Inward investment into Irish datacentre market set to top €10bn by 2022, research claims

Ireland’s growing prominence as a European datacentre hub is continuing apace, with research showing that the market is now receiving up to €1.3bn of inward investment each year from server farm operators.  

According to a quarterly market update document published by Host in Ireland, an organisation that champions the country as a good place for overseas cloud firms to do business, inward investment by the datacentre industry into Ireland is expected to top €10bn by 2022.

“These are unprecedented levels of investment,” said Garry Connolly, president and founder of Host in Ireland, in the report.

And it is investment that, to date, has primarily been driven by the activities of hyperscale cloud and internet service providers such as Amazon, Facebook, Google and Microsoft, who have all built datacentres in Ireland in recent years, the report said.

At the moment, the hyperscalers account for about 72% of the occupied datacentre capacity currently in operation in Ireland, but the market is also fast emerging as a popular location for colocation facilities.

“The colocation wholesale market has grown from almost zero to 13% in the past three years,” the report said.

As a result, there are now 53 datacentres in operation in Ireland, with most of them located within, or close to, Dublin.

“Each incumbent operator completed a new facility or received planning permission for future developments. New entrants to the market also progressed [construction plans],” said the report.

All this growth has also generated sizeable follow-on economic benefits for Ireland as a whole, as well as its IT market, the report added.

“The enormity of this investment has been transformational for Ireland over the past 10 years,” said Connolly. “Over a similar period, the ICT sector in Ireland has seen a direct and indirect employment increase to more than 100,000 jobs.

“Our ability to provide the data infrastructure required by some of the largest companies in the world has meant that computer service-related exports now top €69.3bn, making it the largest export sector in the economy, beating pharmaceuticals and the agrifood sector.”

Connolly added: “The cumulative effect continues when you  account for the proximity factor of startups that spin out from the major ICT companies, due to skill transfers, that go on to attract venture capital funding and subsequently provide more high-paying jobs for the Irish economy.”

Ireland has emerged as a popular location for datacentre operators in recent years, thanks to its temperate climate and congenial tax regime.

The Irish government has also taken steps to make it easier, from a planning permission perspective, for operators to set up shop in the country by reclassifying such builds as “strategic infrastructure developments” to speed up the time it takes for the approvals process to play out.

This move is thought to be directly related to the problems Apple encountered during its abortive bid to build a datacentre near Galway, which it abandoned after spending several years embroiled in legal challenges over the project.