Building the regional Edge

November 16, 2023

A conversation with Harro Beusker, CEO of new European Edge company nLighten

Harro Beusker

Data centers used to be a niche market, something ‘new,’” Harro Beusker recalled.

“But today when you look at a smartphone, the back of the smartphone is a data center. Everything you do on this smartphone is processed in the data center. You might be in church, you might be in school, but this is done in a data center.”

Now that the market has matured, “the question we have to look at in Europe is why is all the processing concentrated in four or five cities? That’s illogical. Let’s go closer to the customer. Let’s develop that asset class.”

Beusker, co-founder of nLighten, is one of a number of data center executives hoping to build the ‘regional Edge.’ These are not the closet-sized Edge that may one day blanket cities, nor are they the enormous mega-structures pitched by the hyperscalers. Instead, they live in-between, as small data centers in traditionally underserved cities.

“They are spread over the country, and closer to the customer,” Beusker said. In February 2023, nLighten came out of stealth with a portfolio of 10 Exa Infrastructure data centers in Germany from backer I Squared Capital.

In the eight months since then, nLighten has almost tripled its portfolio. June saw the company acquire Euclyde Data Centers in France, taking over their six facilities in Sophia Antipolis, Lyon, Strasbourg, Besaçon, and Paris.

This acquisition was swiftly followed by another in the United Kingdom: Proximity became nLighten-ed, and with it, the new regional Edge player brought its total portfolio up to 26 facilities across three countries.

“The main motivation was ‘business,’” explained Beusker. “We want to roll out over the whole of Europe, that’s the goal.

“We’ve looked for companies where there is chemistry, and also deploy the type of data centers that match our goal. But then we also, of course, looked at sustainability to make sure that there was at least a basis to work with.”

A big part of Beusker’s argument for the regional Edge is his claim that it is simpler to reconfigure smaller data centers to make them sustainable than it is to change an entire major campus.

Germany notably passed an Energy Efficiency Bill in September 2023. The bill has placed strict requirements on data centers – though admittedly laxer than those originally proposed – including that data centers over 200kW should reuse 20 percent of their heat by 2028, and all data centers opening on or after July 2023 should reach a PUE of 1.2.

Fortunately for nLighten, this was already more or less in line with its game plan, though of course still a challenging prospect.

The PUE challenge for colocation data centers is notable – and ultimately nLighten’s regional Edge facilities are small, localized, colocation data centers – as these facilities cannot always guarantee full occupancy or choose the hardware tenants choose to put in the data center.

As for waste heat, “we have a 3MW data center in Eschborn that is not too far from a new government building – the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) – which is a large office building with around 1,500 people working there, and a swimming pool that was looking for a source of heating,”

Beusker said. “We came together to find a solution, and at this moment we are building a 1.5km long piping system to bring the heat over to the swimming pool at the government building.”

While this project is very much in process, Beusker was keen to point out that it was not a simple task. “This is not easy, because we need to build these pipes and the government needs to be able to receive this and make it into a heating system, but we got the capacities to match – our 3MW facility is roughly the same or slightly more than what we need to bring to the GIZ building.”

Besides the practicality of developing the system, there is also the simple fact that this costs money to build. Regardless, this is the ultimate goal and will eventually be rolled out in the rest of Germany and, eventually, in nLighten’s other markets. “It’s not easy. It will take time, but it is real, and it will happen.”

nLighten has also, at the Eschborn facility, replaced the diesel generators with new models that can be run on multiple gas sources. For now, the company is using biogas, though if hydrogen is ever a plausible option in the industry those generators can be reconfigured.

Biogas is produced by raw materials such as agricultural waste, manure, sewage, plant material, or food waste as a result of anaerobic digestion with anaerobic organisms or methanogens.

The resulting gas is mostly carbon dioxide and methane, and may have small amounts of hydrogen sulfide, the latter two of which can be combusted or oxidized for energy.

“For this season, we are using those generators as normal. But, starting next season, we will have a secondary use for them and this is to support the power companies in Germany. When the grid is at a deficit in solar and wind power, we can supplement it with our gas-fueled generators.

“We have a 3MW data center in Eschborn that is not too far from a new government building with around 1,500 people working there, and a swimming pool that was looking for a source of heating. We came together to find a solution.”

Harro Beusker nLighten

“The advantage of that is twofold. The grid can use renewable energy for longer periods of time instead of turning to natural gas or oil, but also the electricity company does not need to up the capacity of their oil plants. They can manage the peaks of demand by using local energy sources like ours, and we run that on renewable sources.”

Ultimately, solutions like this are easier to achieve on a smaller scale. The regional Edge data centers can support the local regional grid, without demanding the power needs of entire cities.

But beyond all of this, we need to answer the question of who the regional Edge is really for.

“Our primary focus, customer-wise, is the enterprise market. The ‘digital transformation of the world.’ If you are in Stuttgart and want to undergo that transformation, you really need to go to a commercial data center. But now, rather than going to Frankfurt for that, you can access the same technology from the nLighten network in Stuttgart,” Beusker said.

nLighten is building up a collection of channel partners to ensure that customers get the same experience at a local level that they would expect in a major data center. Beusker also said that the company is pursuing cloud and managed service providers as a secondary customer group: “We’d love to have those companies come to us and use our data centers as a basis for their services.”

But, according to Beusker, the drive for the latter customer base to reside at the regional Edge is latency, a motivation he predicts will increase as we see more latency-reliant industries in use day-to-day. For example, in Germany, nLighten has connectivity to the main hubs of Deutsche Telekom which services more than 60 percent of the country’s population and has a latency of between two and six milliseconds.

Beusker points to the gaming industry – and his customer base of gaming platform providers – as one sector that particularly requires low latency. The experience needs to be instantaneous and reflected for all the players who may be in different locations. This is well known within the gaming industry, with providers often having multiple Points of Presence to ensure a good experience regardless of location.

“Gaming platforms need that low latency and are very interesting customers, but there are many more. For example, manufacturing with Industry 4.0, that’s definitely a market that needs lower latency,” said Beusker. Then, of course, there’s the hype market of today: Artificial intelligence. “AI is not yet leading the low latency push for interaction with the customer. That’s not there yet, but we will get there. The ultimate killer application is automated driving and for that, you do need the low latency, but also data gathering for AI “There are benefits to doing that locally, so that you don’t need to put all this massive amount of data over the network to one central location. Instead, you can do the data gathering and learning in local apps and then send the results to the central location.”

Much of the automated driving workloads will happen on the car themselves, and the Edge’s role in self- driving cars is not certain.

It is also important to note that applications like AI often require an extremely high density. Beusker said that the majority of nLighten’s customers are currently looking at densities between 5kW and 10kW, but the company can currently provide for up to 20kW.

Ultimately, a lot of these industries are still in their infancy or adolescence, but if and when they come to full maturity and fruition, nLighten hopes to be well-placed to serve them.

The company hopes to expand across Europe in the years to come, eventually operating 70 to 90 data centers.

“Our first focus is to make more steps in Western Southern Europe. That’s until, say, 2024. From there we will scale up and explore Eastern Europe.”

As it does so, it will push up against other rivals hoping to build out the regional Edge. “A lot is the same, between us and our competitors like AtlasEdge and others. A lot of the things we do are similar, but that’s a good thing.

“We are creating this new asset class, and there is more than enough room for three or more parties.”.

Read the full article in the DCD Edge in Review Supplement.

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