In-depth Analysis and Data-driven Insights on the Impact of COVID-19 Included in this Europe Data Center Colocation Market Report

The Europe data center colocation market by investment is expected to grow at a CAGR of over 5.61% during the period 2020–2026.

The data center colocation market in Europe is an attractive asset with a better Return on Investment (ROI) than other commercial and industrial properties. In 2020, the outbreak of the COVID-19 pandemic was creating huge demand for cloud-based providers, and the majority of the workforce shifting to remote working in Europe. The need for colocation services led to strong utilization of existing data center space and drove service providers’ revenues by over 10% in Q1 and Q2 2020. The continuous adoption of cloud services among SMEs, with the rising interest toward the digital transformation of businesses by adopting solutions such as IoT, big data, and artificial intelligence. Governments across the region are reducing electricity prices and electricity taxes to attract data center operators to invest in their countries.

The following factors are likely to contribute to the growth of the Europe data center colocation market during the forecast period:

  • Impact of COVID-19 on Data Center Market
  • Increase in the Application of Cloud Connectivity
  • Growing Submarine Cable & Inland Connectivity
  • Rise in Colocation Investments

The study considers the present scenario of the Europe data center colocation market and its market dynamics for the period 2020?2026. It covers a detailed overview of several market growth enablers, restraints, and trends. The report offers both the demand and supply aspects of the market. It profiles and examines leading companies and other prominent ones operating in the market.

The Europe data center colocation market research report includes a detailed segmentation by infrastructure, electrical infrastructure, mechanical infrastructure, general construction, service type, tier standards, geography. 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. In terms of power infrastructure, UPS systems were the highest contributors to market investments by adopting VRLA battery-powered systems.
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 that is based on Nickel-Zinc batteries.

Datacenter 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.

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 Europe market. In the coming years, the Europe data center colocation market will witness increased robotic monitoring systems with sensors and video surveillance.

The retail colocation market is likely to be driven by the high demand for colocation services from organizations in 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.

UPS and PDU systems of Tier II data centers are equipped with minimum N+N redundancy. The UK has around 16 Tier III facilities that are developed by local and global service providers, 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 32 Tier IV facilities.

Segmentation by Infrastructure

  • Electrical Infrastructure
  • Mechanical Infrastructure
  • General Construction

Segmentation by Electrical Infrastructure

  • UPS System
  • Generators
  • Transfer Switches & Switchgears
  • PDUs
  • Other Electrical Infrastructure

Segmentation by Mechanical Infrastructure

  • Cooling Systems

o CRAC & CRAH Units
o Chiller Units
o Cooling Towers
o Condensers and Dry Coolers
o Economizers & Evaporative Coolers
o Other Units

  • Rack
  • Other Mechanical Infrastructure
  • Cooling Technique

o Air-Based Cooling Technique
o Liquid-Based Cooling Technique

Segmentation by General Construction

  • Core & Shell Development
  • Installation & Commissioning Services
  • Engineering & Building Design
  • Physical Security
  • DCIM

Segmentation by Service Type

  • Retail Colocation
  • Wholesale Colocation

Insights by Geography
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, coupled with growing internet penetration, will also fuel colocation facilities and corresponding infrastructure in the region.

Segmentation by Geography

  • Western Europe

o UK
o Germany
o Netherlands
o France
o Ireland
o Switzerland
o Italy
o Spain
o Other Western European Countries

  • Nordic Region

o Denmark
o Sweden
o Norway
o Finland & Iceland

  • Central & Eastern Europe

o Russia & Czech Republic
o Poland & Austria
o Other Central & Eastern European Countries

Equinix was the 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, with 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.

Prominent Data Center Colocation Providers

  • Aruba
  • Bahnhof
  • CyrusOne
  • Colt DCS
  • DATA4
  • Digital Realty
  • Equinix
  • Global Switch
  • Green Mountain
  • NTT Global Data Centers
  • QTS Realty Trust
  • Virtus Data Centres (ST Telemedia Global Data Centres)

Other Prominent Data Center Colocation Providers

  • 3data
  • acens Technologies
  • Adam
  • AzInTelecom
  • Bulk Infrastructure Group
  • China Mobile International
  • CloudHQ
  • Dataplace
  • DigiPlex
  • EcoDataCenter
  • Euclyde Data Centers
  • GlobalConnect
  • Hydro66 Holdings
  • Iron Mountain
  • KDDI
  • Keppel Data Centres
  • maincubes One
  • myLoc
  • NDC-GARBE Data Centers Europe
  • Nexica - Econocom Group
  • Orange
  • Rostelecom
  • Scaleway Datacenter
  • Telecom Italia Sparkle
  • Turkcell
  • T5 Data Centers
  • Vantage Data Centers
  • Yandex Cloud
  • Zayo Group

New Entrants in Europe Colocation Market

  • AQ Compute
  • Echelon Data Centres
  • Global Technical Realty
  • Stratus DC Management

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