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The ongoing soap opera from the UK government aside, the post-Brexit transition conditions for datacentre operators remain in dire need of clarification if businesses are to prepare in time for 1 January 2021. Especially if, as seems likely, a no-deal – or, at best, a bare-bones agreement – is on the cards.
John Booth, managing director of consultancy Carbon3IT, confirms he is hearing of longer supply chains and lead times. During Covid, inventory has been subject to short delays – and backlogs might build up partly as a result of socially distanced factories producing less.
“Getting in a transformer, for instance, would normally be about four to five months, and now I hear it will be six months-plus,” he warns.
Capital plant shortages in transformers or switching gear are possible. Chillers in stock might not work properly with equipment from different manufacturers. Kit such as uninterruptable power supplies (UPS) may integrate components from multiple suppliers. So operators should be reviewing supply chains, analysing where kit is coming from and looking for potential problems, including bottlenecks.
“For legacy datacentres, you should hold stock of your most used consumables on site. International or European datacentres should have a warehouse somewhere storing significant plant items,” says Booth.
Resulting cost increases can be expected to rise further in the case of a no-deal Brexit. Booth says some suppliers are estimating rises of 10-15%. And that’s before an operator has begun to consider potential issues around staffing and skills after Brexit, with a view to retaining access to European Union (EU) markets.
Personnel based in one country may travel weekly to sites in other countries. If they are UK-based, they’ll need passports with six months left for EU travel. Furthermore, countries may require PCR testing for Covid-19, with quarantine requirements to follow.
UK business travellers may need a separate visa for each EU country they expect to visit, with all the potential for costly backlogs and bureaucracy that entails. Employers may be expected to assist, but will they be prepared to do so by January?
“If one country puts onerous requirements on, other countries will retaliate,” Booth notes. “It will cause individual pain. You might even have trouble finding an apartment lease for a year because people at the other end will have to make sure they are complying with local laws.”
UK-trained electricians, engineers or other staff might also need to requalify for work across the EU. EU-qualified professionals only have to be recognised for one additional country; in a worst-case scenario, Brits might have to take exams for 27.
“Training companies will weave a path through the rules to accept UK equivalence subject to a certain refresher certification stack. Again, that will cost money and time,” says Booth.
Additionally, UK energy generation remains stretched, according to Booth, with new UK power stations a few years away and new interconnectors being built. Even 45-minute blackouts can have huge effects on, for instance, rail networks.
“Any disruption could be interesting,” he points out. “We only used to need the interconnectors from France, Belgium and the Netherlands in the evenings. Now it’s 24 hours a day. In 2010, there was a 10% margin [in UK generation], with assets they could fire up if something went offline. Now it’s down to 1%.”
Andrew Buss, research director for European enterprise infrastructure at IDC, agrees there will be an impact of uncertain severity. So it makes sense to prepare for a worst-case scenario – especially since any deal looks unlikely to cover services.
“We don’t know all the assumptions we need to work to,” he says. “One difficult question will be market demand; one of the biggest drivers of colocated datacentre capacity and cloud has been, for example, connection services.”
Some customer segments, such as financial services, may continue to move assets and operations to the EU, likely affecting UK datacentres reliant on that market. Some of the gap may be filled by growth in other segments, however.
Business customers might reasonably be expected to continue moving towards colocation or even public cloud. This may even accelerate as the renewed emphasis on cost savings and sustainability alongside continued remote working after Covid means centralised office locations make less sense than ever.
Hyperscalers can often deliver power usage effectiveness (PUE) of around 1.05 within their facilities, while the top colocation providers frequently hit 1.1 or 1.15 – compared with a typical enterprise on-premise PUE of 2.0-2.5, Buss points out.
“Companies are realising it’s hard to build their own world-class datacentre. More and more, when it comes to refresh time, they’re going to look at colocation,” he says. “Why do you need an on-prem datacentre when you can rent space from a specialist providing lots of interconnectivity, reliability, resiliency, security and so on?”
Issues with visas and skillsets, despite the unveiling of the new points-based immigration system, remain uncertain to a degree, he agrees. However, much of IT training can be achieved fairly quickly, compared with – for example – the typical seven university years for medicine.
“Electricity is always a risk, yet we don’t know that anything will change. The assumption is we’ll still have power,” says Buss. “I think most colo sites are heavily redundant. If there are times when the grid is offline, they should be able to cope, and they’re probably going to be more reliable than your own home-built facility.”
Data adequacy has been widely discussed in Computer Weekly. Again, there will be some difficulties and increased costs. Datacentre operators should look at the changes that affect data transfers outside the EU currently for guidance: in the US, the Privacy Shield has already been struck down, so models are already out there that can guide third-country requirements.
“You will just need bespoke contracts with the companies you’re working with. To provide equivalence to what’s available in Europe, it does mean due diligence will be required,” says Buss. “Brexit won’t stop data transfers. It will make it more paperwork-bound, and more expensive. It will not cut red tape.”
Emma Fryer, associate director for datacentres at TechUK, says the association has been tracking the situation and lobbying for more substantial movement from the government for the past four years.
“It has been a bit like EastEnders or Coronation Street – loads happens all the time, but nothing really changes very much,” she says.
“Outside the data adequacy and data flow issues, we have been talking about skills, energy costs and supply chains in terms of trade, inward investment and whether the UK remains competitive or an attractive destination for expansion or starting off an operation.”
During Covid-19, she notes, operators were running low on inventory. Items are taking 24 weeks to arrive instead of 16, as in the past. While operators have been cutting costs and increasing efficiency, doing more remotely, costs are certainly expected to increase. That includes around skillset availability, considering a good EU pipeline of skilled staff into the UK will now be more difficult to achieve.
“We advocated strongly for datacentre roles to be added to the Shortage Occupation List. We were also very pleased at the lowering of the wage threshold,” says Fryer.
Neil Ross, policy manager for digital economy issues at TechUK, agrees trade frictions are set to increase costs and compliance impacts – although datacentres by their nature are all about continuity and managing risk, so conceivably might be expected to prepare well compared to other types of business.
“Also, data adequacy issues have been known for a long time. So, for that, we know what to do. Whereas for other sectors and other spaces, there are still big question marks, and Northern Ireland issues are not yet finalised,” Ross confirms.
“But it is really difficult to predict, even then, and also because of the economy more generally. The adjustment hasn’t actually happened yet.”
Ross says the UK negotiators look likely to take things “down to the wire”, probably delaying final decisions and plans for businesses to late December.
“Our advice to all members is that, no matter what happens, the terms of trade are changing with the EU. However, we have about 60-80% of the information we need and you must action this now. Do not wait until after, because there will be a colossal amount of work to be done, and you may only have a week.”
Simon Michie, chief technology officer at colocation provider Pulsant, says its resilience strategies through Covid-19 have stood it in good stead, with procedural changes made to increase safety and reduce risk.
He says that since its datacentres and most customers are UK-based, it does not expect a significant January impact.
“Our sites are also cloud-ready, for direct, quick connections to an ecosystem of cloud providers – with the reassurance that data remains in the UK, with no transmissions outside,” says Michie.
Mark Pestridge, sales director at colocation provider Telehouse, says it doesn’t expect any price rises or additional expenses at the minute, pending new or future legislation and government policy.
The operator has also performed a full supply chain analysis and examined potential service disruption scenarios, including seeking reassurance from critical suppliers, to ensure that it can operate normally beyond 1 January 2021.
“We are confident that we have appropriate systems and processes in place,” Pestridge confirms. “We are working closely with our suppliers to maintain contractual service levels and lead times and to be immediately notified if our suppliers suspect or anticipate any delays.”
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