Data centres represent complex environments where multiple sectors coexist and a multitude of regulations converge. So how will the most complex challenge in recent UK political history impact the data centre sector? Emma Fryer, associate director of techUK, clarifies Brexit confusion, raises concerns, addresses the risks and hunts for a few silver linings…
Is the uncertainty around Brexit of concern to the data centre sector?
Businesses don’t like uncertainty and data centres are no exception. But in reality it’s the nature of that uncertainty that is generating unease. If it affected the supply of turnips then operators would be relaxed.
Unfortunately, Brexit generates multiple uncertainties that relate to core business concerns like data flows, trade in digital services, skills, energy costs and other commodity charges, environment and inward investment. In each of these areas, there is a balance of risk and opportunity and a no deal scenario places a very large hippopotamus at the risk end.
And these are only the direct impacts – think of what would happen more broadly to UK corporate health if sterling falls 20 percent (as is deemed likely in a no deal) and the sector starts losing customers as businesses fail? Moreover, it’s not just the immense scale of uncertainty, it is also the number of potential scenarios that remain on the table and are likely to be unresolved until the last possible moment. Operators cannot possibly prepare for every potential scenario.
How are firms preparing for these outcomes?
Operators have been preparing on two levels – strategically and pragmatically. Strategically, they are trying to ensure that they can continue to service their customers irrespective of location. At a more pragmatic level, companies are seeking assurances from their supply chain to ensure that imports, especially high value, long order book M&E equipment, are going to arrive – and in time.
They are also ensuring that non-UK staff register their residence and continue to be protected. While we are not expecting the lights to go out purely as a result of Brexit, operators are braced for higher energy costs, especially if there are changes to trading arrangements via the interconnects. They are also keeping their diesel tanks topped up, not because we expect interruptions to the supply reaching the market, but in case distribution is constrained by stockpiling.