Western Europe to drive the Data Center Colocation Market in EMEA


Arizton’s recent market research report on Data Center Colocation Market in EMEA - Industry Outlook and Forecast 2019-2024 provides comprehensive industry analysis, trend forecasts, and competitive analysis. The market study includes insights on the segmentation by Electrical Infrastructure (uninterruptible power supply (UPS) systems, generators, rack power distribution units (PDU), transfer switches & switchgear, and other electrical infrastructure), Mechanical Infrastructure (cooling systems, racks, and other mechanical infrastructure), General Construction (building development, installation & commissioning services, building design, physical security, and data center infrastructure management (DCIM)), Colocation Service Type (retail and whole), and Geography (Western Europe, Central and Eastern Europe, Nordic countries, and MEA).

The data center colocation market in EMEA is expected to grow at a CAGR of over 5% during the period 2018−2024.

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While the colocation market in Europe has witnessed a significant boost in investment since the implementation of the GDPR, data protection and privacy regulation in May 2018,  the MEA market has experienced growth due to the adoption of cloud-based services and the improvement in fiber connectivity across the region. Around 28% of organizations in the Middle East are using cloud-based customer engagement applications; 18 % have implemented cloud applications and 15% are planning to install cloud-based applications to improve business productivity.

  • About 71% organizations in EMEA are aiming to shift their business to the cloud platform.
  • Around 22% enterprise workloads in the Middle East are running in the hybrid cloud environment.

The data center colocation market in EMEA is segmented into electrical infrastructure, mechanical infrastructure, general construction, colocation services, and geography.

Western Europe to lead the market by 2025

The Western Europe data center colocation market witnessed significant investments in 2018, with multiple projects carried out by colocation service providers in Germany, the UK, the Netherlands, France, Ireland, Switzerland, Greece, Scotland, Portugal, Belgium, and Spain. The market is witnessing an increase in M&A activities. In 2018, Iron Mountain acquired EvoSwitch Amsterdam's data center business for $235 million. Similarly, Iron Mountain acquired two Credit Suisse data centers in London and Singapore for approximately $100 million transaction.

The Western Europe data center colocation market is rapidly growing. Germany is flourishing as the country receives the highest investment in the region. Germany witnessed investments from colocation service vendors such as NTT(e-Shelter), T-System, Interxion, Equinix, and Digital Reality. Frankfurt is the most preferred location for investments and is a data center hub in Germany.

Read: Hyperscale Data Center Market in APAC- Industry Outlook and Forecast 2020-2025

Increasing vendor Investments to drive EMEA Data Center Location Market

In the EMEA region, Equinix is among the leading investors in colocation data centers. The company invested in over 16 projects at the cost of around $0.75 billion. A majority of the investment from Equinix was identified in London, UK followed by Germany and the Netherlands. Across all these locations, the company has estimated spending of over $100 million.

In terms of investment, Interxion invested around $480 million through its 25 expansion projects in Western Europe. The company has a significant presence in Germany, the Netherlands, France, Denmark, Sweden, and the UK. In addition, Digital Reality is estimated to have invested around $300 million in six projects in the EMEA region. Frankfurt, London, and Amsterdam are the major cities, where the company has invested. The company invested around 30% of its total investment in the Frankfurt data center project.

T-System has invested around $200 million in its German facility. The company is also planning to invest in new data center development in this region. T-Systems, which is a subsidiary of Deutsche Telekom, operates multiple data centers in the continent and is constantly focusing on expanding its presence due to the increased demand for cloud and colocation services, Colt DCS  data center operator in Western Europe invested around $175 million in two facilities at London and Paris.

Read our Latest Report: Data Center Market in Europe - Industry Outlook and Forecast 2020-2025

Growth in Hyperscale Facilities to Generate more revenue for Installation and Commission Service Providers

Hyperscale investments in some European countries such as Denmark, Ireland, and Germany will generate a high demand for skilled professionals. Also, these facilities also employ engineers for design and installation and commissioning services. The involvement of sub-contractors is likely to increase as they have strong expertise in building structures. The labor cost in Western Europe is higher than Eastern European and Nordic countries. The growth in greenfield data center facilities will generate more revenue for installation and commission service providers.

Read Our Latest Report: Data Center Market in Middle East - Industry Outlook and Forecast 2020-2025

Equinix, Interxion, CyrusOne, NTT Communications, Digital Realty, Global Switch, and Deutsche Telekom are key prominent vendors in the data center colocation market in EMEA.

The complete overview of the latest market research report on the data center colocation market in EMEA by Arizton is now available.

The report offers a detailed study of major trends, drivers, challenges and provides market sizing and forecast for major geographical regions and key countries.

Read Our Latest Report: Data Center Colocation Market - Global Outlook and Forecast 2020-2025

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