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This research report on the data center market in Western Europe covers sizing and forecast, share, industry trends, growth drivers, and vendor analysis. The study includes insights on the segmentation by IT Infrastructure (servers, storage, and network) Electrical Infrastructure (uninterruptible power supply (UPS) systems, generators, rack power distribution units (PDU), transfer switches & switchgears, and other), Mechanical Infrastructure (cooling systems, racks, and Other mechanical infrastructure), Cooling Systems (CRAC & CRAH units, chiller units, cooling towers, dry coolers & condensers, and other cooling units), Cooling Technique (Air-based Cooling Technique and Liquid-based Cooling Technique), General Construction (building development, installation and commissioning services, building designs, physical security, infrastructure management (DCIM) & building management systems (BMS)), Tier Standards (Tier I and II, Tier III, and Tier IV), and Geography (Western Europe).
The implementation of the General Data Protection Regulations (GDPR) is expected to boost the data center market in Western Europe. As cloud-based services in Western Europe include hosting database, office software, financial and accounting, managing customer relationships and computer services, the demand for colocation, managed, and cloud-connectivity services will gain momentum. Several SMEs are looking to adopt cloud services such as PaaS and SaaS, and it is expected that more than 90% of SMEs in Western Europe will operate businesses through the cloud by 2024. The demand for hybrid infrastructure services is expected to grow at a CAGR of over 25% during the forecast period.
The increase in demand for data center services in Europe has led to the rise in merger and acquisition agreements. Also, data center construction is still growing at a significant rate, with large service providers investing in new construction and expansions in the European region. Besides, the data center colocation market in Europe is also witnessing increased interest from real estate and investment firms. The Europe data center market witnessed significant mergers and acquisition activities by US-based and APAC-based organizations. In 2019, QTS Realty Trust entered the market through the acquisition of TCN SIG Telehousing BV in the Netherlands. The market is also witnessing an increase in partnerships to develop and expand data center presence. For instance, Equinix partnered with GIC to invest over $1 billion for expansion activities in Europe in 2019.
- Equinix, Digital Realty, NTT (e-shelter), STT GDC (VIRTUS Data Center), CyrusOne, and Interxion are among the major colocation investors in Europe.
- Data centers construction in terms of investment, square feet area, and power (MW) will be high in the UK, the Netherlands, Ireland, Germany, and France.
- New hyperscale entrants in the market include NDC Data Centers (Germany), Echelon (Ireland), and Cloud HQ (Germany and the UK). These providers are also involved in the procurement of land in several multiple countries to facilitate built-to-suit development for hyperscale operators.
- The rack power density is expected to grow from an average of 6–8 kW in 2019 to about more than 13–15 kW in 2025.
- The adoption of metered and monitored rack PDUs is expected to make significant contributions until 2025.
The data center market in Western Europe by investment is expected to grow at a CAGR of over 1% during the period 2019–2025.
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Data Center Market in Western Europe: Segmentation
This research report includes detailed segmentation by IT infrastructure, electrical infrastructure, mechanical infrastructure, general construction, tier standards, and geography.
Insights by IT Infrastructure
The IT spending market is growing significantly YOY with Germany, Netherlands, the UK, France, and Ireland emerging as major markets. The growth is majorly driven by enterprises transforming from on-premise IT infrastructure to colocation and hyperscale and cloud operators. The server market witnessed strong growth in 2019. The procurement of ODM servers by hyperscale operators, cloud builders, and other enterprises has been a significant boost to the market. Several modern operators are involved in the adoption of server infrastructure that matches workload.
The demand for servers will continue to grow moderately as enterprises are likely to move to the cloud or colocation platforms during the forecast period. There will be an increase in demand for servers that support AI and ML application workloads. The market will also witness the adoption of AI servers as the market for high computing systems is increasing. The adoption of AI servers will increase during the forecast period in countries such as the UK, Germany, and the Netherland. There will be an increase in demand for servers with multicore processors, and the memory will grow as the average number of virtual machines per physical server continue to grow. Hyperscale operators are also expected to adopt advance storage mechanisms in new hyperscale facilities in the region.
Insights by Electrical Infrastructure
The power systems market is expected to grow due to increasing greenfield construction, particularly greater than 10 MW. The penetration of lithium-ion battery systems is steadily growing in the market due to their reduced prices. The market is expected to look for integrated battery monitoring solutions along with infrastructure procurement at a low cost. The generators market will continue to grow because of the continuous construction of large and mega facilities. Several facilities in Western Europe adopt generators with low redundancy are they are supplied power from dual grids, with grid availability of over 99%. Also, there are facilities powered by renewable energy, where the need for redundant generators is low. The adoption of Diesel Rotary Uninterruptible Power Supply (DRUPS) systems is moderate in the market as they combine both battery and flywheel UPS topology and diesel generators to provide backup power during outages. These systems are highly reliable, efficient, and require less maintenance.
The use of basic PDUs is comparatively low in Germany, France, and the UK. The deployment of basic rack PDU is common among on-premise data center developments in the region, where colocation service providers are shifting toward the use of intelligent rack PDUs. Most colocation facilities are built to support the rack power density of over 10 kW. The adoption of monitored and switched/managed PDUs in the market will be through the deployment of modular data centers by prominent vendors.
Insights by Mechanical Infrastructure
The favorable climatic conditions and the availability of renewable resources such as wind energy have helped data center operators to benefit from free cooling in the UK. Several facilities have adopted water-based cooling systems to cool their facilities. Also, the UK is the leading market for liquid-immersion cooling. Many data centers built in Germany are adopting free cooling to cool the facility. These facilities use redundant water and air-cooled system supported by free cooling with N+1 redundancy and CRAH units with N+1 configuration. In France, a majority of facilities are adopting free cooling solutions and several prefer water-based cooling using chillers. Facilities mostly prefer free cooling due to favorable climatic conditions. The facilities use CRAC units and chillers with free cooling in N+1 redundant configuration and cold aisle containment. The Netherlands market is witnessing significant growth in the adoption of free cooling systems. Enterprises are implementing redundant water and air-cooled systems supported by free cooling with N+1 redundancy and CRAH units with N+1 redundancy.
Insights by General Construction
The data center market in Western Europe is expected to witness greenfield construction largely. High investments from hyperscale providers will become a major driver for revenue generation for general contractors and sub-contractors in the market. The UK market witnessed over 20 data center projects that were opened or under construction in 2019. Among them, about ten facilities were opened in 2019, and remaining facilities are likely to open by June 2020. Several facilities are built with multi-level security. There is an increasing demand for IP video surveillance systems in the market. APL, TPF Ingénierie, and CAP INGELEC are some of the notable players providing construction services in France. In terms of physical security, there is a growing demand for IP video surveillance systems in the market. A majority of facilities developed in the Netherlands is expected to be greenfield development projects during the forecast period. Equinix, CyrusOne, Microsoft, Digital Realty, and Interxion carry out greenfield development in France.
Insights by Tier Standards
Data centers of Tier II standards are designed with minimal redundancy. There are a few facilities in Western Europe that are Tier II certified based on designing and construction. In these facilities, redundancy is recognized between UPS and PDU systems. A majority of under-developed projects across the globe fall under the Tier III category. This trend is likely to continue in Western Europe during the forecast period, with many operators expected to move to Tier IV standards due to the growth in rack power density and critical data center applications. Germany is witnessing the highest number of Tier III facilities, followed by the UK, France, and the Netherland. Most facilities in France are Tier III certified by the Uptime Institute. The use of OCP infrastructure is likely to increase among colocation providers in the country during the forecast period.
Insights by Geography
The adoption of cloud services is one of the major drivers for the UK data center market. Several government departments are migrating to the cloud environment. Over the past eight years, the government has saved over $100 million in data center consolidation. With the UK likely to move out of the European Union, service providers are expected to face stringent rules and regulations regarding the storage and processing of data outside the country.
The IT and telecommunication industries are predominant adopters of cloud computing, followed by the transportation sector in the country. In Germany, NDC Data centre, Interxion, Digital Realty, Equinix, Global Switch, CyrusOne, NTT (e-Shelter), Etix Everywhere, and Colt DCS are the major investors invested in multiple facilities. In Germany, Frankfurt, Munich, Offenbach, and Hamburg witnessed investment in 2019.
To support the data center market and as part of its digital transformation, the French Data Protection Authority (CNIL) and the implementation of the General Data Protection Regulation (GDPR) are likely to bring more investments in data centers in the country. In 2019, the French government undertook major tax initiatives, which resulted in lower energy prices. The initiatives taken by the government are likely to increase investments during the forecast period. The country is investing in carbon-free technology for power generation. In 2019, around 10 expansion projects were identified and expected to be operational by 2020. Interxion invested in the expansion and construction of over five facilities in France.
One of the major benefits that are attracting investments in the Netherlands is strong network connectivity to other European countries. The Netherlands market is continuously growing because of the availability of renewable energy sources to cool and power data centers. In 2019, Amsterdam had 15 facilities. Ireland has also attracted investments from colocation service providers such as T5 Data Centers, Echelon, Digital Realty, and EdgeConnex in 2019−2020. The support from government bodies and high-tech tax breakdowns are expected to boost the market in Ireland during the forecast period.
Key Vendor Analysis
The Western Europe data center market continues to grow for greenfield, brownfield, and modular data center construction. The market is witnessing increased growth in the number of facilities, with high adoption of efficient and modular infrastructure solutions. It has a strong presence of vendors across all categories – IT, electrical, and mechanical infrastructure.
The adoption of ODM-based infrastructure solutions is increasing in penetration among enterprise operators in Europe. The deployment of OCP-ready data centers by colocation operators has aided this growth. HPE, Dell Technologies, Atos, IBM, Cisco, and Lenovo have a strong presence in the region.
Several facilities in Europe are developed to operate at a PUE of less than 1.4. Increasing investments will prompt the operator to continue to adopt innovative infrastructure solutions to operate the sustainable data center environment. Few countries in the region suffer from frequent power fluctuations and power outages. This will enable operators to adopt efficient power backup solutions with UPS systems that offer over 95% efficiency. Schneider Electric, Legrand, Vertiv, ABB, and Socomec are major vendors operating in the market.
Prominent Data Center Critical (IT) Infrastructure Providers
- Dell Technologies
- Extreme Network
- Hewlett Packard Enterprise (HPE)
- Hitachi Vantara
- Inspur Group
- Pure Storage
- Quanta Cloud Technology (Quanta Computer)
- Super Micro Computer
- Wistron (Wiwynn)
Prominent Data Center Investors
- Aruba S.P.A
- AWS (Amazon Web Services)
- Bulk Infrastructure
- Colt Data Centre Services (CCS)
- Digital Realty
- Global Switch
- NDC Data Centers
- NTT Communications
- Scaleway Data Center
- STT GDC
Prominent Construction Services Providers
- Arup Group
- Cap Ingelec
- DPR Construction
- Etix Everywhere
- Flex Enclosure
- Jones Engineering Group
- Kirby Group Engineering
- LUPP Group
- Mace Group
- Mercury Engineering
- M+W Group
- Red Engineering
- SISK Group
- Structure Tone
Prominent Infrastructure Providers
- Airedale Air Conditioning
- Alfa Laval
- Bosch Security Systems (Robert Bosch)
- Delta Group
- Euro-Diesel (KINOLT)
- Hitech Power Protection
- KOHLER (SDMO)
- Nlyte Software
- Piller Power Systems
- Riello UPS
- MTU On Site Energy (Rolls-Royce Power Systems AG)
- Schneider Electric
- Trane (Ingersoll Rand)
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Key Market Insights Include
The report provides the following insights into the data center market in Western Europe during the forecast period 2020–2025.
- It offers comprehensive insights into current industry trends, trend forecasts, and growth drivers about the data center market in Western Europe.
- The report provides the latest analysis of share, growth drivers, challenges, and investment opportunities.
- It offers a complete overview of segments and the regional outlook of the data center market in Western Europe.
- The study offers a detailed overview of the vendor landscape, competitive analysis, and key market strategies to gain competitive advantage.
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