Europe Data Center Colocation Market Is Expected To Hinder The Growth By 2028

 Europe Data Center Colocation Industry Overview

The Europe data center colocation market size is anticipated to reach USD 33.66 billion by 2028, recording a CAGR of 13.1%, over the forecast period, according to a study conducted by Grand View Research, Inc. The market is driven by the factors such as the rising costs of data center infrastructure, lack of floor space, and rising power costs. Enterprises are inclined toward colocation data centers as it enables them to place their infrastructure in proximity to their users and provide better services. Additionally, colocation data centers also fulfill their power and space requirements while offering them the option to scale up their infrastructure as per the requirement.

 

The ongoing technological boom with the rollout of devices equipped with advanced technologies such as 5G, Internet of Things (IoT), Artificial Intelligence (AI), and Augmented Reality (AR) is expected to further drive the market growth. Considering that these technologies would require improved network connectivity and reduced latency, the interconnectivity across Europe will also rise, presenting an excellent opportunity for colocation providers to localize their services. According to Equinix Inc.’s interconnection network index, the interconnection bandwidth across Europe is expected to reach 3,872 Tbps by 2023 from 1,182 Tbps in 2020.

The colocation market in Europe is further expected to gain traction amid the COVID-19 pandemic. With several organizations adopting the work from home policy, enterprises are moving toward multi-tenant data centers to increase proximity to users. Lockdowns imposed across numerous countries have led to a surge in the use of OTT services, which is also expected to fuel the demand for colocation facilities in Europe.


Europe Data Center Colocation Market Segmentation

Grand View Research has segmented the Europe data center colocation market based on colocation type, end-use, enterprise size, and region:

Based on the Type Insights, the market is segmented into Retail Colocation, and Wholesale Colocation.

  • The retail colocation segment accounted for over 70% of the revenue share in 2020, attributed to the rise in small and medium scale industries in the emerging countries across Europe. Small enterprises have limited data storage requirements, due to which they do not require dedicated data centers.

 

  • Wholesale colocation data centers are still a preferred choice among large businesses as they offer large space, which can accommodate large data volume configurations. The implementation of GDPR has led to increased investments in the wholesale colocation space by major cloud service providers. 

 

Based on the End-use Insights, the market is segmented into Retail, BFSI, IT & Telecom, Healthcare, Media & Entertainment, and Others.

  • The healthcare segment is expected to register the highest CAGR of over 15% over the forecast period. The growth is attributed to the increasing importance of data storage in the healthcare industry. Additionally, government regulations such as the (EU) 2016/679 adopted by the European Union in 2016 have made it essential for public and private healthcare service providers across Europe to maintain electronic health records of patients and protect patient privacy.

 

  • The IT and telecom segment dominates the market presently with the largest market share and is expected to continue its dominance over the forecast period. The large market share is due to the continuous development of software and application in the industry and the launch of several start-ups across the region.

 

Based on the Enterprise Size Insights, the market is segmented into Small & Medium Enterprises, and Large Enterprises.

  • The large enterprise segment accounted for the largest revenue share of over 60% in 2020. This is attributed to major cloud service providers and hyperscalers adopting colocation services. Large enterprises manage a large volume of data and require infrastructure with high capacities and ample floor space to accommodate the equipment.

 

  • The rising number of startup businesses has fueled the demand for colocation data centers across Europe. SMEs cannot afford to build and operate data centers, which is why they depend on colocation data centers. Meanwhile, small enterprises do not require the set-up of extensive data center facilities. 

 

Key Companies & Market Share Insights

Several market players are focused on mergers and acquisitions, which has been one of the primary growth factors in Europe. Companies across the globe are investing in acquiring data centers in Europe to localize their presence. For instance, Iron Mountain, a U.S.-based colocation provider, completed the acquisition of Credit Suisse data center in London, which has helped the company to bolster its presence across the EMEA market. Furthermore, another U.S.-based company, Equinix, Inc., formed a joint venture with GIC Private Limited to develop and operate xScale data centers in Europe. Some of the prominent players operating in the Europe data center colocation market are:

  • Equinix, Inc.
  • Cyxtera Technologies, Inc.
  • Interxion
  • CyrusOne, Inc.
  • NTT Limited
  • Global Switch
  • Verne Global

 

Order a free sample PDF of the Europe Data Center Colocation Market Intelligence Study, published by Grand View Research.

 

About Grand View Research

Grand View Research, U.S.-based market research and consulting company, provides syndicated as well as customized research reports and consulting services. Registered in California and headquartered in San Francisco, the company comprises over 425 analysts and consultants, adding more than 1200 market research reports to its vast database each year. These reports offer in-depth analysis on 46 industries across 25 major countries worldwide. With the help of an interactive market intelligence platform, Grand View Research Helps Fortune 500 companies and renowned academic institutes understand the global and regional business environment and gauge the opportunities that lie ahead.

 

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