This market research report on the Europe data center construction market covers market sizing and forecast, market share, industry trends, growth drivers, and vendor analysis. The market study includes insights on segmentation by electrical infrastructure (UPS Systems, generators, transfer switches and switchgears, rack PDUs, and other electrical infrastructure), mechanical infrastructure (cooling systems, racks, and other infrastructure), tier standards (Tier I&II, Tier III, and Tier IV), general construction (building development, installation and commissioning services, building design, physical security, DCIM (datacenter infrastructure management software), and countries (Western Europe: Netherlands, UK, Germany, and France), (Central and Eastern Europe: Russia and Czech Republic, Poland and Austria, and other countries), and Nordic region (Denmark, Finland, Sweden, Iceland, and Norway).
The increased procurement of renewable energy sources for data centers operations, the rise in data center automation, and the emergence of Lithium-ion batteries and fuel cells are expected to drive the Europe data center construction market. Ericsson, Deutsche Telekom, Telia Sonera, Telenor, and Tele2 TDC Group along with government agencies are investing a high capital in improving internet connectivity in Western Europe and the Nordic region. The Europe data center construction market is expected to grow due to increased investments from colocation, cloud, internet, and telecommunication service providers. Further, growth in data, general data protection regulation (GDPR), the popularity of social media, high adoption of smart wearable devices, and the rise of connected reality will be significant growth drivers for Europe data center construction market. The Europe data center construction market is expected to reach around $13 billion by 2024, growing at a CAGR over 4% during 2018–2024
The implementation of GDPR will aid the investment in several countries across Europe
Europe is one of the leading active data center markets, which is expected to grow at a CAGR of 16% during the forecast period. According to the Global Interconnection Index by Equinix Frankfurt, about 70% of the data traffic is concentrated in Germany, France, Italy, Spain, and the UK. London is expected to be the largest interconnection market. Hyperscale service providers are actively investing in the Europe data center construction market. For example, Microsoft is expected to open its cloud region in Germany by the end of 2019 or early 2020. The investment in data center technology, especially edge computing facilities, is expected to grow in several facilities after 2020 in the European region. EdgeConnex is among the leading-edge datacenter operator that is likely to increase its presence in the European market with operations in Amsterdam, Dublin, Munich, and Warsaw. The augmenting numbers of connected devices are expected to triple by the end of the forecast period, and the investment on edge computing facilities will grow post-2020 in the region. EdgeConnex and other colocation service providers have also planned to establish facilities in the Europe data center construction market.
In the last few years, mergers and acquisitions in the European market have grown significantly with Equinix acquiring Telecity Group, ICT-Center, Iconic, and Zenium Data Center (Istanbul). Digital Realty also expanded its presence in the market after acquiring eight colocation facilities from Equinix in 2016. The market also witnessed several acquisitions by APAC-based datacenter operators, including ST Telemedia GDC, which acquired VIRTUS (UK); NTT acquired e-shelter (Germany); and Kepple DC acquired Maincubes (Germany). Strategic collaborations will continue during the forecast period, and the market will witness the entry of several major service providers across Europe.
This market research report includes a detailed segmentation of the market by electrical infrastructure, mechanical infrastructure, tier standards, general construction, and countries.
Europe Data Center Construction Market: Electrical Infrastructure
Hyperscale investment will increase the installation of lithium-ion batteries, and 48V DC powered UPS systems
The Europe data center construction market by electrical infrastructure can be classified into UPS systems, generators, transfer switches and switchgears, rack PDUs, and others (utility transformers, power cables and panels, lighting equipment, installation services, busbars, circuit breakers, and TVSS systems). The UPS systems and generators segments account for significant market shares and are expected to grow at CAGRs of approximately 5% and 4%, respectively, during 2018–2024. In 2019, western Europe is likely to witness the opening of over 20 data center projects with the power capacity of more than 10 MW. The European data center market is adopting pre-fabricated datacenters, which will add more revenue for less than 1 W UPS systems.
Generators are mostly adopted with the redundancy of N+N. For example, Facebook’s Sweden data center has reduced 70% generator capacity after the adoption of hydro-electric power solutions. The Europe data center construction market will witness an increase in revenue for lithium-ion powered 48VDC UPS systems, intelligent power infrastructure solutions with remote monitoring and artificial intelligence during the forecast period.
Europe Data Center Construction Market: Mechanical Infrastructure
The ability to use outside air for over 5,000 hours in a year will grow the demand for evaporative/adiabatic/air-side economizer systems
The Europe data center construction market by mechanical infrastructure can be classified into cooling systems, racks, and others. The cooling systems segment has captured a major portion of the European market and is expected to grow at a CAGR of over 4% during 2018–2024. Computer room air conditioners (CRAC), computer room air handlers (CRAH), chillers, cooling towers, and dry coolers are the commonly adopted cooling infrastructure in the Europe data center construction market. The use of indirect evaporative cooler and air/water-side economizers will continue to grow in Nordic countries and Northern Western Europe, facilitating free cooling for a minimum of 8,000 hours per year.
Racks are used to mount the IT infrastructure in data centers. They are commonly referred to as enclosures, cabinets, and containment systems. Infrastructure vendors are also supplying rack-level converged systems, which are factory build and installed as a plug and play solutions across data centers. Colocation vendors are also designing facilities to support OCP rack designs. For instance, Kao Data Centre in the UK facilitates the installation of OCP design-based rack infrastructure.
Europe Data Center Construction Market: Tier Standards
Data center service providers across Eastern Europe will depend on Uptime Institute certifications to attract customers
The Europe data center construction market by tier standards can be divided into Tier I&II, Tier III, and Tier IV. Tier IV data center facilities are the fastest growing segment in the Europe data center construction market and are expected to grow at a CAGR of approximately 6% during 2018–2024. The Uptime Institute has developed a Tier Classification System (tier I−4), which evaluates datacenter facilities based on their infrastructure performance, efficiency, redundancy, and high availability. In 2017, Switch, a leading data center developer and operator, designed a tier V data center, which covers the entire data center design and development, including the use of renewable energy sources as a classification parameter.
Tier IV data centers are the preferred choices for hyperscale service providers such asFacebook, Apple, Microsoft, and Google as they have a minimum 2N+1 redundancy in power and cooling infrastructure. Denmark, Netherland, Norway, and Germany are a major contributor toward the tier IV market as these countries are witnessing increased construction of hyperscale facilities. The contribution of tier IV data centers will grow due to the establishment of multiple hyperscale data center in the region during the forecast period.
Europe Data Center Construction Market: General Construction
Increased investment by hyperscale service providers will develop job opportunities in the market
Building development and designing, installation and commissioning services, physical security, and DCIM (data center infrastructure management software) are major constituents of the general construction segment. Building development and installation and commissioning services are the fastest growing segments and are expected to grow at a CAGR of around 3% and 5%, respectively. While increased hyperscale investments by companies such as AWS, Google, Facebook, Apple, and Microsoft will increase a high demand for skilled workforce in several European countries, including Denmark, Ireland, Germany, etc., the data center market in Western Europe will witness an increase in facility designs that support OCP infrastructure operations.
Europe Data Center Construction Market: Geography
UK, Netherlands, Germany & France dominate Western Europe market investments
Western Europe (Netherlands, UK, Germany, France), Central and Eastern Europe (Russia and the Czech Republic, Poland and Austria, and other countries, and the Nordic region (Denmark, Finland, Sweden, Iceland, and Norway) are the major contributors to the Europe data center construction market. The UK and the Netherlands are expanding significantly, and the market in the UK is expected to grow at a CAGR of 2% during 2018–2024. Several global cloud service players such as AWS, Microsoft, and Google and many colocation service providers such as Equinix, Digital Realty, CyrusOne, and Colt DCS are expanding their presence in the UK, which is likely to increase the market growth. The implementation of cloud-based and big data services will be a strong growth enabler for the UK data center market, thereby fueling additional investments during the forecast period.
Western Europe constitutes of cities such as Frankfurt, London, Amsterdam, and Paris. These cities are major investment destinations in the European market. Countries in Central and Eastern Europe - Russia, Czech Republic, Poland, and Austria - are also contributing to the Europe data center construction market significantly. The demand for internet-based services in the regions and the growth of cloud computing are the strong drivers for increased demand for data center facilities. 3data, Utilex, Dataline, Telehouse, and IXcellerate are the leading data center providers in Russia. In the Czech Republic, the data center providers include Czech Radio communication, TTC Teleport, ITL Group among others.
In the Nordic region, Denmark, and Norway are leading investment places. Denmark is an ideal location for business because of its closest proximity to other European countries and the presence of strong fiber connectivity inside the country.
Key Countries Profiled in the Report:
Key Vendor Analysis
Multiple initiatives by hyperscale service providers to reduce the cost of efficient infrastructure services are expected to aid the growth of the Europe data center construction market. Infrastructure resellers and distributors are expected to compete with each other in the region. The demand for cloud data service and high-density operations is expected to grow during the forecast period. Partnerships with local and modular data center service providers will increase revenues for global vendors operating in the market. The need for installation, commissioning, and maintenance services will generate local job opportunities in the market.
Key Vendors in Europe Data Center Construction Market:
Prominent Data Center Investors
Key Market Insights
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