Report Overview

The Europe data center colocation market is growing because of factors such as the increasing adoption of cloud-based services and growing trend of remote working style, increasing internet penetration and AI along with the the expanding construction of data centers for colocation purposes.

The Europe data center colocation market was worth USD 12.9 billion in 2020 and is further projected to reach USD 29.8 billion by the year 2027, growing at a CAGR of 12.9% in the forecast period. The increasing adoption of cloud-based services and the growing trend of remote working are the major factors propelling the growth of the Europe data center colocation market. Also, the increasing number of data centers being constructed for colocation purposes would drive the Europe data center colocation market during the forecast period.

Source: BlueWeave Consulting

Europe Data Center Colocation Market- Overview

A company's data center is the department that manages the company's back-end IT systems and centralizes its shared IT operations in order to store, process, and disseminate data and applications. Data center made up of networked computers stores large amounts of data. But these spaces are often expensive. Hence, colocation data centers, commonly referred to as 'colo', are used to rent out rack space for servers to other companies. In simple words, the process of leasing data center space and infrastructure, including electricity, physical security, network bandwidth, and cooling components, to end-users is known as data center colocation.

Europe Data Center Colocation Market Forecast and Trends

Growth Drivers

Increasing Adopting of Cloud Technologies

Data centers is one of the most essential components of cloud technologies. With the growing adoption of cloud technologies, cloud data centers are supporting high amounts of data workloads for enterprises. By integrating cloud storage strategies and tangible storage options, data centers and companies are constantly developing data storage infrastructure and technology in order to fulfill the growing data storage demand. Data that is accessed by the cloud is stored in data centers. For instance,on-demand services like Dropbox, Google Photos, Netflix, etc., store their data in data centers.

Benefits of Data Center Colocation to Small and Medium Sized Enterprises

Small and medium-sized businesses can gain several benefits from switching to data center colocation in the long run. Companies who outsource their data centers are able to fulfill their customers' needs and objectives without having to spend money on technological maintenance. Small businesses can benefit greatly from the cost-effectiveness that it offers. In addition to lowering costs and increasing profit margins, data center colocation eliminates the expenses associated with purchasing an additional space and hiring a contractor, which proves favorable for the market growth.

Restraints

High Capital Investment and Maintenance Cost

Data center colocation spaces require huge capital investments and even large amounts of maintenance. Moreover, data centers' location poses great complications since they need to be close to major fiber optic trunk lines in order to control costs. These centers also require heavy power and security structures. Furthermore,the yearly operating costs of a large data center range from USD 10 million to USD 25 million, excluding hardware, software, disaster recovery, power supply, and networking. These factors act as a significant restricting factor for the growth of the Europe data center colocation market.

Impact of COVID-19 on Europe Data Center Colocation Market

As a result of the sudden COVID-19 outbreak, several European countries such as Russia, France, Italy, etc. have been critically impacted. As a result, the market has begun to move into remote working - a completely new concept, especially for small and medium enterprises. The large volume of data generated every day needed strong support to function properly and without any hindrance. As a result, the Europe data center colocation market witnessed immense growth opportunities. Moreover, the adoption of cloud computing proliferated significantly during the pandemic which has contributed to the growth of the overall Europe data center colocation market.

Europe Data Center Colocation Market - By Colocation Type

Based on colocation types, the Europe data center colocation market is segmented into retail colocation, and wholesale colocation. The retail colocation data centers segment accounts for the largest market share. Retail colocation data centers offer racks, private data center suits, cabinets, etc., and are also cost-efficient, which proves to be beneficial for the small and medium sized enterprises. However,wholesale colocation also occupies a substantial share of the market due to the tendency of larger enterprises to use these services since they offer large space and are able to handle huge volumes of data.

Europe Data Center Colocation Market - By Enterprise Size

Based on enterprise size, the Europe data center colocation market is segmented into small & medium enterprises, and large enterprises. The large enterprise segment captures are largest market share because of the high amount of data it generates and stores, which needs functional data centers to operate smoothly. Furthermore, their high financial capacity as compared to the small & medium enterprises allows them to lease colocation spaces for their needs. Having their data on colocation spaces also benefits large enterprises as they have full control over their data.

Europe Data Center Colocation Market - Regional Insights

Geographically, the Europe data center colocation market is segmented into Germany, Russia, UK, France, Italy, Spain, and rest of Europe. The UK covers substantial share in the market and is expected to witness high CAGR during the forecast period as well. This is because of the rapid digitization, high internet penetration and growing use cases of Augmented/Virtual Reality and artificial intelligence AI. It is also home to several leading data center colocation providers such as Colt, Interxion, Orange Business Services, etc.

Competitive Landscape

The leading market players in the Europe data center colocation market are Cyxtera Technologies, Inc., Digiplex, CyrusOne, Inc., Global Switch, Verne Global, Telehouse, NTT Limited, Interxion, Hetzner Online GmbH, Herman IT, Green Mountain, Ficolo Ltd., Etix Everywhere, Equinix, Inc., DATA4 Group, Echelon Data Centers, Aruba, Bahnhof, QTS Realty Trust, and other prominent players.

The leading industry players often engage in mergers and acquisitions to expand their market presence in local spaces. The European data centers are also attracting foreign investment as global companies are focusing on establishing and expanding their market. Additionally, the adoption of other competitive strategies like partnerships, collaborations, joint ventures, etc., are also very prominent in this market.

Recent Developments

• In July 2021, Kao Data, a US-based colocation service provider, announced to have become UK’s first data center to transition all backup generators at its Harlow campus to HVO (hydrotreated vegetable oil), which will allow it to eliminate up to 95% of net CO2 from their backup generators.

• In July 2021, maincubes B.V., a Netherlands-based database management company, announced its second facility development in Frankfurt which will have a power capacity of 20MW.

Scope of the Report

By Colocation Type

• Retail Colocation
• Wholesale Colocation

By Enterprise Size

• Small & Medium Enterprises
• Large Enterprises

By End-User

• IT & Telecom
• Retail
• Healthcare
• BFSI
• Media & Entertainment
• Others

By Region

• Germany
• Russia
• UK
• France
• Italy
• Spain
• Rest of Europe