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Amsterdam is fed up with other data's

22.07.2019

City authorities have limited the construction of data centers.
In recent years, the capital of the Netherlands has tried to fight off the excessive flow of tourists, limiting the work of Airbnb and imposing a ban on visiting the "red light district". But, as it turned out, travelers are not the only ones who greatly loved Amsterdam and its suburbs. In recent years, technology companies have opened dozens of data centers in the region. And it became a problem.

There are really a lot of data centers in the capital itself and within a radius of 50 km - 70% of their total number are located throughout the country and one third of all data centers in Europe. At the same time, the authorities claim that there is no such number of them as in Amsterdam in any other major city of the world. This week, the municipality imposed a temporary moratorium on issuing permits for the construction of data centers in the region at least until the end of 2019.

Technology companies attract low taxes and cheap electricity in the Netherlands. Due to this, the country has become one of the largest technological hubs in Europe with 430 fintech companies (data from Holland Fintech). Data centers near Amsterdam were built by such giants as Microsoft and Alphabet. Microsoft has a regional cloud computing center here, and Google announced in June that it intends to invest another € 1 billion to build a new data center in Agriport, 30 km from Amsterdam.

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“We need to take a break and first formulate the rules so that we can better control the location of the data centers,” said Mariette Söde, a city member of the Amsterdam suburb, Harlemmermer, quoting Bloomberg. The influx of technology companies, coupled with the ever-growing tourist flow has already led to the fact that housing in Amsterdam becomes inaccessible to the majority of city residents.

According to a Knight Frank survey, Amsterdam is one of the least accessible major cities in the world in terms of housing costs. Over the past five years, property prices here have increased by 64%, while the average income of residents has increased by only 4.4%. The average price of a house / apartment in the capital now amounts to € 450 thousand, while in the country this figure is about € 300 thousand.

Another problem is the increased load on the grid, because data centers require a significant amount of electricity to process large amounts of data.

The Data Center Association of the Netherlands (Dutch Data Center Association, DDCA) said that the data processing centers of the companies that make up the association provide themselves with 80% of their electricity from renewable sources. But according to the Amsterdam authorities, this is not enough.

As for the decision itself to stop issuing permits for the construction of new centers, the DDCA noted that "the infrastructure of data centers attracts international technology companies and brings many jobs." "We are surprised by such a tough decision that was made right now and so unexpectedly," the association said.

Amsterdam can be considered the first city to openly limit the fast-growing data center industry. Other regions, on the contrary, are trying to actively attract players from this market. According to the CBInsights report, by 2025, the total amount of data stored and transferred from server to server will reach 175 zettabytes. And the market itself will grow to $ 228 billion by 2020.

Companies — data center operators are guided by several key principles when choosing a new center construction site:

    cheap electricity,
    market regulation
    tax regime
    availability of fiber optic networks,
    climate.

Therefore, many large data centers are located near rivers and hydroelectric power stations or in countries with a cold climate.

The most popular with the industry are the countries of Northern Europe. The cold climate saves on cooling server rooms. Electricity is cheap here; moreover, in these countries environmentally friendly methods of energy production are highly developed. In addition, local authorities are actively stimulating the market with tax incentives.

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So, in Sweden, a couple of years ago, data center operators were almost completely removed from the electricity tax, which allowed them to reduce costs by about 40%. This was done to attract operators to the country and help local companies compete with foreign players. But already this year, the tax administration of the country changed the rules of the game: if before, local providers of premises received benefits, now the owners of servers and equipment, that is, technology companies like Microsoft, Google, Amazon and IBM, are exempted from taxation.