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Data CentresFDI and Market Trends24th June 2010

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About OCO Global

Headquartered in Belfast, with 6 offices in Europe and North America and global reach through a partner network.

40+ consultants (10 nationalities, 9 working languages)with professional experience in more than 50 countries.

Key expertise in:

– Trade advisory for private and public sector

– Trade and FDI lead generation

– Location advisory

– FDI strategy and proposition development

– Market research

Regularly cited in leading publications such as The Economist, The Wall St Journal, The Financial Times

Contributor to UNCTAD and World Bank training and publications on FDI, such as the World Investment Report.

Client Examples

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Global Trends

148 international investments in data centres were recorded globally between 2005 and 2009.

Project numbers have declined by 49% since 2007.

48% of total investments for 2005 to 2009 were destined for Western Europe.

4 of these projects were destined for Ireland.

North America has become the top destination region for 2009 as Europe and Asia declined.

Data Centre FDI Projects, 2005-09

Source: FDI Markets

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Top Destination Markets

UK has been the top destination country for total projects over the past five years, mostly due to 11 investments in 2008.

USA was the second top destination for the five years, and top destination in 2009 with 7 projects. This was also the only destination to show growth in the past year.

Top city hotspots include:

– Paris (12 projects)

– London (8)

– Singapore (7)

– Toronto (5)

– Shanghai (5)

– Frankfurt (5)

– Amsterdam (5)

– Dublin (4)

Top Destination Countries for Data Centre Projects, 2005-09

Source: FDI Markets

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Top Source Markets

Concentrated Opportunities

The top source countries accounted for 79% of projects between 2005 and 2009

USA accounted for 48% of projects alone

USA and UK have declined in project yield since 2007, while Japan has remained stagnant.

10 of the 12 projects from Netherlands came from one company, Interxion, compared to 50 investors headquartered in USA

Germany yielded 6 investments from 5 companies

Top Source Countries for Data Centre Projects, 2005-09

Source: FDI Markets

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Investment Drivers

Investments are being driven by market forces – 49% of investments due to domestic or neighbouring market growth

Key client groups

– Financial Services

– ICT

– Government

– Small Business

Importance of critical mass – potential partnering opportunities

Influence of regulation – financial services

Communications Infrastructure –importance of network resilience

Technology – Cloud computing

Top Motives for Data Centre Projects, 2005-09

Source: FDI Markets

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Case: Missouri - Promoting Data Centre Activity

Key Selling Messages

Business Climate

– Low cost location (lower electricity costs than 47 other US states, lower wages)

– Low cost of living (5th lowest in US)

– Competitive taxes (5th best US corporate tax rate)

Consistent weather patterns and no water shortages

Critical mass - 950 strong communications cluster, pressence of companies such as Savvis and IBM.

High quality infrastructure – five year plan to provide clusters of 50 or more dwellings with high speed internet

15 million sq ft of underground data centre sites

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The Irish Cluster

Microsoft (2009) opened a US$500m, 28,000 sq ft “mega” data centre in Dublin to support EMEA activities. Dublin was selected due to the cool climate. The centre is helping to expand the companies cloud computing capabilities.

Canada Life (2007) relocated its European IT hub to Dublin including creating a new data centre

Sage Group (2006) Ireland set up a data centre in Ballsbridge, Dublin as a disaster recovery site

Vodafone (2005) announced plans for one of its three global data centres in Dublin at a cost of €8m. The two other sites are in Italy and Germany.

Inbound Projects Key Existing Investors & Indigenous Operators

Source: FDI Markets Source: BroadGroup, 2008

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Other Leading Worldwide Investors

Company Headquarters No of Data Centre Projects (2005-09) Sector Market Focus

Interxion Netherlands 10 Software & IT Services Western Europe

NTT Japan 7 Communications Asia Pacific

KDDI Japan 6 Communications Global

Fijitsu Japan 6 Software & IT Services Global

AT&T USA 5 Communications North America & Asia Pacific

Equinix USA 5 Communications Western Europe & Asia Pacific

IXEurope UK 4 Software & IT Services Western Europe

Google USA 3 Software & IT Services Western Europe & Asia Pacific

Honda Japan 3 Automotive North America

Savvis USA 3 Software & IT Services Western Europe & Asia Pacific

HSBC UK 2 Financial Services North America

Iron Mountain USA 2 Business Services North America & Western Europe

SunGard USA 2 Software & IT Services Europe

AXA France 2 Financial Services North America

Source: FDI Markets

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Competitiveness Position Factors

Weighting Model % Factors Measured

Infrastructure and Accessibility 35

Access to major overseas markets

Quality of local infrastructure

Quality of utilities

Quality of ICT infrastructure

Presence of an Industrial Cluster 30 Size of industry Track record

Research and Development Capabilities

Proximity to consumers

Export competitivenes

s

Industry Specialisation

Labour Availability and Quality 20 Overall size of

labour market

Tightness and competition for

labour

Experienced industry-

specific staff

Non-experienced

staff

Flexibility of labour

regulations

General Business Environment 10

Economic growth and

stabilityOperating risk Taxation and

incentivesAccess to

financeRegulatory

environment

Living Environment 5 Cost of livingAttractiveness

for international staff

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Ireland’s Competitive PositionQ

ualit

y →

Cost →

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Ireland’s Competitive Position

Cost Factors Quality Factors

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Opportunities

It is predicted that more than 70% of the Global 1000 organisations will have to move or modify their data centre facilities over the next 5 years (Transitional Data Services,2009)

Broad Group expects an average space growth of 12-18% in Ireland over the next 3 years

Key opportunities:

– Cloud computing advances

– Increased financial regulation enforcement (disaster recovery, record keeping – MIFiD, BASEL II)

– SMEs

– Public sector reorganisation and evolution (e-health, shared services, data protection)

Microsoft Data Centre, Dublin

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Discussion Themes

The research shows the €9bn opportunity but what are challenges that need to be overcome:

1. What are the most important factors that will change the shape/structure of the DC market (eg cloud, risk, compliance, energy)?

2. On what basis should we prioritise markets, sectors & opportunities to pursue in this space?

3. What is our unique selling proposition and how does it align with the needs of the data centre industry - What is the message?

4. Who is the buyer, user and influencer and how should they be approached- what channels are likely to be effective?

5. What are the actions needed to grow business - What 3 things do we need to do to improve our chances of success in this market?

6. How can EI best add value - How can we use the services, networks and resources of EI to go to market?

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Points of Contact

Mark O’ConnellChief Executive OfficerT: +44 28 9024 1849M: +44 77 7164 3633E: mark.oconnell@ocoglobal.com

OCO Global Ltd (Head office)6 Citylink Business Park, Durham St,Belfast, BT12 4HB, Northern Ireland

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OCO BrusselsAvenue Louise 283/18, 1050 Brussels, Belgium

OCO LondonUnit 201, Mortlake Business Centre, Mortlake, London, England

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