Europe Data Center - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2024 - 2029)

The Europe Data Center Market size is estimated at 12.23 thousand MW in 2024, and is expected to reach 17.93 thousand MW by 2029, growing at a CAGR of 7.96%. Further, the market is expected to generate colocation revenue of USD 35.46 billion in 2024 and is projected to reach USD 58.31 billion by 2029, growing at a CAGR of 10.46% during the forecast period (2024-2029).

Tier 3 data center accounted for majority share in terms of volume in 2023, and is expected to dominate through out the forecasted period

• The tier 3 segment currently has a majority of share in the European region due to the major advantage of its features. These tiers have a high redundancy level and multiple paths for power and cooling. These data centers have an uptime of around 99.982%, translating into a downtime of 1.6 hours per year. The increasing adoption of edge and cloud connectivity is expected to boost the segment's growth.
• The United Kingdom hosts the maximum number of tier 3 data centers in the country, with Slough and Greater London holding a major share. The other major locations are France, Germany, Ireland, and other countries. Dublin is the only region that hosts more than 98% of the tier 3 data center facilities in Ireland, with North and South Dublin holding a major share. The tier 3 segment is expected to grow from 7,979.69 MW in 2023 to 12,110.18 MW in 2029, with a CAGR of 7.20%.
• The tier 4 segment is expected to record the highest CAGR of 15.51% during the forecast period. Various developed countries are focusing on adopting Tier 4 certifications to get the advantage of complete fault tolerance and redundancy for every component. Thus, even the developing regions are adopting the tier 4 zone. For instance, the tier 2 metro markets, outside the traditional FLAP markets, are set to see the fastest capacity growth from a low initial starting point. In particular, the Barcelona, Milan, and Rome metro markets are expected to triple the amount of data center power over the next four years.
• Tier 1 & 2 types showcase the least majority growth as more than 70% of all traffic today moves from server to server. Modern applications require significantly more data to travel within a data center at faster speeds and are more particular about latency.

Adoption of digitization in FLAP-D metro markets (including Frankfurt, London/Slough, Amsterdam, Paris, and Dublin) increases the market demand

• The largest data center markets are covered by FLAP-D metro markets (including Frankfurt, London/Slough, Amsterdam, Paris, and Dublin). With the increasing adoption of digital services and power management, these countries are expanding their colocation facilities. In August 2022, the Greater London Authority announced plans to change the application process for data center development to tackle and ease the West London power crisis with better electricity management regulations.
• The land price in London is around USD 150 per sq. ft. The higher land cost in London is expected to shift investments to other cities in the industry with lower land prices. For instance, Amsterdam has a lower land price for building facilities in the FLAP-D data center market, which is USD 38 per sq. ft. The Spanish market has many third-party DC projects under construction, with facilities being developed in Madrid and Barcelona.
• In terms of renewable energy, in the FLAP-D market, renewable energy is majorly produced from solar, wind, hydroelectricity, marine and wave energy, and bioenergy. For instance, in April 2022, the French government announced a strategy for renewable energy innovation projects as per its 2030 national investment plan, with an investment of over USD 1 billion.
• As the FLAP-D data center hubs observe a lack of land availability and skilled workforce, they are under threat from emerging regions. Countries like Italy, Poland, Belgium, and Sweden are expected to showcase growth in the future. Sweden's data center market is one of the most connected locations in the Nordic region regarding subsea cable connectivity. The country has adopted the district heating concept for data centers.

Europe Data Center Market Trends

Increasing usage of OTT subscriptions and mobile gaming along with social media penetration increases the data center market

• By 2025, smartphones are expected to account for nearly 85% of connections in Europe. Western Europe is home to some of the world’s biggest consumers of mobile data, while Central and Eastern Europe lag behind the global average. In 2021, in Western European, the traffic from mobile devices reached 4,189,615 terabytes per month. The growing average data volume due to rising OTT subscriptions for smartphones and mobile gaming is further driving the demand for data processing and storage facilities for live-streaming games and video content. The Danish market saw an 11.8% growth in total consumer spending on video in 2021 compared to 2020. The Danish video market represented a value of more than DKK 4.59 billion (EUR 607.8 million) in 2021.
• The ongoing trend of OTT services is increasing data traffic per smartphone in European countries. For instance, in Denmark, OTT subscriptions reached 2.1 million in 2016 to 5.7 million in 2021. The number of social media users in Switzerland was 7.54 million, increasing by 440,000 between 2021 and 2022, indicating a 6.2% growth. Factors such as increased data consumption, time spent on smartphones, and growth of digitalization across all end users are leading to the rise in data traffic per smartphone.
• A major increase in data consumption was observed in 2021 after the COVID-19 pandemic, with more users switching to smartphones due to the remote working culture in the region. The data exchanged through the internet exchange operator, DE-CIX, reported an increase in data throughput from 32 exabytes in 2020 to more than 38 exabytes in 2021. Such statistics suggest the significant growth of data traffic per smartphone in the region.

Increasing spending by European users on the App Store and Google Play along with cashless transactions increases the Data Center demand

• In 2021, mobile technologies and services generated around 4.6% of the GDP in Europe, a contribution that amounted to more than EUR 745 billion of the economic value. The average lifespan of a smartphone in Europe is three years, with annual sales of almost 211 million units.
• In Europe, 474 million individuals were subscribers to mobile services in 2021. By 2025, this number is projected to increase to 480 million. Over two-thirds of regional operators have built 5G networks, and most European nations have implemented commercial 5G services. There may be 311 million 5G connections in Europe by 2025, representing a 44% adoption rate. The year 2021 witnessed USD 18.3 billion in spending by European users on the App Store and Google Play. Based on customer spending for in-app purchases, subscriptions, and premium apps, this prediction represented a 22.8% rise in yearly gross income from 2020. European spending accounted for approximately 14% of global mobile app revenue in 2021, which reached USD 131.6 billion.
• The internet penetration in Switzerland increased from 89% in 2016 to 96% in 2021, while at the same time, the number of smartphone users increased from 6.9 million in 2016 to 7.9 million in 2021. Owing to such extensive use, digital payment services were promoted, and their application increased due to the COVID-19 pandemic. More people in Switzerland are using cashless transactions. Only 35% of Swiss citizens still prefer cash as a form of payment, indicating that people are increasingly choosing cashless transactions, while the rest favor using a card or an app to pay. Such factors indicate the rising use of smartphones in the European market, resulting in a constant increase in data and necessitating a growing amount of storage space.

Europe Data Center Industry Overview

The Europe Data Center Market is fragmented, with the top five companies occupying 26.68%. The major players in this market are Digital Realty Trust Inc., Equinix Inc., NTT Ltd, SOCIETE FRANCAISE DU RADIOTELEPHONE - SFR and Virtus Data Centres Properties Ltd (STT GDC) (sorted alphabetically).

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