If you watch a movie on Netflix, send a WhatsApp, or do your shopping online, you’re using a data centre, says Garry Connolly, Digital Infrastructure Ireland director. “The cloud is a data centre,” he says. “It’s not something magical, it’s physical.”
He describes data centres at different times as factories, warehouses, digital engines, in his efforts to drive home their role in people’s lives, society and business. Essentially, he says, they create and export software that we all use, but through telecoms cables rather than container trucks.
He argues that they underpin the Republic’s information, communications and telecoms (ICT) industry, which employs 160,000 people and is the country’s biggest services exporter, worth about €240 billion a year.
“So, the people designing the software could be sitting in Burlington Road, or out where Microsoft now are in Leopardstown, and the warehouse is out in Grange Castle, but really it’s all part of one and the same thing,” he says.
Connolly has been banging the data centre drum for the past decade, not just here but also abroad, where the organisation he founded in 2014, Host in Ireland, has been selling the Republic as a location for the business. This week it merged with Digital Infrastructure Ireland to create a unified group and strengthen the industry’s lobbying hand.
The new group, also called Digital Infrastructure Ireland, forms as Government works on a new policy for the business that will bid to balance its high energy demands with its economic benefits. At the same time energy industry overseer, the Commission for the Regulation of Utilities (CRU), is seeking submissions on proposed new electricity grid connections rules for data centres.
To tackle challenges posed by an industry that will consume up to 30 per cent of all electricity used here by 2032, the regulator will demand that these facilities have their own backup generation on site, or nearby. In addition, they should supply power to the electricity market, that is, homes and businesses. Something Connolly says many are already doing.
Data centres’ appetite for electricity cast them as pantomime villains during the recent energy crisis. The outcry that followed the airing of concerns about their consumption raised by national grid operator EirGrid, with the CRU, prompted the Government to revisit its policy of encouraging their location here, and a review by the regulator of connection rules that produced the proposals published last week.
For Connolly, their demonisation began much earlier, this month 10 years ago, when Apple announced plans to build an €850 million data centre in Athenry, Co Galway. The iPhone maker axed the proposal three years later following a planning row and court battle. The controversy severely dented the Republic’s reputation as the primary location for these facilities in Europe, the Middle East and Africa.
Up to that point, the Republic had “first refusal” on any significant project, according to Connolly. “Now in 2025, not only do we not have first refusal, we’re not on the list,” he says. The resulting lost investment could be €15 billion to €20 billion, figures that the industry lobbyist says “is just capital”, only taking account of the centres themselves.
“We’ve missed out on the monetisation of the data that would have been in the centres, that feed our largest export. So, when you demonise the centres, you’re effectively demonising the big tax takes, the exports, the balance of trade.”
Current attitudes make us an outlier among trading partners, and rivals for foreign investment. Connolly says that in recent weeks countries have pledged billions to support digital infrastructure. The US has committed $500 billion, France €200 billion, the UK more than €60 billion, while other European countries are committed to rolling out similarly lucrative welcome mats. Putting those sums in context, the industry has invested about €15 billion here over two decades.
[ The Irish Times view on data centres: trying to solve the energy puzzleOpens in new window ]
For him, the irony of this is that Irish people and companies, including members of his organisation, will design, build and operate many centres in Europe. That is down to skills they built up over decades of working with the industry, and what he calls our pedigree in ICT.
Irish workers leave airports on Monday mornings to fly to “Frankfurt, Paris, Amsterdam, London” where they are building data centres. “We’re exporting all those skills,” he says. “There’s nothing happening here.”
He noticed a newspaper headline about “fuming data centres” following the CRU’s publication of its proposals last week. “Nobody is fuming,” he says. “Because there’s such opportunity everywhere else. The irony of it is all those companies are doing multiples of what they could do here. If you look at the [data centre] operators, none of them are fuming, because they are now working in Paris, or they’re working in Milan. Everywhere else has caught up.”
Irish expertise in data centre development slots into one of his key arguments, that these facilities are a natural extension of economic development that began with our entry to what is now the EU in 1973. A quarter of a century later, the State was one of the world’s biggest software exporters. Data is just the latest wave. When it began replacing the CDs from which people once downloaded software 20 years ago, the Republic, with its existing industry, was a natural place to locate.
But there is a counterargument. ICT is not our only export; others are just as lucrative. Pharmaceutical manufacturers employ large numbers and as the industry mainly responsible for the State’s recent corporate tax windfalls, it is hard to argue that it does not deliver value.
That and all other businesses need electricity, which is expensive in this country, while supplies were under severe pressure up to recently. So, promoting an activity that soaks up so much of it risks endangering others, not to mention the burden that pricey energy imposes on families?
That presupposes that there is a “finite bag” of electricity, which Connolly maintains should not be the case. He argues that the Republic needs to accelerate the rate at which it intends exploiting offshore wind for electricity, something about which it has been talking since the start of the century.
Data centres can aid this through corporate power purchase agreements, deals where companies pledge to buy all a supplier’s electricity, giving developers certainty that allows them to raise the cash needed for individual projects. He takes this a step further, rolling out the well-worn cliche that the Republic should be to renewable energy what “Saudi Arabia is to oil”.
[ Eamon Ryan hails Ireland’s role as ‘world leader’ on data centresOpens in new window ]
“Think about that for a second,” he says. “You’re exporting the wholesale raw material, if you get there. But you have an industry that can use that raw material, turn it into a retail product: data, and export it, it’s a much better return on investment for everybody.”
His industry’s “disproportionate” appetites are a consequence of the fact that it is producing something for much bigger markets than this country. This also applies to “life sciences, pharmaceuticals, even Guinness for goodness sake”, as all those industries are geared at export. “Or the amount of square footage down the international Financial Services Centre as a percentage of five million people, why does Ireland need all those financial services? It’s not for Ireland, it’s for Europe.”
Connolly began working life as “the world’s worst Cobol programmer”. Whatever his abilities, he found a niche through his training in the computer language. He realised that programmers often found themselves at odds with their customers when both were trying to solve the same problem. “One was talking in zeros and ones, the other was talking in shillings and pence,” he recalls.
He knew enough about Cobol to understand what it could do, and enough about businesses to understand what they wanted, so he became a sales engineer, starting with BA Systems. Jobs with ICL Fujitsu and British Telecom followed. In 1994, he cofounded what subsequently became the country’s leading voice and data systems business, Bridgecom. Denis O’Brien’s Esat Telecom bought it four years later. Connolly then cofounded HR software developer, Engage Technologies, which Northgate HR bought in 2006.
His career has bridged technology and foreign direct investment. He also chairs GconnTech, a business that aids overseas investors with the nuts and bolts of establishing a base here, including finding legal and professional services, offices, IT and even staff induction handbooks.
The Host in Ireland-Digital Infrastructure Ireland merger reflects not just the industry’s need to unify as it reaches a critical point with Government and regulators, but the fact that it embraces everything from data itself to services, construction and power supply.
Host in Ireland’s original members drew heavily from businesses that serviced the industry, while Digital Infrastructure Ireland’s membership was more focused on the operators. The merged organisation’s “partners” include global data centre giant Equinix, power manager Schneider Electric, construction group Kirby, data center operators T5, and lawyers Eversheds Sutherland, to name but a few.
The biggest players in the global data business are Microsoft, Amazon and Google. They do not build the centres, but rent space from those that do. When you download or use an app, the chances are that one of them is hosting it. Those groups all have well-established businesses here and have their own representation through employers lobby group Ibec.
Connolly feels there is a change of mood since the refreshed Coalition took office last month. That is partly based on the CRU’s document, which refers to the need for a State-led solution to the data centre question. The other is Taoiseach Micháel Martin’s pledge to create a Climate Investment Clearing House that will focus on energy.
“I would be cautiously optimistic that after 10 years that we can have a collective discussion, with industry, the State, with regulators, to look at the data and the centres, the economic value and the future potential for driving offshore wind development,” he says.
He wants Martin to adopt the approach taken in the early 1990s to financial services. That brought the business together with the government, its agencies and planners, and resulted in Dublin becoming a centre for the sector.
Connolly argues that the State has always played a role in luring overseas cash, beginning with the IDA building advance factories, then linking their multinational tenants with third-level education. That involvement brings certainty, something all investors want before committing to any location, he notes.
Part of that uncertainty is – no surprise – the planning system. There is no indication yet that the Planning Act, 2024, passed in October, will deal with this, as it is some way from being enacted and tested.
“During the previous administration, we worked out that there could be between five and seven different agencies involved in a data centre,” he says. “You get over one hurdle, you have to deal with another, you get over this hurdle, you have to go to the EPA [Environmental Protection Agency], you go to EPA, you can’t get a gas connection.
“That makes it difficult when you have other advanced jurisdictions, including the Netherlands, which has a department of digital infrastructure, or the UK, who are going to treat data as critical infrastructure.”
Connolly argues that data is “critical” and if the State wants to keep the industry and its benefits here, it needs to act. But, he says, our advantage is that in an increasingly uncertain world “this is one of the few things that is within our control”.
CV
Name: Garry Connolly
Job: Director, Digital Infrastructure Ireland
Why is he in the news? Host in Ireland and Digital Infrastructure Ireland have merged to form a single lobby for the data centre industry to convince Government and public of its value
Family: Married and living in Co Wicklow
Hobbies: Sport, he supports Shamrock Rovers and Arsenal
Something you might expect: He began his career in sales
Something that might surprise: He owns a section of the original 19th-century transatlantic cable that connected North America with Valentia Island in Co Kerry
