Forecasts for the data centre market in Poland: COVID-19

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A completely new factor for the market, not previously taken into account in the assessment of the market situation and forecasts, is undoubtedly the coronavirus pandemic. While working on the current edition of the report: “Data centre market in Poland 2020. Market analysis and development forecasts for 2020-2025”, this factor was considered.

PMR has interviewed senior managers and the boards of market participants to determine how they assess the overall situation from the perspective of their businesses. The main conclusions are presented below:

• Data centre providers are monitoring the coronavirus situation and fully adjusting to the prevailing epidemiological conditions.
• None of the 40 largest commercial data centres in the country have been closed to customers. In the case of some suppliers which operate globally, restrictions have been introduced in some countries. For example, Equinix, despite the full operation of all its facilities, has limited customer access to these facilities in France, Spain, Germany, Italy and the UK.
• Suppliers have agreed to impose additional restrictions on customer visits to their facilities. At the same time, they have recommended, even more strongly than usual, the use of remote access and barred their technicians from the facility.
• The impact of COVID-19 on data centres in the short term represents primarily a sharp increase in traffic, as a result of consumer congestion caused by increased demand for e-learning, remote working, TV viewing, online gaming and other activities. During the initial period of the pandemic, traffic exchange points recorded unprecedented traffic loads.
• At this point in time it is too early to present a clear assessment of the impact of COVID-19 on business in the medium and long term. There is a great deal of anticipation and uncertainty, and the effects of the freezing of new projects will be accompanied by a delay in the second half of the year. The winners will be those companies which hold a substantial proportion of services in the subscription model, as practically no new projects are anticipated for six months. It is possible that contracts may have to be renegotiated with some important customers who were affected by the crisis during the first wave and who immediately felt its direct impact. Otherwise, there is a serious threat to any revenue from such a client.
• The main advantages of the pandemic, according to the suppliers, are, undoubtedly, the forced digital transformation of enterprises, the increased importance of the online channel, e-commerce and remote work, and the popularity of cloud solutions and services offered and maintained by quality assurance providers. Companies are paying attention to the growing importance of DRC, business continuity and back-up services.
• The main negative effects of the pandemic are related to the deterioration of the economic situation and weaker macroeconomic indicators. This could result in payment bottlenecks. The crisis may adversely affect the SME market in particular. It will also be unfavourable for the market for companies to freeze projects, limit expansion and new projects, and exert pressure in the search for cash and the maintenance of liquidity.
• In most cases, the investment processes of data centre providers are not threatened, particularly with regard to investments already planned. Here, companies do not see any threats to themselves, although they expect possible delays and changes in the work schedule, if only because of problems associated with subcontractors.