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Hyperscale Data Center Market in Western Europe and Nordic - Industry Outlook and Forecast 2018-2023

SKU : ARZ181110
  • Published on : January 2019

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This market research report on Western Europe and Nordic hyperscale data center market offers analysis on market size & forecast, market share, industry trends, growth drivers, and vendor analysis. The market study also includes insights on segmentation by IT infrastructure (server, storage, and network), by electrical infrastructure (UPS systems, generators, transfer switches & switchgear, rack PDU, and other electrical infrastructure), by mechanical infrastructure (cooling systems, rack, and other infrastructure), by general construction (building development, installation and commissioning services, building design, physical security, and DCIM), and by geography (Western Europe and Nordic).

Western Europe and Nordic Hyperscale data center market

Western Europe and Nordic Hyperscale Data Center Market - Overview

The growing penetration of high-speed internet, fixed broadband, and superior network connectivity are the major factors attributing to the growth of Western Europe and the Nordic hyperscale data center market. Western Europe is the second largest region of data center operations. The increasing investments are aided by the adoption of cloud-based services, the Internet of Things (IoT), and big data analytics will augment the growth of the market in the European region. The growing popularity of hybrid infrastructure services and cloud connectivity solutions will encourage operators to promote datacenter construction in the Nordic and Western Europe. Colocation providers are among the largest investors in the region and are colocating space to customers on a wholesale basis. The presence of hyperscale operators such as Apple, Facebook, Google, AWS, Microsoft, Alibaba, OVH, and Aruba will contribute to the growing revenues in the European market. The colocation providers are constructing facilities spanning over 100,000 square feet with a rack power density of up to 50 kW. The focus on the deployment of various submarine cable projects by major operators such as Google, Facebook, and Microsoft will improve the connectivity. The availability of renewable energy, land for development, strengthening fiber connectivity, district heating techniques and reduction in electricity pricing are the major factors attracting facilities operators in the Nordic market. Alibaba’s expansion to the UK and Germany positively impacted the development of Western Europe and the Nordic hyperscale data center market.

The increasing focus on the development of innovating infrastructure solutions to reduce or decrease the consumption and power wastage leading to operational PUE of less than 1.3 in the market. The wholesale colocation providers are adopting OCP-ready design to attract new investors in the market. Western Europe and Nordic hyperscale data center market is estimated to generate revenues of around $29 billion by 2023, growing at a CAGR of approximately 10% during 2017-2023. The research report also offers market share analysis in terms of area (square feet) and power capacity (MW) during the forecast period.

Western Europe and Nordic hyperscale data center market overview and forecast

Western Europe and Nordic Hyperscale Data Center Market – Dynamics

The growing availability and procurement of renewable energy sources are propelling the growth of Western Europe and the Nordic hyperscale data center market. The Nordic region is by renewable energy sources which are attracting new investments in the market. Several countries in the Western European region are also slowly moving towards the procurement and installation of renewable power sources. The installation of wind turbines, solar, and hydropower to generate hundreds of MW of new power capacity every year will transform the Western European and Nordic market over the next few years. Facilities operators and colocation providers are establishing data centers in the Nordic region to reduce the cost of electricity and to operate facilities with minimal carbon emission in the market. Norway is leading the market in terms of renewable energy capacity production, followed by Sweden, Denmark, Finland, the UK, and Germany. The government initiatives to promote the use ofclean energy will help boost investment in Western Europe and Nordic hyperscale data center market.

Western Europe and Nordic Hyperscale Data Center Market – Segmentation

This market research report includes a detailed segmentation of the market by IT infrastructure, electrical infrastructure, mechanical infrastructure, general construction, and geography.

Hyperscale data center market segments in Western Europe and Nordic

Western Europe and Nordic Hyperscale Data Center Market – By IT Infrastructure

Adoption of ODM infrastructure solutions with support from OCP-ready datacenters will boost the revenue in Western Europe and Nordic hyperscale data center market

Western Europe and Nordic hyperscale data center market by IT infrastructure is segmented into the server, storage, and network. Server segment dominated the largest market share in 2017, growing at a CAGR of around 12% during the forecast period. The growing adoption of high-performance computing servers and hyper-converged infrastructure solutions is propelling the growth of this segment in the Western European and Nordic market. The market is witnessing a shift in the adoption of server infrastructure towards rack-scale infrastructure solutions over the next few years. The installation of ODM servers will create lucrative opportunities for leading service providers in the market. The competition between branded and white-box server suppliers to grow due to the increased demand for white-box infrastructure based on OCP designs will transform this segment in Western Europe and Nordic hyperscale data center market. The continuous innovations aided by the OCP community will revolutionize the market landscape.

The introduction of storage systems tailored to handle multiple workloads and the runs on Docker and OpenStack, and big data deployments running Hadoop or NoSQL, backup, archiving and disaster recovery will boost revenues in the market. The increase in adoption of 25 GbE and 50 GbE switches is transforming the networking deployment in Western Europe and Nordic hyperscale data center market at the top of the rack.

Western Europe and Nordic Hyperscale Data Center Market – By Electrical Infrastructure

Facilities powered by renewable energy source will reduce the redundancy on generators in Western Europe and Nordic hyperscale data center market

The electrical infrastructure segment in Western Europe and Nordic hyperscale data center market is classified into UPS systems, generators, transfer switches & switchgear, rack PDU, and other electrical infrastructure. Other electrical infrastructure is the fastest growing segment in the market in 2018, growing at a CAGR of around 6% during the forecast period. The other electrical infrastructure segment consists of utility transformers, lighting equipment, power cables and panels, busbars, circuit breakers, and transient voltage surge suppressor (TVSS) systems. The construction of modern facilities of tier III and tier IV standards is fueling the demand for other electrical infrastructure in the Western European and Nordic market. The use of dual feeds power sources for utility, and IT infrastructure will boost sales in the market. The facility operators are focusing on on-site substation deployment due to the high-power consumption, thereby contributing to the demand in Western Europe and Nordic hyperscale data center.

The innovations in the OPC community is leading to an increase in adoption of 12VDC UPS in the European market. The development of fuel cells is expected to reduce despondency on generatorsdata center UPS systems, and switchgear across facilities in Western Europe namely, the UK and Germany will drive growth in the Western Europe and Nordic hyperscale market.

Western Europe and Nordic Hyperscale Data Center Market – By Mechanical Infrastructure

The installation of indirect evaporative or adiabatic cooler will reduce cooling system power consumption up to 70%in Western Europe and Nordic hyperscale data center market

Western Europe and Nordic hyperscale data center market by mechanical infrastructure are categorized into cooling systems, rack, and other infrastructure. Cooling systems occupied the majority of the market share in 2017, growing at a CAGR of more than 4% during the forecast period. Indirect evaporative/adiabatic cooler and air/water-side economizers are the most commonly used cooling systems in the market. The adoption of free cooling chillers, which facilitate partial cooling of the facility using outside air will augment the growth in the market. The redundancy of cooling systems that are used across facilities is N+1, or N+N configuration in tier III facilities and Tier IV facilities adopt the 2N+1 redundant configuration for cooling systems in the market. The focus on adopting water-less cooling systems or use of ocean water to cool facility will continue in Western Europe and Nordic hyperscale data center market.

The rack size of 45U, 47U, and 48U is gaining immense popularity among facility operators in the Western European and Nordic region in the market. The growing demand for piping infrastructure for facilities that are designed to achieve cooling through water from lakes/seas will contribute to the revenues in Western Europe and Nordic hyperscale data center market.

Western Europe and Nordic Hyperscale Data Center Market – By General Construction

Demand for robotic and AI solutions will fuel the need for DCIM in Western Europe and Nordic hyperscale data center market

The general construction segment in Western Europe and Nordic hyperscale data center market is divided into building development, installation and commissioning services, building design, physical security, and DCIM. DCIM is the fastest growing segment in the market in 2017, growing at a CAGR of around 12% during forecast period. Features such as controlling power consumption, improving efficiency, and increasing operational capabilities are driving the need for DCIM solutions in the market. The vendors are offering monitoring and managing systems that focus on specific infrastructure such as power and cooling to gain a larger market share. The increasing use of artificial intelligence and robot monitoring systems will transform Western Europe and Nordic hyperscale data center market during the forecast period.

Thetax incentives from local governments will encourage operators to invest millions in the market providing strong revenue growth for multiple local sub-contractors. The installation of video surveillance cameras, biometric systems at every entrance and racks to avoid unauthorized user access will boost the requirement of physical security in Western Europe and the Nordic hyperscale data center market.

Western Europe and Nordic Hyperscale Data Center Market – By Geography

Implementation of GDPR will continue to drive significant investments in Western Europe and Nordic hyperscale data center market

Western Europe and Nordic hyperscale data center market by geography are segmented into Western Europe (the UK, Germany, France, Netherlands, Ireland, and others) and Nordic (Denmark, Norway, Sweden, and Finland & Iceland). Western Europe dominated the largest market share in 2017, growing at a CAGR of approximately 11% during the forecast period. The growing adoption of multiple cloud-based services among organizations across different industry verticals is driving the growth of the Western European region in the market. The UK, Germany, Netherlands, France, Italy, and Ireland with strong network connectivity is driving investments in this region in the market. Google, Digital Realty, and Equinix are investing millions of dollars in the deployment of modern hyperscale facilities across the region and contributing to the revenues in Western Europe and Nordic hyperscale data center market.

Leading companies such as Apple, Facebook, Google, and Amazon Web Service (AWS) are contributing to the investments in the Nordic market. The Nordic region can facilitate free cooling for 90% area annually which is leading to the expansion of the area in Western Europe and Nordic hyperscale data center market.

The key countries profiled in the report are:

  • UK
  • Germany
  • France
  • Netherlands
  • Ireland
  • Others
  • Denmark
  • Norway
  • Sweden
  • Finland & Iceland

Key Vendor Analysis

Western Europe and Nordic hyperscale data center market are witnessing the entrance of several cloud service providers intensifying the competition. The establishment of stringent data regulations will encourage vendors to innovate their product portfolio in the market. The penetration of open source infrastructure solutions such as ODM infrastructure will increase the level of competition in the market. The emergence of 200G and 400G will drive the demand for hyper-converged and hyperscale infrastructure in Western Europe and Nordic hyperscale data center market.

The major vendors in Western Europe and Nordic market are:

  • Apple
  • Amazon Web Service (AWS)
  • Aruba S.P.A
  • Facebook
  • Google
  • Microsoft
  • OVH
  • IBM

Other prominent vendors include Alibaba, CyrusOne (Zenium), Digital Realty, EcoDataCenter, Equinix, Global Switch, Hydro66, Iliad Data Center, INFINITY SDC,  Kao Data ( Harlow Operations Ltd), NTT Communications (e-shelter), SAP, ST Telemedia Global Data Centres (STT GDC), T-Systems (Deutsche Telekom), and Verne Global.

Key market insights include

  1. The analysis of Western Europe and the Nordic hyperscale data center market provides market size and growth rate for the forecast period 2018-2023.
  2. It offers comprehensive insights on current industry trends, trend forecast, and growth drivers about Western Europe and Nordic hyperscale data center market.
  3. The report provides the latest analysis of market share, growth drivers, challenges, and investment opportunities.
  4. It offers a complete overview of market segments and the regional outlook ofWestern Europe and Nordichyperscale data center market.
  5. The report offers a detailed overview of the vendor landscape, competitive analysis, and key market strategies to gain competitive advantage.

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