Le Lézard
Classified in: Science and technology, Covid-19 virus
Subjects: Survey, Economic News/Analysis

U.K. Data Centers Face Energy Price Spikes, Brexit Effects

Soaring energy costs and the continued fallout from the United Kingdom's decision to leave the European Union have had a major impact on that country's private/hybrid cloud data center outsourcing market, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2023 ISG Provider Lenstm Private/Hybrid Cloud - Data Center Services report for the U.K. finds that due to Brexit the country has lost its broad market access to other EU member states. At the same time, repercussions from the Russia-Ukraine conflict have led to a sharp spike in energy costs, forcing service providers to seek other ways to alleviate their rising operational expenditures.

"Data centers in the U.K. are struggling to offer services at the same price as they did before Brexit," said Ola Chowning, ISG partner, North Europe. "A number of them have sought to renegotiate their contracts with end users in an effort to pass on some of these additional costs."

In the leadup to the finalization of Brexit in 2020, companies from a variety of industries relocated to other EU member states, anticipating the resulting loss of market access, the ISG report says. Not surprisingly, this exodus has had an adverse impact on the U.K.'s digital competitive edge. In fact, according to the 2022 IMD Digital Competitiveness Ranking, the U.K. dropped two positions from its 2021 ranking to 16 out of the 63 countries. Yet despite Brexit, many companies are still co-locating close to London's financial trading houses to reduce latency, ISG says.

Meanwhile, sharply increasing energy prices, due in part to the Russia-Ukraine conflict, have led to consolidation of data centers across the U.K., while others have been nearshored to Dublin, the ISG report says. In response to this market volatility and to cut costs, some enterprises in the region are navigating away from well-established service providers toward smaller specialists for their cloud transformation requirements. According to the ISG report, enhanced automation capabilities can serve as a powerful equalizer, leveling the playing field between large, established providers and smaller, regional ones.

"Enterprises in the U.K. are seeking transformation solutions that reduce operational expenditures while improving their sustainability and compliance with government regulations," said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. "Service providers are constantly innovating to address these needs and more."

The report also examines how both the COVID-19 pandemic and the Russia-Ukraine crisis have brought FinOps to the forefront for enterprises as service providers grapple with higher operating costs.

The 2023 ISG Provider Lenstm Private/Hybrid Cloud - Data Center Services report for the U.K. evaluates the capabilities of 62 providers across five quadrants: Managed Services for Large Accounts, Managed Services for Mid Market, Managed Hosting for Large Accounts, Managed Hosting for Mid Market, and Colocation Services.

The report names Rackspace Technology as a Leader in four quadrants, while Fujitsu is named as a Leader in three quadrants. Atos, Claranet, DXC Technology, Ensono, Kyndryl, Telefónica Tech and T-Systems are named as Leaders in two quadrants each, while Accenture, BT, Capgemini, Computacenter, Digital Realty, Equinix, Global Switch, HCLTech, Hexaware, Infosys, Lumen, NTT GDC, Pulsant, TCS, Telehouse, Unisys and Wipro are named as Leaders in one quadrant each.

In addition, Claranet and Tech Mahindra are named as Rising Stars ? companies with a "promising portfolio" and "high future potential" by ISG's definition ? in one quadrant each.

A customized version of the report is available from Unisys.

The 2023 ISG Provider Lenstm Private/Hybrid Cloud - Data Center Services report for the U.K. is available to subscribers or for one-time purchase on this webpage.

About ISG Provider Lenstm Research

The ISG Provider Lenstm Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

A companion research series, the ISG Provider Lens Archetype reports, offer a first-of-its-kind evaluation of providers from the perspective of specific buyer types.

About ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world's top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries?a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry's most comprehensive marketplace data. For more information, visit www.isg-one.com.

These press releases may also interest you

at 18:50
The global lithium-sulfur battery market  size is estimated to grow by USD 3.92 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of  44.97%  during the forecast period.  Harmful usage of lead batteries leads...

at 18:35
Carlisle Companies Incorporated today published its 2023 Corporate Sustainability Report, highlighting progress toward its sustainability goals through its three-pillar sustainability strategy and culture of continuous improvement fostered through...

at 16:40
B&G Foods, Inc. announced today that it has completed its previously announced tack-on offering of 8.000% senior secured notes due 2028 and credit agreement refinancing. Closing of Tack-on Offering of Senior Secured Notes On July 12, 2024, B&G...

at 16:30
Select Medical Holdings Corporation ("Select Medical," "we," "us," or "our") today announced an estimate of certain financial results of its wholly-owned subsidiary, Concentra Group Holdings Parent, Inc. ("Concentra"), for the second quarter ended...

at 16:10
Announcement of Mesabi Trust Distribution The Trustees of Mesabi Trust declared a distribution of thirty cents ($0.30) per Unit of Beneficial Interest payable on August 20, 2024 to Mesabi Trust Unitholders of record at the close of business on...

at 14:34
Innova NanoJet Technologies Limited, a supernova of air purification/disinfection industry after having won numerous awards and recognition from industrial experts and investors since its maiden debut in CES 2024, proudly held the grand opening...

News published on and distributed by: