In Touch with Tomorrow : Data Centres

8/6/20: In a series of articles, Group CEO Mark Lawrence follows up the recent trading update with some more in-depth analysis of the Group’s prospects going forward and his reasons for confidence. In this one he looks at the opportunities in the Data Centres Market

The growth in the data centre market has not slowed – it is accelerating

The FT, on 2 June 2020, ran an article featuring the surge in data centre stocks as the world went online during the pandemic. The article commented on ‘a fight for scale’ and the commitment of substantial funds to that cause. And this is no surprise – the global data centre market is set to grow exponentially over the next five years, as business and retail customers alike see the advantages of on-demand cloud storage. The arrival of 5G and what is called ‘multi-cloud’ architecture (which helps in preventing data loss or downtime during a localised component failure) both add further momentum to this picture.

And the scale of this growth is extraordinary, measured by various research reports in hundreds of billions of dollars, what I think everyone can agree is that a vast wave of growth is happening now and has not been slowed by the pandemic – it has been accelerated.

Data centres are all about the M&E – our area of leadership

So why is this such good news for TClarke? In simple terms, with data centres, the ‘box’ of a building is relatively simple, while what’s inside it – the technology is complex and requires a lot of mechanical and electrical engineering – particularly to provide the power supply and resilience and to provide the most efficient cooling. So the M&E services, in which we are acknowledged market leaders, are the dominant element of each data centre construction programme.

And, as we mention very clearly in our recently released Annual Report, we have the complete range of specialists skills and accreditations, backed up by a deep resource of expert people in-house, to deliver complete data centres anywhere in the UK and across mainland Europe. 

That in-house resource is special both for it’s scale and quality and for its deep levels of technical expertise. 

Major clients are asking us to enter the market

Moreover, we are not market entrants – we already work with major long-term partners in the data centre industry. So when we have said that we are interested in this market, we have also made it clear that we have been explicitly encouraged by those partners to offer our services to help them deliver their projects.

The demand for high quality M&E services to deliver data centres is high and will be high – this is going to be a systemic feature of our markets through the next years. There has been no pause in demand – and we cannot see one ahead. 

Data Centres provide TClarke with a strategic opportunity to grow

And this is why, in recent media articles I have explained how we see data centres as also serving our business as a gap-filler – providing us with a pipeline of opportunities, during the time when our traditional London commercial development clients may pause to take stock of changing demand in the short term.

The claims we make around our capability are readily substantiated as factual. So Data Centres offer one of a series of strategic opportunities which present themselves to our business – and give me one of a series of reasons to be confident and optimistic about our business.

In the next of these articles I will look at another strategic opportunity for our business – infrastructure.