Industry Spotlight: maincubes CEO Oliver Menzel

The European data center market has had an interesting few years, buffeted by geopolitical changes in the energy markets and driven by ever-expanding demand from new technologies.  With us today to talk about it all isn the CEO of maincubes, Oliver Menzel.  From his perch in Frankfurt, Germany, home to one of the largest data center concentrations in the world, he has a unique viewpoint on the market, the drivers of demand, and the future direction of European data centers. 

TR: What are the origins of maincubes?  What led to your role in co-founding the company?

OM: The company was founded in 2012 by my former company, wusys GmbH (an IT Service Provider), and Art-Invest Real Estate, a commercial real estate developer.

I assumed control of wusys, and under my guidance worked hard to obtain renowned customers transforming it into a full-service provider of complex outsourcing and IT solutions. This eventually led to establishing maincubes in 2012, where I am CEO and co-founder.  I took this from a startup into what it is today – an expanding European data center operator and service provider that works with global customers.         

TR: What does maincubes business look like today?  What infrastructure do you have in place and what types of customers are your sweet spot?

OM: maincubes currently has two data centers in operation: FRA01 in Germany and AMS01 in the Netherlands. Three new developments in Germany (Frankfurt and Berlin) have been announced, are under construction (FRA02, FRA03 and BER01), and will go live in the next 24 months. And there is more to come…

maincubes is supported by its two investors (DTCP and Art-Invest) and is now gearing up for its next round of growth.  Additionally, it has recently secured funding for >€1Bn to support its future expansion plans. 

In terms of staffing, the company has grown significantly over the past two years (more than doubled the number of employees) and is continuously looking for new candidates.

maincubes has a primary focus on three customer segments: government, international cloud and service providers and enterprises.     

The company is open to customers of all kinds and, with our technology in the data centers, we can adapt to various customer requirements at any time.

TR: You recently secured a new €1Bn finance facility.  Where do you plan to invest your resources over the next few years? 

OM: The new debt facility will further accelerate our sustainable growth strategy to become a leading European data center operator. The €1.035 billion is made up of €685 million committed facilities with a further €350 million uncommitted accordion made up of a consortium of eight banks and one institutional fund.

maincubes is currently in the process of planning and building new data center facilities, with an emphasis on scaling operations in Frankfurt and establishing a presence in the rapidly growing Berlin market.  The company is also looking into other national and international markets.

Backed by DTCP and Art-Invest Real Estate, maincubes is executing the next phase of its well-defined growth strategy – with continuous support from our investors to realize larger-scale projects.

TR: Are there other new markets or geographies in which you see potential in the future?

OM: maincubes is focused on its long-term growth strategy in Central and Western Europe. But we always have our customers’ needs in mind and hence are open to opportunities that support our existing customers in new European geographies.

TR: It has been 10 years since the founding of maincubes.  Has the data center marketplace evolved in the ways you anticipated? 

OM: Given the increasing digitization in all businesses public and private, we foresaw a large growth in the data center industry when we founded the company. But obviously, we could not have imagined that it would be exponential. Currently, there are some challenges (e.g., economy, supply chain, availability, land and power, local regulations), but growth is not slowing down.  We do foresee pressure on future supply based on demand.  Just consider the substantial demand for data center resources being generated by the rapid rise of AI.

One development nobody could have expected, as a result of the consolidation in global markets, is that the data center market in Europe nowadays is dominated by American and Asian companies. Truly European data center owners and operators have become rare. The evolution of the data center industry and our modus operandi has created a unique opportunity where we feel very comfortable. We believe that there is sufficient growth within our specific segments and markets for the next few years so we will be able to grow as an independent and German data center owner and operator

TR: How has volatility in the energy markets over the past year affected maincubes and the data center sector as a whole in your markets?

OM: The energy crisis has indeed affected Europe. Of course, this has had an impact on data centers, but maincubes procurement strategy for buying power has brought stability for our customers despite the enormous volatility. Germany was hit hard by the 2022/2023 energy crisis and the situation will remain difficult, but maincubes has proactively prepared itself and implemented strategic measures, positioning itself strongly to effectively tackle the challenges ahead. maincubes has kept its flexibility in its energy purchasing. With that, the company is able to buy upfront for the whole year. This approach enables us to secure a good price for our customers.

TR: What trends do you see dominating the data center infrastructure marketplace for the rest of 2023 and into 2024?  What challenges and opportunities lie ahead?

OM: Here are some of my thoughts on several trends:

• LAND AND POWER – Looking ahead, we see strong demand to persist in the future. However, the pressure on the power supply and available land remains high. Despite these challenges, we have been able to navigate other challenges like obtaining data center permits, which for others seems to be challenging – especially with the added requirements from (local) European authorities including sustainability. We believe that our ownership, strategy, and data center design will enable us to continue to grow our data center footprint.

• CARBON NEUTRALITY – Protecting the climate will necessitate a significant and long-term reduction in energy consumption –  a challenge for all.  As a rather energy-intensive sector of the economy, data centers are all working to meet this goal with care and responsibility.
  
  Developing and building resource-conserving data centers that meet today’s ESG requirements of the coming European Energy Efficiency Act (EEEA). This is one of the biggest challenges the data center industry will face in the next few years. However, maincubes sees this as a great opportunity to develop new, more climate-friendly technologies. For example, we have already incorporated plans to utilize waste heat for environmentally friendly heating of neighboring buildings in our data center developments BER01 and FRA02.  The whole industry and maincubes as a data center operator, can and have to make an important contribution to protecting our climate. maincubes is setting a good example here and is already planning its data centers in accordance with sustainability standards wherever possible, which in some cases exceeds the requirements of the coming EEEA.
  
  As an industry, it is our collective responsibility to address this issue comprehensively, taking into account not only the future security, efficiency and sustainability of our data centers, but also the broader social and environmental impacts right from the outset.

• CONSOLIDATION
  We believe that the market will continue to consolidate in the coming years whereas smaller providers will be acquired by larger and mostly international players.

• GEOPOLITICS
  Another topic we see playing a more important role are tense geopolitical conditions.  These are important to consider when it comes to data sovereignty and data privacy.  As a truly German and European data center company, we have a different and favorable position, approach and solution compared to other countries. For a number of market segments, this is becoming increasingly important. Offering our customers a safe haven for their data with the highest compliance and meeting the highest of regulations and security standards remains our top priority.

• AI
  Last but not least, the rise of AI technologies will have a huge impact on the whole data center industry presenting a significant challenge, particularly in the realm of energy consumption (and electric grids everywhere are struggling to cope with the demand of electric vehicles and data centers already). Now is the time for data center operators, infrastructure experts and policymakers at communal, national, and international levels to collaborate on sustainable solutions before this challenge escalates into a major problem. Apart from the energy and sustainability concerns, AI will drive the need for high-performance computing and specialized data center infrastructure. As a data center operator, we must proactively prepare for this shift.
  
  However, AI also holds promise in optimizing overall data center operations, enhancing energy efficiency, and strengthening data security through innovative tools and applications. For instance, AI could aid in predicting workload demands and automating the distribution of physical and virtual resources.

TR: Thank you for talking with Telecom Ramblings!

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Categories: Datacenter · Industry Spotlight