The Netherlands – land of data centers

A guest blog by Michiel Steltman, Director of the DHPA (Dutch Hosting Provider Association).

When you would ask an average EU citizen how the Internet works and where most websites and cloud services are hosted, most people will mention the U.S. as the main source of Internet technologies and services. And when you would ask an EU politician about the Internet, his or her first emerging thought would be a concern about taps, privacy, or cybercrime.

Indeed, the majority of public cloud services and millions of websites are hosted in the U.S. Few people however know that the Netherlands plays a key role in the worldwide online ecosystem. Amsterdam is the number four data center city in Europe, and has over the last two years shown the largest growth in shared hosting capacity. One in three carrier-neutral European data centers is located in the Amsterdam region. Providers of large sites and services invariably opt for the Netherlands as a candidate for locating their European activities.

Consequently, the Netherlands became the home base of hundreds of hosting and e-commerce companies amongst which some are the world’s largest and most innovative players, such as Leaseweb, Netherlands’ largest hosting provider. The Netherlands emerged as the primary location for the European data centers for world players such as Google and Microsoft, and the home base of some of the world’s largest websites. So what drives this success and growth, and what makes this industry so successful in a declining economy?

The pivot and origin of this success story is the presence of the Amsterdam Internet Exchange. The AMS-IX connects around 500 leading network suppliers and is, with over 2 Terabit per second, the world’s largest Internet exchange. Just as the Rotterdam harbor and the Amsterdam Schiphol airport, as main European hubs, spawned substantial economic activities, the presence of the AMS-IX resulted in a large ecosystem of data centers, hosting companies, and e-commerce activities. But other factors also fostered growth and opportunities. The Dutch law protected the privacy of online consumers even before the EU adopted these principles, and the Netherlands was one of the first countries to enforce net neutrality principles by law – which guarantees unfiltered transport of Internet data. Add to that an international business orientation, a well-educated English speaking workforce, ample availability of reliable energy at low prices, attractive investment schemes such as the Energy Investment Allowance (EIA), and the favorable tax climate – getting recognized as the leading strategic location for hosting infrastructure became a reality over the past 10 years.

The importance of solid online infrastructure and favorable conditions for e-commerce as a basis for economic growth are being recognized by the EU. European commissioner Mrs. Kroes recently mentioned the strong position of the Netherlands, and economic research facts that show that a 10% growth of investments in online infrastructure leads to a growth of 1% of the GDP.

In the seventies of last century, Dutch Prime Minister Joop den Uijl used the slogan “Nederland, transportland” which emphasized the role and importance of the Netherlands’ infrastructure as a hub for transport over water, roads, and by air. He could not have imagined that the Netherlands would once again play this leading role in Europe, but this time in the new era of bits, bytes, and online business!

 

The DHPA represents the interests of its members, the top 30 hosting providers in the Netherlands – one amongst which is Leaseweb. The DHPA promotes professional conduct and core values such as quality, transparency, and ethical behavior. Its activities include the promotion of the role and significance of the hosting industry, the cooperation with the educational sector to assure the long term availability of quality knowledge and skills, the continuous assurance of information security and privacy, the fight against cybercrime, and the facilitation of interaction between participants, market, government, interest groups, and other platforms.