Thursday, 3 September 2015

Building New Data Centres: Russian Construction Heating Up

Russia is by no means a dominant force in the worldwide data centre industry. Its entire market share, globally speaking, is less than 0.5%. However, things are changing in that part of the world. Russian construction of new data centres has been picking up over the last five years. Furthermore, the commercial sector has been growing at about 25% since 2010.

Russia's IT industry is readily embracing cloud and colocation services as a primary revenue driver for the future. At the end of last year, the commercial market was estimated at some £109 million, representing a 20% increase over the year before. Experts believe that growth will continue for the next 3 to 5 years at minimum, and perhaps longer. They expect the business to government market to do very well also.

2 Factors Driving Construction

Until just a few years ago, Russian businesses and consumers were content to utilise international data centres for their data hosting needs however that seems to no longer be the case. According to some research conducted in Russia, there are two primary factors driving new data centre construction:

  • Natural Environment – As a whole, the natural environment in Russia is rather cool. The region is not known for blistering hot temperatures and extremely high humidity over long periods. Therefore, the power and cooling needs of the typical data centre are lower in Russia than they are in other parts of Europe and Asia. Russian companies are finding it more profitable to build domestically rather than going internationally. Companies outside of Russia are also finding the environment attractive.
  • Data Security Laws – Russia's laws regarding data security have been updated, including a recent regulation that requires all personal data belonging to Russian citizens be stored on servers located in domestic data centres. Like Canada and a number of countries in Europe, requiring data to be stored domestically allows security experts to better protect it. The new law has led to an instant increase in demand for data centre services.
We should note that Russian companies are more willing to embrace cloud computing now that they know it works in other parts of the world. This is yet another factor driving data centre construction.

Data Centres Equals Jobs

Russian officials are understandably excited about the fact that data centre construction is picking up in their country. Not only does new construction increase Russia's market share, but it also contributes to the recovery of Russia's struggling economy. Where there are new data centres, there are also new data centre jobs to be filled. Russia is very optimistic about the emerging IT sector it hopes will be able to compete on a global scale within the next 5 to 10 years.

All eyes will be on the Russian IT industry to see how it does from both a competitive and environmental standpoint. If the country can compete economically without sacrificing environmental responsibility, it should do very well.

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