The Impact of Brexit on the Data Center Industry

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Brexit has had an immeasurable impact on all aspects of British society, and data centers are no exception. Supply chain continuity has already been damaged and there is a growing demand for data sovereignty.

Much of the uncertainty over what Britain’s withdrawal from the EU means for UK data centers remains, making it likely that the impact of Brexit will continue to be felt by many in the industry. industry in the years to come. Ongoing negotiations and concerns about data relocation leave open the possibility of further data regulation. This will force many data center providers to take proactive steps to ensure their centers can still transfer data from the EU.

Supply chain continuity

Data centers depend on a large supply of fuel so that generators can maintain availability under all circumstances. Therefore, strong supply chains are paramount to business operations. Due to a combination of an energy crisis and disputes with Brussels, fuel supply lines to many data centers were compromised in the fall of 2021. With both of these factors still ongoing, it is not difficult to imagine that these problems will persist in the months and years to come.

Responsible data center providers will need to take additional steps to prevent this from affecting their business in the future. From mapping the supply chain to ensure end-to-end visibility of the fuel journey to a geographically diverse range of fuel suppliers and performing dry trials, data center providers will need to take these steps. to ensure that Brexit negotiations and disputes do not present a critical incident for their supply chains.

Data sovereignty and why companies are more demanding with their data

In many cases, it can be difficult to identify a causal correlation relationship between Brexit and the data center industry. However, this is not the case with data sovereignty. Although the UK still primarily adheres to the EU’s General Data Protection Regulation (GDPR) via the UK GDPR, the latter regulation having been implemented after Britain left the EU, The data center industry has seen a marked increase in demand for sovereign hosting methods within Britain.

Much of this is due to Brexit, which prompted a realization of what data hosting meant in real terms to many. The prospect in 2016 that UK businesses would have to move their data from servers to Dublin or other parts of the EU, due to the possibility of new data regulation at the time, led to huge demand. UK data centers and colocation services from UK companies. No one wanted to be interrupted, unable to transfer their critical EU-based apps to the UK after new legislation was imposed.

Although this eventuality never materialized, this demand continued to grow. Initially triggered by Brexit, an awareness of the physical location of data has led consumers to be more critical of hosting ambiguity. Companies want to be able to locate their data exactly and have physical access to it more than ever.

Prepare for the new data regulations

Although the UK government currently adheres to GDPR standards, the risk-averse nature of the data center industry means that many will be preparing for possible changes in data regulations. Indeed, the growing awareness and caution of data sharing across the world is likely to lead to more data regulation legislation, which Britain has now had free rein since leaving the EU. EU.

Additionally, although the UK’s data protection policies were confirmed as adequate by the European Commission in June 2021, this decision may be reviewed and data policies may change in the future. Britain’s new Information Commissioner, John Edwards, has been appointed because of his previous work developing New Zealand’s data policy, and is expected to shake things up by building the government’s desired “regime of data more favorable to growth and innovation”. Any deviation from the GDPR ruling due to new UK regulations could seriously complicate the process of transferring data from EU cloud storage to UK data centres, and in some cases could be made illegal.

There are methods that would allow data center customers to legally transfer data located in the EU to their UK servers in such circumstances, such as Standard Contractual Clauses (SCC) and Binding Corporate Rules (BCR) . But these must be pursued by each individual client, presenting opportunities for those who do and risks for those who don’t.

Moving forward

Data center providers are inherently risk averse. The mission of supporting the online function of other companies by maintaining server availability requires a careful approach. While many suppliers have already successfully adapted to the risks Brexit presents, the continued uncertainty and impacts of Britain’s withdrawal from the EU mean they will need to continue to adapt for the foreseeable future. and beyond.

Photo credit: Pixelbliss / Shutterstock

Adam Bradshaw is Chief Commercial Officer at ServerChoice.

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