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Expanding Into Europe?

Harm Joose, Global Head of Strategy & Business Segments, Service Providers
November 14, 2022

A Data-First Strategy Will Help You Succeed

Europe is an attractive destination for US and APAC enterprises and service providers seeking to accelerate growth by expanding overseas. It offers some of the world’s largest economies, as well as a wide variety of markets and industries to target.

However, expansion no longer depends on simply building business operations in new markets. Given enterprises’ reliance on data-driven insights, the expansion also requires managing their increasing volumes and distribution of data. And to this end, Europe is well served by mature and thriving data center hubs.

Nevertheless, as with any form of expansion, entering the European market has its challenges, not least compliance with local regulations. At the same time, the pressure is on companies to extract every bit of value from their data to ensure their growth plans can succeed.

The good news is that you can mitigate those challenges with careful planning and due diligence, particularly when setting up your data infrastructure. What’s more, with the right infrastructure in place, your enterprise will be better placed to take advantage of Europe’s many opportunities.

Tapping into Europe’s opportunities

Expanding into Europe enables US and APAC enterprises to greatly extend their reach, while also optimizing the performance of their data infrastructure. To list just some of the opportunities:

  • Europe is the world’s largest single market, with more than 440 million consumers and 29 million enterprises
  • It offers rich and diverse markets but with a unifying organization, the European Union (EU), reducing the complexity of doing business in many of these markets
  • Europe is home to eight of the world’s ten largest Internet Exchange operators, including Frankfurt’s DE-CIX, Amsterdam’s AMS-IX, London’s LINX and Sweden’s NETNOD
  • Europe is also a global nexus of submarine cable connection, providing essential nodes in the world’s largest data networks. As well as underpinning high quality internet connectivity, these cable routes are spurring the development of low-latency digital sectors
  • Europe is close to growth areas such as Africa, making it an ideal digital gateway to other global markets
  • Many European locations offer affordable, renewable energy to power data storage and processing
  • The world’s largest data center platform, PlatformDIGITAL, with more than 290 data centers across 26 countries
  • ServiceFabric Connect, a global interconnection and orchestration platform designed to support companies as they transition to hybrid IT and data-centric architecture by seamlessly connecting them to global cloud, network providers and business partners
  • A long European heritage and extensive data center network with a presence in every major metropolitan area across the continent
  • Europe’s best-connected data center facilities, according to Cloudscene, with fast, secure, direct connections to Amazon Web Services, Microsoft Azure, and other major cloud services
  • A connected community of more than 700 connectivity and technology companies, including major carriers such as AT&T and Verizon
  • Global leadership in data center sustainability innovation and best practices
  • An industry-leading record of 15 consecutive years of 99.999 percent uptime
Addressing expansion challenges

Of course, entering the European market is not always a straightforward process. A notable challenge is complying with the EU’s General Data Protection Regulation (GDPR). Its tough rules for protecting consumers’ personal data include restrictions on transferring that data outside the EU.

Another issue is how to manage data gravity — the phenomenon where increasing volumes of data attract more applications and services such as analytics and machine learning, creating even more data. That’s a challenge everywhere, but especially in Europe, the Middle East, and Africa (EMEA), which has the highest data gravity intensity among global regions.

While this illustrates Europe’s leadership as a thriving data hub, it also highlights the challenge for IT leaders in managing the increasing volume and distribution of enterprise data as they expand into Europe.

Planning a data-first expansion strategy

To succeed with your European expansion, it’s therefore vital to plan carefully and have a data expansion strategy. That means starting with the right data architecture. And according to Digital Realty’s Global Data Insights Survey, 44 percent of enterprises with at least US$1 billion in annual revenue have their data decentralized.

In practice, that’s likely to mean deploying data infrastructure on the ground in Europe. Minimizing the physical distance between data and users will help cap bandwidth costs and optimize performance, improving latency and quality of service. In addition, locating your infrastructure in an EU country may be vital for GDPR compliance.

Your data expansion strategy also needs to align with your business’s growth plans. For an ambitious plan, you might consider deploying points of presence in Europe’s four major data hubs: Frankfurt, London, Amsterdam, or Paris.

If you have more specific plans, consider the benefits of other locations, such as their proximity to targeted expansion areas or industry precincts. For example, Marseille is the landing station for a large number of subsea cables and is close to North Africa and the Middle East, Stockholm might be an ideal gateway to the Nordics and Baltics, and London has one of the world’s biggest financial services centers.

Global enterprises have more to consider. Data needs to be securely aggregated and shared to unlock more insights across the company. That’s not easy given their ballooning numbers of data sources and complex hybrid infrastructure requirements.

Traditional data networks that rely only on high-traffic backhauls for connectivity are no longer good enough. A global enterprise needs a global data network with fast, secure connections between points of presence — and with key technology partners and service providers.

Choosing the right infrastructure partner

Successfully expanding into Europe therefore requires working with a global data infrastructure partner that can support all these requirements. At Digital Realty, for example, we offer:

Just as important, we have people who deeply understand the European market and the needs of global enterprises. And we also know that speed to market is critical. Our aim is to make it easy for customers to do business here.

If they succeed with their European expansion, we know we’ve done our job.