Consolidation of Polish colocation market

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The Polish data centre market remains very fragmented, and some say that its consolidation – due to the diversity of entities operating on it – seems very difficult. Will the development through further acquisitions involve Global Compute – the new owner of ATM?

Polish data center market in the spotlight

The acquisition of ATM by Global Compute Infrastructure LP, announced in recent days, only confirms that the Polish data center market is currently in the spotlight of investors. New investment projects for the construction and expansion of data centres are driven by external demand from leading hyperscallers led by Microsoft, Google and in a moment also AWS. The largest telecommunications operators are investing in data centres in Poland: Netia (Cyfrowy Polsat Group), T-Mobile or Orange, which this week officially confirmed the construction of another data centre in Łazy near Warsaw. The colocation leaders, headed by ATM and Beyond.pl, are also expanding. Vantage Data Centers also announced a huge investment in Warsaw.

Consolidation vs. acquisition + green field

The acquisition of the market leader, however, raises the question about the consolidation of the domestic market, which is progressing, but still mainly locally (acquisition of Krakow’s Onet data centre by Netia). There are also further ownership changes, such as the purchase of 3S by Play. It should be noted, however, that the market leader – ATM – still has a  market share of “a dozen or so percent”, regardless of the criteria adopted (floor space, power, revenues). In the background to the recent ATM acquisition, there is Goldman Sachs and Digital Realty, which a year ago was successfully involved in the European giga merger with Interxion. Two other foreign players on the Polish market, i.e. Equinix and EdgeConnex, also started their market entry with the acquisition of local companies, but then focused on greenfield investments, which they are now successfully continuing in Warsaw. Will a similar path be taken by the new owner of ATM and it will focus on scaling up ATM’s business by building more server rooms at current locations by adding another thousands of square meters of floor space and another MWs of power?

The fact is that ATM has successfully developed its plans to expand both Warsaw colocation facilities. It officially announced in May 2020 the start of construction of the F6 facility. The new building has a potential of nearly 1,500 m2 of net space, but within the entire campus, ATM’s capacity is as much as 9,000 m2 of new net floor space (that is what the plot allows). ATM also has the possibility of developing additional space (1,650 m2) in the Warszawa-2 Data Centre. So there is room for expansion, all the more so as this way market shares will certainly go up. As a result, it may turn out that the way to polarise the colocation market by a few of the largest investors may be large own investments, thanks to which they will strengthen their position on the market, leaving smaller local players with an even thiner piece of pie.