Customers are still demanding data centre capacity in central London, despite perceived problems with power and security issues in the city.

So said co-location provider Interxion. "They (customers) still want to be London, they could save 30 percent (by relocating their DC outside London), but they don't," Ali Moinuddin, director of marketing, told Techworld at the recent Data Centre World exhibition in London.

"Some have wanted to locate their data centre outside the M25, because of the perceived threat of terrorism etc," he added. "But we have two expansions in London (besides its existing facilities), as we are still seeing demand for data centres in central London."

SunGard Availability Services said last year that the rapid growth in data centres in the South East of England was being fuelled by the fact that business want their server farms nearby.

And it seems that rather than building their own data centre, many companies are now examining the co-location option. Moinuddin confirmed that Interxion are seeing more and more companies looking to outsource their data centre to hosting providers such as themselves.

"Five years ago we used to call people about outsourcing their data centre requirement," Moinuddin said. "But companies viewed placing IT outside their own infrastructure as a risk. But now the barriers have come down. It is now a commercial reason, namely Capex versus Opex, and it makes real commercial sense, up to a point."

According to Moinuddin, company needing 50 racks or below that, should really look to work with a third party provider. This is because a company's own data centre may not be able to meet a high power density requirement. Also, an outsourced data centre is able to offer broad connectivity. Moinuddin said that Interxion has 25 to 50 carrier partners per data centre that "compete to win your IP transit." And with multiple failover partners, there is often a reduction in bandwidth costs he said.

"With the current credit climate as it is, ours is a more compelling proposition, either as interim solution for 3 to 5 years, scaling up and down depending on requirements, or as a shorter-term proposition," he said. "Rather than spending $40 million (£28 million) to build new data centre, people are looking at alternatives and our pipeline still looks very strong."

"We now have enough space for our outlook through to 2010. We will look at increasing footprint as we go, as we are demand driven," he added.

Moinuddin also echoed previous comments by MD Greg McCulloch, who told Techworld back in November that power shortages in London were a myth. McCulloch's comments came after Interxion expanded its Brick Lane facility, close to the City of London, and said that the company had had little problem in supplying power to its facilities. Rather it had more problems with wayleaves rather than electricity supply.

Wayleaves essentially refers to digging up the road in order to lay cabling, be it power or data cables. "There is often a council delay until multiple people want to dig up a particular stretch of road," said Moinuddin. "You need planning permission to do it, and that is the biggest issue."

"We do not have any issue with power in London," he added. "We have plenty of power and space, indeed we are only using a third of it. We had planned for high density deployments, and we are very focused on planning to make sure we have power for now and in the future."