WESTERN EUROPE DATA CENTER MARKET OVERVIEW

Western Europe's data center market is valued at USD 35.06 billion in 2021 and is forecasted to reach USD 44.77 billion by 2027, growing at a CAGR of 4.16% during 2022-2027. The data center market in Western Europe witnessed an increase in investment in countries such as Italy, Spain, Portugal, Belgium, and Switzerland. Multiple projects are being carried out by colocation, cloud, telecommunication, and internet service providers.

The data center market in Western Europe is witnessing investment from both global and local data center service providers. The market will also witness the continuous adoption of cloud services among SMEs due to the heightened interest shown for the digital transformation of businesses through solutions such as IoT, big data, and artificial intelligence. The demand for smart devices, coupled with growing internet penetration, will also fuel the growth of colocation data centers and corresponding infrastructure in the Western European region. Data centers in Western Europe are being built to support OCP (open compute project) rack infrastructure solutions. This is aided by the growth of original design manufacturers solutions in the market.

KEY HIGHLIGHTS

• Data center investments in Western Europe grew by around 58% in 2021, compared to 2021, dominated by several hyperscale investments and development of data centers in emerging markets such as Spain, which are likely to witness over USD 3 billion in data center investments during 2022-2027.
• The top three data center constitute around 50% of data center investments in 2021. Colocation investments contribute to around 65% of the total investments made in 2021 across Western Europe
• In 2021, the Western Europe data center market witnessed over 100 new and expansion data center projects, with Germany leading the market accounting for over 22% of the investment followed by France (19%), the UK (14%), and Ireland (12%).
• In 2021, 25 data center operators and 17 industry associations signed the Carbon Neutral Data Center Pack, resulting in 75% of data center operations in Europe powered through renewable energy by 2025 and 100% by 2030.
• Increasingly data centers in Western Europe are being built to support OCP rack infrastructure solutions. This is aided by the growth of ODM solutions in the market.
• The adoption of liquid immersion cooling is likely to grow as organizations deploy artificial intelligence and machine learning workloads. Liquid immersion and direct-to-chip cooling are experiencing over 30% YOY market growth and enable data center operations at a Power Usage Effectiveness of less than 1.1.
• The district heating concept is gaining increased traction in Western European countries with strong support from government bodies. For instance, Berlin aims to reduce its carbon footprint through district heating with its new transition law, which mandates that district heating be completely produced from renewable energy sources by 2050.

WESTERN EUROPE DATA CENTER MARKET SEGMENTS

The Western Europe data center market has the following segmentation:

• Infrastructure
• IT Infrastructure
• Electrical Infrastructure
• Mechanical Infrastructure
• Cooling Systems
• Cooling Technique
• General Construction
• Tier Standard
• Facility Type
• Geography

SEGMENTATION ANALYSIS

• IT Infrastructure: Server procurement will bring in USD 90 billion cumulative revenue opportunity for vendors operating in Western Europe during 2022-2027. In servers, AI-based computing infrastructure is gaining increased traction in the market. NVMe flash storage dominates with its growth rate and 25/100 GbE switch ports among network infrastructures. Several innovations are also available within servers from different operators. For instance, Facebook in May 2020 announced the next generation Sonora Pass server specification at the Open Compute Project (OCP). Servers with AI and ML built into them are getting developed and offer features such as analytics for data, ease in developing AI-enabled apps, and flexible data deployment to grow the cloud operations in the market significantly.
• UPS Systems: $8+ billion will be spent on procuring UPS Systems in data centers during 2022-2027. Due to the failure of UPS and to overcome the challenges of VRLA batteries, vendors introduced lithium-ion UPS solutions and Nickel Zinc and Prussian Blue Sodium-ion batteries, most data centers operating in European regions are adopting N+N redundant infrastructure, while the majority of data centers are designing facilities with space for installing up to 2N+2 redundant UPS systems to cope with diverse feed designs of the facility, thereby, the growth of the lithium-ion UPS batteries in the data center market.
• Core & Shell Development: Over $12 billion will be spent on building core & shell data center property in Western Europe during 2022-2027. The cost of data center development across Western Europe is $80−180 per square foot. Building development is carried out by major construction contractors in coordination with design and infrastructure providers and data center operators. The involvement of sub-contractors is high as they have strong expertise in building structures in a particular location. The Western Europe Data Center market also witnessed the entry of several new entrants, including Global Technical Realty, Stratus DC Management, that are expected to add to the market growth in coming years.

VENDOR ANALYSIS

• Hewlett Packard Enterprise is a major vendor in the server market. Server demand has grown over the last year through the higher infrastructure deployment for big data analytics workloads. The need for converged and hyper-converged solutions also experienced substantial growth in the market.
• Innovations in system performance for all workloads and delivery of high-density systems with high-capacity SSDs play a vital role in gaining market share in the storage market. Dell Technologies is the leading vendor in the market.
• Cisco Systems dominated the market aided by the strong demand for its Application Centric Infrastructure (ACI) product portfolio. Cisco’s data center switching revenue increased through higher sales of the Cisco Nexus series product. Other major vendors operating include Arista Networks, Broadcom in the data center market.
• By the next few years, data center operators will consider the adoption of lithium-ion batteries, fuel cell technology, and intelligent PDUs to improve the efficiency of their facilities. In terms of fuel cell deployments, Bloom Energy is leading the market, and in terms of UPS and rack PDU infrastructure in general, ABB, Eaton, Legrand, Schneider Electric, and Vertiv Group are the leading market players. In terms of generators, Cummins and Caterpillar have a strong presence in the market.

GEOGRAPHICAL ANALYSIS

• UK: The major locations for data centers construction in the UK include London, Manchester, and Slough. Among these major locations in London, which witnessed a data center area addition of around 400 thousand square feet to fuel the data center market growth.
• Germany: Over 1,000 MW of data center capacity will add during 2022-2027 in the German market. The data center market in Germany witnessed a major number of data center projects among all countries of the region, including investments from some of the global data center operators such as CyrusOne, Digital Realty, Equinix, Vantage Data Centers, and NTT Global Data Centers. The market witnessed investments also from cloud service providers.
• France: The market will witness data center investments worth over $7 billion during 2022-2027. The major locations for data center developments in the country include Paris, Marseille, Strasbourg, Bordeaux, and Mougins, out of which Paris witnessed a majority of data center space addition. In November 2021, the French Government announced around $2 billion to support research and development projects for cloud computing in the country. In October 2021, Interxion, a subsidiary of Digital Realty announced its plans of developing a data center campus in Paris with a power capacity of around 130 MW.
• Ireland: Ireland has become a very active market for both colocation service providers and hyperscale operators in 2020 & 2021. Major investors include Microsoft, Google, Amazon Web Services (AWS), CyrusOne, Dataplex, Digital Realty, Echelon Data Centres, EdgeConneX, Energia Group (Huntstown Power Company), K2 Data Centres, Nautilus Data Technologies, Vantage Data Centers, T5 Data Centers, and JCD Group. However, in January 2022, state-owned electric power transmission operator of Ireland EirGrid announced that it will not connect new data centers in Dublin, potentially till 2028.

The Western Europe data center market research report includes in-depth coverage of the industry analysis with revenue and forecast insights for the following segments:

Market Segmentation by Infrastructure

• IT Infrastructure
• Electrical Infrastructure
• Mechanical Infrastructure
• General Construction

Market Segmentation by IT infrastructure

• Server
• Storage
• Network

Market Segmentation by Electrical Infrastructure

• UPS Systems
• Generators
• Transfer Switches & Switchgear
• Power Distribution Units
• Other Electrical Infrastructure

Market Segmentation by Mechanical Infrastructure

• Cooling Systems
• Racks
• Other Mechanical Infrastructure

Market Segmentation by Cooling Systems

• CRAC & CRAH Units
• Chiller Units
• Cooling Towers, Condensers, and Dry Coolers
• Economizers & Evaporative Coolers
• Other Cooling Units

Market Segmentation by Cooling Technique

• Air-Based Cooling Technique
• Liquid-Based Cooling Technique

Market Segmentation by General Construction

• Core & Shell Development
• Installation & Commissioning Services
• Engineering & Building Design
• Physical Security
• Fire Detection & Suppression
• DCIM/BMS

Market Segmentation by Facility Type

• Hyperscale Data Centers
• Colocation Data Centers
• Enterprise Data Centers

Market Segmentation by Tier Standard

• Tier I & II
• Tier III
• Tier IV

Market Segmentation by Geography

• Ireland
• Germany
• UK
• Netherlands
• France
• Switzerland
• Italy
• Spain
• Belgium
• Portugal
• Luxembourg
• Other Western European Countries