, I believe that there is plenty of future in this.”

Thomas Ditlev emphasized that – in line with the association’s recommendations of a national strategy for data centers – it also requires political understanding in order to exploit the opportunities:

“We must be a pioneer – also on ‘the green radiator’. But it is challenging when we have to fight so much, even when we have Denmark’s most green government. Just imagine if we had put a redtape on the fools in Tvind who once built an ugly windmill…? ”