Thankfully that’s rarely an issue in a place like Sweden where high-speed connections are available in virtually every home. Most of us know that’s partly thanks to the high-quality fibre optic cables that have been laid in the ground from north to south up and down the nation.
But many aren’t aware that the colocation industry also plays a critical role in making our online experience smooth. Indeed, most of us don’t even know what it is.
Put simply, the colocation industry gathers data centres and companies such as telecoms firms in order to offer secure data storage and management solutions, as well as seamless internet connectivity to customers.
“Our modern, connected lives require an enormous amount of capacity online to be able to handle the data and applications that we are using day and night”, says Mats Nilsson Hahne, an expert on the colocation industry.
With the advent of social media, streaming services and cloud computing, the nature of data has become ever more fragmented. It’s not about managing your own little corner of the internet anymore — it’s about working together to create the most critical nodes for information sharing in society today.
The modern colocation industry is rapidly moving away from individual companies such as banks and government authorities using in-house data centres towards organisations managing data through colocation clusters instead. It’s simply not cost-effective to run your own data centre anymore.
With that in mind, it’s perhaps not surprising that the colocation market’s growth figures are staggering. Worth just over USD38 billion in 2018, the global colocation market is expected to swell to USD100 billion by 2025. “I see the market continuing to outpace itself in the next decade”, says Hahne. “And Sweden — with focus on Stockholm — is becoming an attractive choice for many companies looking to offer colocation services in the Nordics.”
Stockholm has by far the highest share of the network traffic in the Nordic region at 55 percent. There are now 35 colocation centres up and running in the Swedish capital. That capacity is only set to increase with the new deep-sea cables connecting the US and Nordic markets, and with the establishment of global tech giants such as Amazon Web Services, Microsoft and Facebook.
With wind power production surpassing 20 TWh in 2019, Sweden is the largest producer of wind in the Nordics. Many of the tech giants have discovered this and have invested heavily in wind parks across the country. Sweden’s geographical location is also a plus: the colder climate helps bring costs down when it comes to cooling data centres. Add in the fact that Sweden has the lowest energy prices in Europe, in addition to being run almost entirely on fossil-free energy and it becomes an even more attractive proposition.
“It’s great to see that sustainable energy is becoming a deciding factor for many companies wanting to set up shop in Europe, and therefore they’re considering Stockholm”, says Tora Holm, who helps foreign data centre companies to establish in the Swedish capital region.
Industry strongholds such as Frankfurt, Amsterdam and London have traditionally been first choice for colocation businesses launching in Europe. However, Stockholm is now emerging as the location that can offer the strongest green edge. The city even transfers the energy generated from data centres into the local central heating system. To date around 30 data centres in Stockholm feed excess heat back into the grid – and get paid for it!
Another fact that usually surprises data centre operators is that you can reach a population of 350 million people within the technical requirements on latency that most data centres operate under – well below 50 ms. That kind of speed is dependent on high-quality infrastructure that allows for data to travel uninterrupted — and for you to be spared any cliffhanger misadventures as you stream your next episode of that special series.
As the industry continues to evolve, Stockholm is poised to grow ever stronger as a base for colocation players. “Sweden is in a good position to take a bigger market share, especially as the sector specialises further into areas such as artificial intelligence and Big Data,” says Tomas Sokolnicki from Business Sweden, who has been working with the sector for several years.
Stockholm’s competitive advantage rests on its long tradition of technological innovation and the agility of local telecoms firms. Colocation players who are ahead when it comes to AI and high performance computing will take the lead in the next generation colocation market. With the highest share of connectivity, colocation capacity and client base in the Nordics, that’s Stockholm in a nutshell.
International colocation firms that have a presence in Stockholm:
Equinix — a colocation industry giant headquartered in the US that runs 200 data centres across the world is scaling up in Sweden from its colocation hub in Sköndal, Stockholm.
"Sweden is an attractive market; it is cost-efficient thanks to low energy prices, and it’s politically and financially stable. Plus the climate here helps in reducing our impact on the environment when we cool our data centres."
Maria Sundvall, Managing Director, Equinix Sweden
DigiPlex — spurred on by the rise of AI, the Internet of Things and Virtual Reality, DigiPlex is investing heavily in expansion of its colocation businesses across the Nordic region.
"For years, Stockholm has been in lead position for the IT sector in northern Europe. The city has a strong start-up scene and is the main hub for many high-tech firms that are pushing the boundaries of technological development. International players think it’s easy to do business here and many are attracted by the country’s fossil free energy offering, which makes it easier for them to reach sustainability goals."
Fredrik Jansson, DigiPlex Chief Strategy & Marketing/Communications Officer
Advania Data Centers — Iceland’s leading colocation business serving clients with supercomputing or high performance computing needs that also has a presence in Sweden.
"To continue to be true to our environmentally responsible core value and mission we found Stockholm to be an expansion location that fit our core values really well. In Stockholm we could both power our data centres with carbon neutral energy as well as better utilise that energy by using heat from the powerful data centre computing infrastructure to heat houses in Stockholm. We believe our new Stockholm data centre will provide great value to our customers, both on the local Swedish market and internationally."
Eyjólfur Magnús Kristinsson, CEO Advania Data Centers