Colocation Facilities in the UK - Industry Market Research Report

Stored up: Businesses increasingly turn to colocation facilities to save money on handling their own data storage

Over the five years through 2023-24, colocation facility revenue is expected to grow at a compound annual rate of 4.8% to reach £2.7 billion, including forecast growth of 2.1% in 2023-24. Colocation facility providers are specialised either in the provision of retail or wholesale services. They primarily cater for the downstream manufacturing and financial services sectors. The Colocation Facilities Industry has benefited from the significant growth of information generation by the digital economy, supporting demand. Heavy expansionary activities have aided revenue growth in recent years, with colocation facility providers getting hold of more data centres to satisfy demand, especially when it picked up on the back of the COVID-19 outbreak. However, despite increases in operational efficiency, hefty rises in energy costs since COVID-19 hit have weighed on profitability. Supply chain disruptions have exacerbated cost rises, causing shortages in key components. These disruptions have shown signs of easing in 2023-24, lifting the average industry profit margin.

Companies in this industry own and operate data centres that primarily lease equipment space to customers. They also offer auxiliary services including power management, security and network neutrality. Customers generally use industry services as off-site data storage to back up their data or to enable them to focus on other parts of their business.

This report covers the scope, size, disposition and growth of the industry including the key sensitivities and success factors. Also included are five year industry forecasts, growth rates and an analysis of the industry key players and their market shares.