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Europe Data Center Colocation Market Size, Share, & Trends Analysis Report by Infrastructure (Electrical Infrastructure, Mechanical Infrastructure, and General Construction); Electrical Infrastructure (UPS System, Generators, Transfer Switches & Switchgears, PDUs, and Other Electrical Infrastructure); Mechanical Infrastructure (Cooling Systems – (CRAC & CRAH Units, Chiller Units, Cooling Towers, Condensers and Dry Coolers, Economizers & Evaporative Coolers, and Other Units), Racks, Other Mechanical Infrastructure , Cooling Technique (Air-Based Cooling Technique and Liquid-Based Cooling Technique)); General Construction (Core & Shell Development, Installation & Commissioning Services, Engineering & Building Design, Physical Security, and DCIM); Service Type (Retail Colocation and Wholesale Colocation); Tier Standard (Tier I & II, Tier III, and Tier IV); and Geography (Western Europe, Nordic Region, and Central & Eastern Europe); Industry Analysis Report, Regional Outlook, Growth Potential, Price Trends, Competitive Market Share & Forecast, 2021–2026
|MARKET SIZE (INVESTMENT)||USD 8.21 BILLION (2026)|
|MARKET SIZE (AREA)||5.76 MILLION SQ.FT (2026)|
|CAGR (INVESTMENT)||5.61% (2021-2026)|
|Market Segments||Infrastructure (Electrical Infrastructure, Mechanical Infrastructure, and General Construction); Electrical Infrastructure (UPS System, Generators, Transfer Switches & Switchgears, PDUs, and Other Electrical Infrastructure); Mechanical Infrastructure (Cooling Systems – (CRAC & CRAH Units, Chiller Units, Cooling Towers, Condensers and Dry Coolers, Economizers & Evaporative Coolers, and Other Units), Racks, Other Mechanical Infrastructure , Cooling Technique (Air-Based Cooling Technique and Liquid-Based Cooling Technique)); General Construction (Core & Shell Development, Installation & Commissioning Services, Engineering & Building Design, Physical Security, and DCIM); Service Type (Retail Colocation and Wholesale Colocation); Tier Standard (Tier I & II, Tier III, and Tier IV);|
|Countries Covered||UK, Germany, Netherlands, France, Ireland, Switzerland, Italy, Spain, Other Western European Countries, Denmark, Sweden, Norway, Finland & Iceland, Russia & Czech Republic, Poland & Austria, Other Central & Eastern European Countries|
Europe data center colocation market size to reach USD 8.21 billion by 2026, growing at a CAGR of 5.61% during the forecast period. The data center colocation market in Europe is an attractive market, with data centers offering a higher Return on Investment (ROI) than other commercial and industrial properties. In 2020, the outbreak of the COVID-19 pandemic created a huge demand for cloud-based services, with the majority of the workforce shifting to remote working in Europe. The need for colocation services led to the strong utilization of existing data center space. The continuous adoption of cloud services among SMEs, with the rising interest in the digital transformation of businesses by adopting IoT, big data, and artificial intelligence, will be significant drivers for the growth of the colocation market. Governments across the region are reducing electricity prices and electricity taxes to attract data center operators to invest in their countries.
The European data center colocation market is witnessing significant investments in submarine cable projects from service providers such as Google, Facebook, and Microsoft. The increase in colocation providers involved in expanding existing capacity will continue to drive the market revenue during the forecast period. The European colocation market is also witnessing increasing investments from operators through mergers and acquisitions and joint ventures. The market witnessed the merger of Interxion and Digital Realty in Q1 2020, which was among the largest deals in the European data center colocation market. Equinix partnered with GIC, a Singapore-based sovereign wealth fund, to invest USD 1 billion in developing xScale data centers across Europe. In July 2020, Stratus DC Management, a member of the EXS Capital Group (EXS), entered a strategic partnership with Cromwell Property Group to develop new facilities across Europe.
Ericsson, Verizon, Huawei Technology, and Nokia are among the major network infrastructure providers that have provided 5G network installation infrastructure in the region.
This research report includes a detailed segmentation by:
Europe data center colocation market by electrical infrastructure is expected to reach USD 3.48 billion by 2026.
To overcome the challenges of VRLA batteries, vendors are introducing lithium-ion UPS solutions, Nickel Zinc, and Prussian Blue Sodium-ion batteries. In 2020, the adoption of lithium-ion UPS systems grew considerably. UPS systems were the highest contributors to market investments by adopting VRLA battery-powered systems in power infrastructure.
Cooling systems and IT infrastructure are predominant consumers of power in data centers. Over the past few years, the operators have adopted innovative and energy-efficient cooling infrastructure solutions to reduce power consumption by up to 50% in the European data center colocation market.
UPS system to occupy incremental growth of USD 0.30 billion by 2026.
VRLA battery-powered UPS systems are most widely used in the data center environment and other industrial applications. The contribution from colocation providers will be high in lithium-ion UPS solutions. Vendors are continuously innovating with UPS solutions to boost efficiency and reduce cost. For instance, ZincFive, a US-based battery developer and manufacturer, launched a megawatt-class UPS system for data centers based on Nickel-Zinc batteries.
The construction of large and mega facilities across Europe will help the market for generators in the data center environment. The adoption of Diesel Rotary Uninterruptible Power Supply (DRUPS) systems is also growing. For instance, the QTS Realty Trust Eemshaven Data Center facility is equipped with 20 MW of critical power and installed with 21 DRUPS systems and 26 generators, providing a minimum of a 24-hour backup with the redundancy of N, 2N, and N+1. The requirement for generators in Europe with higher redundancy is lower since renewable energy sources are powering the facilities.
Europe data center colocation market by cooling systems is growing at a CAGR of 4.73% during the forecast period.
Data center operators are looking for efficient solutions to reduce their CAPEX and OPEX, conserve data center space, and reduce the power consumption of cooling units. Europe experiences colder climatic conditions and will continue to use indirect evaporative coolers and air/water-side economizers. Free cooling chillers that facilitate partial cooling using outside air are also highly preferred by several facilities. For instance, NTT Global Data Centers’ (e-shelter) London 1 data center facility is equipped with N+1 redundancy of water-based cooling systems supported by free cooling. In data center projects, the investment in cooling systems is expected to be 15–20% of the overall cost, depending on the facility design and IT load.
In 2020, the Europe data center colocation market by physical security was valued at USD 0.20 billion.
The adoption of data center physical security systems mainly depends on the growth of retail colocation services, which requires higher security. The application of innovation in connected security products is boosting the growth in the European market. In the coming years, the European data center colocation market will witness increased robotic monitoring systems with sensors and video surveillance.
Retail Colocation accounted for around 72% of the European data center colocation market share.
The retail colocation market is likely to be driven by the high demand for colocation services from developing countries. In comparison to wholesale colocation services, retail colocation services are highly suitable for those enterprises that require lesser computing power at a single site or across multiple locations to service global and local customers. The retail colocation market is expected to witness significant growth during the forecast period.
Europe data center colocation market by Tier III solutions to grow at the highest CAGR of 7.08% by 2026.
UPS and PDU systems of Tier II data centers are equipped with minimum N+N redundancy. The UK has around 16 Tier III certified facilities that local and global service providers develop, namely, Pure Data Centres, VIRTUS Data Centres (ST Telemedia Global Data Centres), Colt Data Centre Services, Fujitsu Services, and Ark Data Centres. A majority of under-developed projects across the region fall under the Tier III category. This trend is likely to continue throughout the forecast period. Many operators are expected to move to the Tier IV category based on the growth in rack power density and critical data center applications. Italy, Spain, and Luxembourg are the major locations with Tier IV facilities.
In 2020, the Western Europe colocation data center market witnessed investments in over 70 projects.
The data center market in Western Europe witnessed significant investment growth in countries such as the UK, the Netherlands, Germany, France, Ireland, Spain, Italy, Portugal, Belgium, and Switzerland. Multiple projects are being carried out by colocation, cloud, telecommunication, and internet service providers in Western Europe. The market will also witness the continuous adoption of cloud services among SMEs, with the heightened interest in the digital transformation of businesses by adopting solutions such as IoT, big data, and artificial intelligence. The demand for smart devices and growing internet penetration will also fuel colocation facilities and corresponding infrastructure in the region.
The leading data center operators in Western Europe include Equinix, Interxion (Digital Realty), Digital Realty, VIRTUS Data Centres, CyrusOne, Aruba, Colt Data Centre Services, Global Switch, QTS Realty Trust, and Vantage Data Centers. In April 2021, Equinix announced the completion of its AM7 data center in Amsterdam, with an area expansion of around 44,000 square feet.
In terms of the area added across Europe, Vantage Data Centers was closely followed by Equinix, with a market share of around 7.2%.
Equinix was a leading operator in the colocation market, and the average occupancy rate for Equinix data centers in Europe was around 80-85%. The company generated over USD 1.44 billion from colocation services, a jump of over 2.8% from the revenue generated in 2019. CyrusOne had a share of around 5.7% in terms of the area added in the Europe colocation market in 2020. It added around 238,000 square feet of data center space to develop around five facilities across the UK, Ireland, Germany, and the Netherlands.
Bahnhof is one of Sweden’s internet service providers that provides data center services across its six facilities. Its Pionen data center, an environment-friendly facility built below the ground, adds around 21 MW of IT load.
Segmentation by Infrastructure
Segmentation by Electrical Infrastructure
Segmentation by Mechanical Infrastructure
Segmentation by General Construction
Segmentation by Service Type
Segmentation by Geography
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