This research report on the Europe data center market cover market 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), 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, Nordic Region, and Central & Eastern Europe).
The data center market in Europe has witnessed a significant boost due to the implementation of the general data protection regulations (GDPR) in May 2018. The adoption of GDPR has prompted several cloud service providers to establish data centers in Europe. AWS opened its cloud region in Sweden (2018). Microsoft opened its cloud region in Switzerland (2018), Germany (2019), and is planning to open a cloud region in Norway (2020). Microsoft is also expanding its presence with the construction of data center buildings in the Netherlands. Apart from investing in data centers across the Netherland, Belgium, and Ireland, Google has announced to open a cloud region in Frankfurt, Germany, in 2020. Hence, the implementation of data protection and privacy policies in Europe is expected to contribute to the global data center market growth.
Another major factor driving the growth is increased investment by colocation service providers in the Europe colocation market. In Western Europe, Germany, the UK, and the Netherlands continue to witness high investments, with Ireland’s contribution likely to grow significantly in the next few years. In terms of colocation investments, Sweden dominates the market, followed by Norway. Therefore, the increased investment in the expansion and construction of data center projects across Europe is influencing the market.
- The use of evaporative coolers and air/water-side economizers is likely to grow among data centers across Europe. Water-based systems will continue to contribute majorly to the market growth
- Hyperscale providers such as Google will invest more than $1 billion to expand their presence in the region. It is expected that AWS, Microsoft, Alibaba, and IBM will continue to add significant revenues to the market during the forecast period.
- 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 contribution of AI-based servers is growing, which is around 10–15% of the total server infrastructure management
- The adoption of efficient power solutions is likely to aid data center operators in maintaining the PUE of upcoming facilities at less than 1.4.
The Europe data center market by investment is expected to grow at a CAGR of over 1% during the period 2019–2025.
EUROPE DATA CENTER MARKET SEGMENTATION
This research report includes a detailed segmentation by IT infrastructure, electrical infrastructure, mechanical infrastructure, general construction, tier standards, and geography.
INSIGHTS BY IT INFRASTRUCTURE
The IT spend in Europe is growing significantly YOY with Western Europe and the Nordic region contributing to maximum share. The demand for servers is expected to grow during the forecast as service providers expand their presence globally. Cloud servers are likely to a popular choice among enterprises due to the growing demand for cloud platforms in the region. In terms of storage, enterprises have shown increased interest in the procurement of all-flash storage infrastructure. The adoption of NVMe flash storage in Germany is the highest in the region. In terms of networking, the region is mainly dominated by Ethernet switches, especially 25/40/100 switch ports. However, the adoption of 200/400 GbE ports will have a significant impact on data center interconnection solutions.
The growing adoption of cloud computing services in Nordic leads to an increased number of IT infrastructure components. Finland, Sweden, and Denmark are the leading contributors to cloud adoption with a minimum of 50% of enterprises opting for cloud computing services. The increased construction of facilities in the region is likely to be the major boost for the IT infrastructure segment and related sub-segments. Besides, the growing investment in data centers and the implementation of GDPR are fueling the growth of the server market over the past two years.
The growing investment in big data technology is expected to drive investment in Central and Eastern Europe. The market is likely to witness significant growth in high-performance computing infrastructure, along with server systems suitable for machine learning and artificial intelligence workloads. In terms of storage infrastructure, flash storages are likely to gain traction in Poland, Austria, the Czech Republic, and Russia. Most large data centers in Poland have equipped with flash storage solutions. The declining cost of SSDs is likely to play a vital role in the adoption of flash storage among SMEs. The hybrid storage infrastructure is a preferable solution for enterprises with budget constraints in Central and Eastern European countries.
INSIGHTS BY ELECTRICAL INFRASTRUCTURE
The European market has a strong potential for UPS systems due to the increasing greenfield construction, especially greater than 10 MW. The market is expected to witness high adoption of scalable UPS solutions. The UK, Germany, the Netherlands, France, and Ireland are the major power infrastructure revenue contributors. Several facilities have adopted flexible designs to facilitate the installation of dual power feeds to the facility, 2N redundant UPS and PDU systems, and N+1 generator systems. The use of water-based cooling includes water-treatment plants and systems that can aid the consumption of water up to 20%. However, the major challenge in the region is the non-availability of skilled workforce to maintain data center infrastructure management. The hyperscale market growth is likely to fuel the procurement of 48V DC UPS systems. The facilities built in the Nordic region mostly procure >2 MW capacity generators. In Nordic, most facilities are powered through renewable energy sources with grid stability of over 95%, which reduces the procurement of redundant generator systems.
INSIGHTS BY MECHANICAL INFRASTRUCTURE
Several data centers in Western Europe support free cooling systems, which include adiabatic coolers, evaporative coolers, and free cooling chiller systems. The use of these systems will continue to grow among European countries because the region offers free cooling for a minimum of 5,000 hours per year. A few facilities also use chillers that facilitate cooling by using outside air and water-based cooling during summers. Most facilities in the Nordic region adopt free cooling techniques. The Nordic data center market facilitates free cooling for over 8,400 hours per year, and the use of free cooling systems will continue to add revenue during the forecast period. All Central and Eastern European countries support free cooling of over 6,000 hours annually. Many facilities have been equipped with in-direct evaporative/adiabatic coolers. A few facilities have also adopted water/glycol-based cooling systems along with highly efficient DX-based CRAC systems to cool facilities.
European countries are the major revenue generators for economizers and evaporative coolers, which include adiabatic cooling units to cool data centers using outside free air. However, some facilities adopted water-based cooling systems for cooling purposes. In general, these systems, along with facilities that use CRAC and CRAH units, are built with N+N redundancy.
Insights by General Construction
Western Europe is the most prominent data center construction market in Europe. Many facilities are designed and built to cover an area of over 100,000 square feet. The demand for data centers has increased revenue opportunities for multiple contractors and sub-contractors. Most enterprise data center operations include the procurement of modular infrastructure solutions from local service providers, thereby increasing the growth of the modular data center market. Jones Engineering, ISG, Red-Engineering, Kirby Group, and Mercury Engineering are key players providing construction services in the UK. In terms of physical security, several facilities are constructed with multi-level security. There is a growing demand for IP video surveillance systems in the market. Service providers are securing their facilities with 3-meter-high secure perimeter fencing with extensive CCTV control, vehicle lock to the site entrance, and biometric readers in data halls with 24/7-year on-site security. The growing hyperscale data center market will be a major boost to contractors and sub-contractors operating in the market. Most of these projects are built in collaboration with global data center construction contractors and sub-contractors.
Central and Eastern Europe has a strong presence of local and global contractors involved in constructing facilities. Also, infrastructure providers have a strong presence in supplying modular or containerized data center solutions in the region. The market is witnessing an increase in the construction of greenfield projects with a floor area of over 50,000 square feet. This will, in turn, increase the demand for sub-contractors in the region.
INSIGHTS BY TIER STANDARDS
Data center facilities are increasingly certified as Tier III by the Uptime Institute due to their high standard design and construction. Tie IV facilities are seen in Norway, the Netherland, Denmark, Ireland, Belgium, Italy, the Czech Republic, and Switzerland, which is contributing toward hyperscale investments. Tier IV data centers are equipped with at least 2N+1 redundancy in every infrastructure that makes the facility fault-tolerant, with some facilities having 2N+2 redundancy in few critical infrastructures such as UPS systems and PDUs. The contribution of hyperscale developers is aimed at making facilities that are fully fault-tolerant to provide customers with satisfaction while connecting with cloud-based services in the region.
In Finland & Iceland, three facilities are Uptime Institute Certified under the Tier III category. As the construction of new facilities increases, the need for skilled construction employees and operational personnel also grows. The location of Iceland is also suitable for innovative data center designs. Most facilities are designed to be of Tier III standards with a minimum of N+1 redundancy across UPS and generator systems in Central and Eastern Europe. Mega facilities are being built with dual power feeds. However, the use of renewable energy sources to power data centers is low in the region.
INSIGHTS BY GEOGRAPHY
The implementation of GDPR has been a strong driver for the growth of data center market in Western Europe. Hyperscale operators are involved in the rapid expansion of the cloud platform across Western Europe. The market will witness the continuous adoption of cloud services among SMEs, with the increased interest shown toward the digital transformation of businesses by adopting solutions such as IoT, big data, and artificial intelligence. The demand for smart devices, coupled with growing internet penetration, will fuel the growth of data centers and corresponding infrastructure in the region.
The market in Nordic is a matured market with hyperscale operators and cloud service providers as a major contributor in terms of investment. Denmark received the highest investment from hyperscale operator (Facebook) and colocation service providers such as Digiplex, GlobalConnect, and Interxion. The data center market is dominated by Russia & Czech Republic, Austria, Poland, and Serbia. Colocation service providers are major investors. The Central European government is accelerating the adoption of cloud services and moving toward e-governance. In the Central and Eastern Europe data center market, Poland is in the process of developing e-governance, which aims to bring government services and information together on a single platform. Central and East Europe is fast emerging as a center of gaming developers and software development houses, with several companies emerging as the fastest-growing ones in the region.
- Western Europe
- Nordic Region
- Finland & Iceland
- Central & Eastern Europe
- Russia & Czech Republic
- Poland & Austria
KEY VENDOR ANALYSIS
By IT infrastructure, the adoption of ODM-based infrastructure solutions is gaining traction among enterprise operators in the European region. The deployment of OCP-ready data centers by colocation operators has aided in this growth. In terms of electrical infrastructure, Eaton, Schneider Electric, Legrand, Vertiv, ABB, and Socomec have a strong presence in the market.
Prominent Data Center Critical (IT) Infrastructure Providers
- Dell Technologies
- Extreme Networks
- Hewlett Packard Enterprises (HPE)
- Hitachi Vantara
- Inspur Group
- Pure Storage
- Quanta Cloud Technology
- 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
- 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
- Delta Group
- KINOLT (Euro-Diesel)
- Hitech Power Protection
- KOHLER (SDMO)
- Nlyte Software
- Piller Power Systems
- Riello UPS
- MTU On Site Energy (Rolls-Royce Power Systems AG)
- Schneider Electric
- Socomec Group
- Trane (Ingersoll Rand)
KEY MARKET INSIGHTS INCLUDE
The report provides the following insights into the Europe data center market during the forecast period 2020–2025.
- It offers comprehensive insights into current industry trends, forecast, and growth drivers about the Europe data center market.
- 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 Europe data center market.
- The study offers a detailed overview of the vendor landscape, competitive analysis, and key strategies to gain competitive advantage.
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