 Welcome to JSA TV Europe and our live today events on 2023 predictions. I'm Jean-Marc Lehmann, joining me today is Marc Acton, a data center consultant, chartered engineer, chartered IT professional, standards expert, as well as chair of the EU Code of Conduct on data center energy efficiency development. Marc, that's a mouthful of titles. But it just inspires the party of a very busy man and you have your fingers in a lot of different pies and very interesting ones as well. So with that said, I want to maybe grab your ideas around what have been the major events that have defined the data center space in 2022 so far. So far, I mean, there's only two weeks left for the year, but the major events. Yeah, firstly, thanks for having me. And just looking back on the year, what I think has probably been the most interesting area or the biggest area of development is really, I think, maybe the boom that's been happening in Africa, particularly, that there's been an awful lot of interest in Africa. And I think generally not just Africa, but in tier two and tier three sites in Europe and beyond. But Africa, I think has really seen some of the most dramatic changes. And you've also seen a lot of M&A activity, you know, main one taraco being acquired. I X Africa building out in Nairobi. And then just recently in the last week or so, you've had big announcements from, from major players down in South Africa, you know, disreality and vantage of making some big commitments down there. So I think the really big one for me is, is Africa, the growth. It's always had the potential, you know, a billion people there who were probably underserved by digital infrastructure at the moment. But so I think, yeah, that's been probably the biggest one. But M&A activity generally in the sector throughout 2022 has been huge. I mean, you know, vast amounts of activity in that area, which I think is probably going to continue through into 2023 as well. Especially the record breaking deals of $10 billion plus, which we haven't really seen them before. We've seen big stuff, but not as big as that. It's a very active. Absolutely. I think up to October is about 30 billion in deals and another sort of 10 billion plus pipeline. You know, so there's a, there's a lot to go and a huge amount has happened. It's very much seen as a, you know, as a period of consolidation, but I think also it's, it continues to be a very, very interesting asset class for investors. You know, so people are still keen to put money into the, into the sector. Interesting. But I mean, as we, we move into a new year, there's still a few challenges looming, especially around inflation and the cost of capital and all that, which some might say it will maybe hinder a little bit of the deals that we are used to see. Maybe instead of buying full platforms, we're going to see a lot more just asset by asset acquisition as opposed to full platforms. Well, my question was like, how do you envision that? I think, I think uncertainty generally is always going to upset the market. But I think, again, the data center market is going to upset all markets, isn't it? It's not just going to set the data center market. And I think the data center market has been particularly resilient over the last sort of decade or so, despite other other asset classes really struggling. So I think it will continue, you know, there's going to be growing demand and growing need for digital infrastructure generally. And that digital infrastructure lives in data centers. You know, whatever kind of data center it is, and we can talk about Edge, we can talk about the drive for data sovereignty. You know, we can talk about all sorts of different things which are drivers, but the reality is data center space and the ability to host digital infrastructure is an increasing demand. It's just not going to go away, despite the certainty in other areas. I think there are bigger legislative challenges and I think, you know, energy supply and cost of energy, etc. All of those are going to have contributing factors for sure. But in terms of people wanting to get into the sector and invest in it, I think I'm not really sure that it's going to potentially diminish. There will be demand. I mean, and some might say we're just at the start of it still, even with everything that we're seeing. If you look into Europe specifically, everything that's been going on in Europe, both in and out of the industry, how do you expect the market to flow next year? What do you think? Do you expect things to flow? The conversations, the topics, the trends, the deals? Yeah, it's interesting. I think, again, I think that it seems to me the focus is moving away from the traditional flaps or flat D, you know, Frankfurt, London, Amsterdam, Paris, and throw doubly into the mix as well. I think for a variety of reasons, you know, the scarcity or the difficulty in getting planning permission around. It is a bit difficult. Can I? Yes, it is still happening. I think it seems generally a lot more interesting with the tier two and tier three. I think you're also seeing the rise of certain countries that are, you know, maybe coming before. A lot of talk about Spain and Portugal right now, for instance. So, I think you're seeing different areas coming to the fore. That to me is to think of moving away from that. We are in Europe going to be facing increasing amounts of regulation from the European Commission. That is definitely happening. Some of the things I'm working on at the moment with regard to the corporate social responsibility directive, the reporting around that, the EU taxonomy, and now we're looking at updating the energy efficiency directive. So, all of those are going to have an impact and they are all not purely focusing on data centers, but they all include specific references to data centers. So, we're definitely going to have to look out for that. Probably more than 23, but it's coming into a 23. Yeah, but everything regulation-wise in Brussels, it's very exciting. It's going to change the way we look at things and some of the obligations that we'll have around reporting, absolutely. Speaking from a known operator side of things, when you speak to them, what's the feedback do you get? Are they scared? Are they worried? Are they angry? Are people welcoming these kind of regulations? I'm sure this is going to make life difficult to some of them. Well, it's going to make life onerous from reporting, but we all have fairly onerous reporting requirements. And in the financial sector, we have far more regulation than we do generically in the data center co-location sector. I think some people are looking at it with some concern, but I think those that are looking at it positively and those that are taking it seriously, I think we'll be fine. I mean, there are a couple of real benefits that come out of this. One is, I think that the reporting that's going to be required will be based on standardized metrics, standardized KPIs that are basically already published. So I think one of the great things that will come out of this, regardless of any kind of legislation or focus from the commission, is that we'll all be actually talking about the same things. We'll all be talking the same language rather than talking about, you know, measuring some of the things that we report in different ways and reporting in different ways. That will no longer be possible. We'll all be doing the same thing in the same way and reporting the same numbers, which frankly up to now hasn't really happened. So I think that's a positive and I think that will absolutely change the way that the industry works. Because at the moment, there's a little data, you know, how many data centers actually are there in Europe? How much power do we really consume? How do we actually really talk about energy efficiency sensibly? So I think it's going to change a lot in those areas. And again, just a standardized reporting will, I think, actually ultimately be very, very good for the industry. And it will demonstrate, I think, when we actually get to do it properly, that we are reducing overall energy consumption if you look at the amount of workload that is being managed and the amount of applications, etc., that are being supported. We are doing it with far less energy consumption comparatively. So in that sense, we are becoming more efficient. It's just not really being demonstrated properly at the moment. Yeah. And the good thing is that it's standardized across 27 countries. Brexit doesn't really come up that much anymore. It still has an impact. The UK seems to be copying, pasting as the EU goes along to also allow data transfers to happen more easily. But, I mean, because you're so involved with it, can you give us what's going on with Brexit? Well, so I think, you know, I think, as you say, in many respects, what the UK is doing, you know, not in every area, you know, all I can talk about is data centers. I can't really talk about anything else. But in the data center sense, you know, I think we are looking at Europe to see what they're doing, and we may well follow suit, you know, if what they do makes sense and it works. I'm sure we'll probably end up doing something similar. But I don't think the UK is unique either. I think other countries will do something very similar as well. The other thing to note, though, is that despite Brexit, we are still very much heavily involved in the European standards development area for data centers in particular. So any standards that are currently being developed or published on a European basis will actually be published as UK-British standards. So for instance, the 5600 series of standards is, it's a CEN, CENLEC initiative, which is also driven and funded by Europe, but actually the UK is fully engaged in that. And we are publishing all those standards that come out as four UK standards, so they'll become BS, EN, 5600, whatever. So we're still very engaged. So, you know, again, I think we won't be caught up in the legislation unless you're actually operating in Europe. If you are a UK operator operating in Europe, then you're going to be obviously caught up by the European regulations because you're based there. So from that perspective, yes, I mean, plenty of UK operators will be faced with European reporting requirements. And as soon as that happens, they're probably going to standardize to some extent across the board. Interesting. And then, Mike, so because you've kind of already mentioned what you're going to be working on next year, but what's the one project you're very excited about? They're going to be... Wow. I don't really... It's interesting. We do quite a bit of development work, so design work. So there's quite a lot of design work coming up. There's an awful lot of M&A activity. We get involved in sort of technical due diligence and that sort of thing. And that's quite interesting as well, you know, sort of looking at sites in very great detail to determine exactly what they are capable of and, you know, how well they've been designed or operated. That's always exciting. But I think probably the most interesting or the most influential or things that it probably can have the most impact on the industry is, again, some of this European regulation that's coming through. One of the things I'm involved with is essentially updating the European Code of Conduct to make sure it becomes more of an auditable framework. It was never written as an auditable framework, but it is now being not rewritten, but it's being modified in terms of language to allow it to be used as an auditable framework, which will underpin the CSRD reporting requirements. So that's quite interesting. And then again, we've got the ongoing Energy Efficiency Director, which will be developed really sort of through the first half of next year and possibly beyond. So that's going to be interesting. And there will be some fairly potentially onerous requirements in there, going right the way down to data centers of only 100 kilowatt in size or so. So it's really going to bring in a lot more people than just the big co-location operators and the big enterprise operators. So I think that's going to be interesting to see how that all pans on. Okay, very interesting. For what I'm hearing from you and even other people as well as the 2023 is going to be the year of regulation. The year of regulation. You all come to the table. Yeah, I think we're going to, you know, the regulations are going to come in around the middle of next year for reporting to start in around the middle of 2024 for the previous year. So the report requirements will be freely from the middle of next year onwards. But a lot of the detail hasn't been published yet. So, you know, it's very much a question of watch this space. Sure, it'll ramp up slowly. It won't really be a big bang where all these spaces report everything perfectly. Yeah, and I guess the new parliament or the new presidency is going to be handed over to another country come January as well. So they will want to make some noise and waves with that. They may well do. But at the same time, you know, I suspect they may have other problems than just data centers. Yeah, well, yeah. The focus may not be just on our sector. Yeah, no, no, no. I mean, we just talk about this is what causes big issues. As much as we all love data centers, the issues right now in Europe. And I'm sure they're going to be more worried about. But Mark Acton, thanks so much for your time. As always very insightful speaking to you. And I mean, we could chat for hours. There would always be topics to talk about in this industry. But Mark, thank you so much for joining me. And thank you to our viewers for tuning into JSA TV Live. Don't forget to check our social channels for more content. Until next time, happy networking. Thank you. Thank you very much. Thank you.