Phil Lydford, European sales and marketing director for the London, UK-based European arm of Telehouse International Corp, said it currently has 30,000 sq. meters (or roughly 300,000 sq. ft) of data center space under management, with the new capacity it is about to announce measuring in excess of 8,000 sq. meters.
The backdrop to this move is a co-lo market in a fairly ebullient state in the UK after a considerable downturn in the early part of this decade. Telehouse, which has data centers in the UK and France, ranks third or fourth by managed space in Europe, according to Lydford, with TeleCityRedbus Group as the market leader ahead of Interxion Carrier Hotels BV and The Global Switch Ltd Partnership. Behind Telehouse would comes IXEurope Plc.
All the players mentioned have been acquiring assets from other players and/or announcing extensions to their existing infrastructure or new builds this year in the UK, where prices have been firming up and, in TeleCity’s case, increasing significantly, albeit its competitors say it is actually coming from behind with its pricing and is thus still catching up to them with its current 550 pounds ($1,045) per rack per month. Lydford confirmed that this is the same ballpark in which Telehouse has been for the last couple of years.
Where Telehouse does not intend to go, however, is to the 800-pound ($1,520) monthly figure TeleCityRedbus CEO Mike Tobin has said he considers desirable and achievable for his company, a level he argues would put the UK more in line with US co-lo pricing.
His competitors question the wisdom of such a move, however, particularly as there will be more capacity in the UK market next year, while other markets like Germany are still in a depressed state, so much so that Telehouse last year effectively withdrew from that market by selling a majority stake in its business there to local player Bridlepath GmbH. Some also suspect Tobin is talking up his company’s ability to take prices higher in preparation for a return to the stock market via an IPO next year.
If I bring online a new co-lo facility in the UK in a year’s time at 600 pounds a month with Telehouse’s reputation, and another company is charging 800 with no better reputation than ours, where will customers go? Lydford asked rhetorically.
He added that, unlike a lot of its competitors, Telehouse, which is 85% owned by Japan’s KDDI Corp, is not in the market for acquisitions because there’s a lot of infrastructure around that’s available but out of date in terms of its power and cooling facilities, so acquisitions only make sense if you’re buying a customer base.
