Gartner Says IT Managers Can Cut Colocation Costs in Europe by Moving North

Gartner, Inc. today said that consistently low energy prices and favorable environmental conditions in Northern Europe present an opportunity for IT managers to save up to 50 percent on their colocation expenses by moving north.

Amsterdam, Frankfurt, London and Paris represent the major colocation centers for multinational and Pan-European businesses. However, power costs in Norway and Sweden have fallen by five percent since 2010, while the EU average has risen by around 13 percent in the same period. Moreover, combined with efficiencies from using outside air cooling there is a clear economic and environmental advantage to hosting IT infrastructure in the northern part of Europe.

“It’s important to weigh up several key decision factors when considering moving workloads away from the major colocation hubs to Northern Europe,” said Tiny Haynes, research director at Gartner. “However, in most organizations there are several IT functions such as data warehousing or browser-based apps that simply do not warrant the significantly increased running costs of colocation in a major hub.”

Gartner has outlined some key decision factors to consider in the decision to move north:

Network latency: Some applications like VoIP systems and virtual desktops need a low latency environment to function well, while others simply do not. Categories applications and assign them a suitable location accordingly.

Application requirements: Some applications are standalone, while others are integrated with a range of connected systems. If the application is interdependent, it’s best to keep all the constituent parts within the same data centre infrastructure to avoid timeouts

Security compliance: Data protection laws vary between countries, and certain data or applications that use data may not be suitable for use outside specific geographies.

Power availability: Consider not just the availability to your rack, but also to the data centre and the country itself.

Cooling costs: Consider both the ongoing power usage effectiveness as well as the cooling methods available.

Price: The price of per kilowatt (kW) of infrastructure as well as per kilowatt per hour should be evaluated.

Support: This should either be in-house support from technical teams nearby or support provided through the supplier.

“If considering these factors reveals an opportunity to move workloads and applications to another location, it’s also very important to properly map out the costs over a lifecycle,” said Mr. Haynes. “A cost estimate should be considered over at least three years and take into account several price components that make up the total cost.”

Common colocation costs include: 

Colocation setup: The vendor charge for the commissioning of space with power, network and cooling infrastructure.

Migration: Cost of moving hardware and applications between data centers, including project management, transportation and even staff out-of-hours costs.

Rental: Cost per kW for the data centre space and infrastructure.

Power Consumption: Cost per kW per hour for energy used.

Support: Cost of remote hands or in-house travel

Decommission: The removal charge from the provider at the end of the contract.

“Once these criteria are applied, it’s likely that most organizations will find some workloads that can be moved to a lower-cost location without impacting performance,” said Mr. Haynes.

More detailed analysis is available in “Save Up to 50% on European Colocation by Choosing the Right Location.” The report is available on Gartner’s Web site at

Gartner analysts will examine the effects of local energy prices, green taxation laws and transportation costs on the cost of IT infrastructure at the Gartner Data Center, Infrastructure & Operations Management Summit 2014, being held on November 24-25 in London, and the Gartner Data Center, Infrastructure & Operations Management Conference 2014, held in Las Vegas on December 2-5. For further information about the Summit in London, please visit More information on the Las Vegas event is available at

Information from the Gartner Data Center, Infrastructure & Operations Management Summit 2014 events will also be shared on Twitter at using #GartnerDC. Members of the media can register for the events by contacting [email protected].

About the Gartner Data Center, Infrastructure & Operations Management Summit 2014

At the Summit Gartner analysts will explain how IT leaders must act quickly to take charge and lead data centre transformation — or risk being left behind. The Summit will provide actionable strategies to help decision makers balance the need to deliver reliable IT services with the need to drive digital innovation in their businesses.

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