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Germany Data Center Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

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  • 186 Pages
  • November 2023
  • Region: Germany
  • Mordor Intelligence
  • ID: 5239591
The Germany Data Center Market size is estimated at USD 6.19 billion in 2023, and is expected to reach USD 7.70 billion by 2028, growing at a CAGR of 4.45% during the forecast period (2023-2028).

The increasing demand for data processing in Germany demands improved and advanced data infrastructure, creating demand for data centers. With the onset of the COVID-19 pandemic, the allied programs have been focusing on digitizing education, healthcare, cybersecurity, agribusiness, public safety, and manufacturing in connection with industry, academic, and public sector partners to promote economic growth and skills development.

Key Highlights

  • In Germany, data processing follows strict European data protection regulations. The data center regularly performs backups following applicable legal provisions and precise customer requirements to prevent data losses. The Federal data protection act that governs the exposure of personal data in Germany is the German Bundesdatenschutzgesetz (BDSG). The new German Privacy Act (BDSG-new) has been updated since the GDPR, complements, specifies, and modifies the GDPR.
  • Berlin, Hamburg, and Frankfurt are some of Germany's most attractive investment locales due to the growing demand for colocation space from operators such as Colt DCS, which maintains data centers in those cities. For instance, in May 2022, Alibaba Cloud constructed a data center in Germany specifically made for AI and machine learning applications. The new facility, which is situated in Frankfurt, is expected to provide services to clients in the manufacturing, retail, and automotive sectors.
  • Major global public cloud providers such as Amazon Web Services (AWS), Microsoft Azure, and Google are active in Germany. They plan on investing in newer data center facilities or using third-party data centers for their expansion plans. In September 2021, Google announced its plans to expand its operations in Germany with EUR 1 billion (USD 1.18 billion) worth of investments in new data centers in the country, with data centers in Frankfurt and the new Cloud region in Berlin. The new Hanau Frankfurt facility is expected to be operational in 2022.
  • However, Germany has been among the most complicated and expensive countries to import IT hardware. The primary reason for the same has been attributed to tax rules which rely on protectionism and bureaucracy in the customs clearance process. Distributing data across an extensive network containing numerous devices and data centers operating from enterprise locations can create network visibility and control problems, with each device representing another potential endpoint, especially in the IoT network framework.
  • Moreover, since the COVID-19 pandemic's onset and the trade patterns through 2021, the demand for data centers has seen a positive rise, augmented by technology demand growth due to shutdowns. Companies upgrading IT infrastructures to support remote working amid shutdowns may shift workloads to the public and private cloud. Datacenter operations and investments were least affected by the pandemic, signifying their critical role in supporting ongoing business activity. Over the coming years, this is expected to drive the demand further as enterprises move towards cloud and remote working models.

Germany Data Center Market Trends

Tier 3 is the largest Tier Type

  • The tier 4 segment leads the German data center market based on tier capacity. The segment's capacity is expected to grow from 524.3 MW in 2023 to 1112.5 MW by 2029, with a CAGR of 13.4%. With evolving technology, the German population is increasingly adopting various internet devices such as desktops, tablets, smartphones, consoles, and smart gear for streaming content, home security, online gaming, and other services.
  • This trend has led to a shift from traditional desktops or laptops to a range of new devices. Initially, data centers were meant to cater to the minimal requirements of clients. Thus, they were small in size and had Tier 1 & 2 certifications and minimum racks.
  • With the growing adoption of new devices and the implementation of a 5G network to provide the necessary speeds to use these devices at the fullest potential, companies are shifting toward facilities that offer uninterrupted computing services. Therefore, the market share of tier 4 facilities is expected to increase from 34% in 2023 to 47.2% in 2029.
  • The number of people living in smart cities accounts for around 76%, which is expected to increase further. For instance, smart cities such as Weimar have transitioned their street lighting from traditional bulbs to smart LEDs due to rising energy prices. Around 83% of the lighting has been replaced with the smart lighting system, thus helping save energy of 100,000 kWh and reduce lighting expenses. Such infrastructural developments are supported by tier 3 and 4 facilities with minimal downtimes, thus complementing the growth of these segments in the market.

Germany Data Center Industry Overview

The Germany Data Center Market is fairly consolidated, with the top five companies occupying 73.75%. The major players in this market are Digital Realty Trust, Inc., Equinix, Inc., Leaseweb Global B.V., NTT Ltd. and Vantage Data Centers, LLC (sorted alphabetically).

Additional Benefits:

  • The market estimate (ME) sheet in Excel format
  • 3 months of analyst support

Table of Contents

3.1 Study Assumptions & Market Definition
3.2 Scope of the Study
3.3 Research Methodology
4.1 IT Load Capacity
4.2 Raised Floor Space
4.3 Colocation Revenue
4.4 Installed Racks
4.5 Rack Space Utilization
4.6 Submarine Cable
5.1 Smartphone Users
5.2 Data Traffic Per Smartphone
5.3 Mobile Data Speed
5.4 Broadband Data Speed
5.5 Fiber Connectivity Network
5.6 Regulatory Framework
5.7 Value Chain & Distribution Channel Analysis
6.1 Hotspot
6.1.1 Frankfurt
6.1.2 Rest of Germany
6.2 Data Center Size
6.2.1 Large
6.2.2 Massive
6.2.3 Medium
6.2.4 Mega
6.2.5 Small
6.3 Tier Type
6.3.1 Tier 1 and 2
6.3.2 Tier 3
6.3.3 Tier 4
6.4 Absorption
6.4.1 Non-Utilized
6.4.2 Utilized By Colocation Type Hyperscale Retail Wholesale By End User BFSI Cloud E-Commerce Government Manufacturing Media & Entertainment Telecom Other End User
7.1 Market Share Analysis
7.2 Company Landscape
7.3 Company Profiles
7.3.1 CyrusOne Inc.
7.3.2 Digital Realty Trust, Inc.
7.3.3 Equinix, Inc.
7.3.4 Global Switch Holdings Limited
7.3.5 GlobalConnect AB
7.3.6 Iron Mountain Incorporated
7.3.7 Leaseweb Global B.V.
7.3.8 Lumen Technologies, Inc.
7.3.9 Noris Network AG
7.3.10 NTT Ltd.
7.3.11 Telehouse (KDDI Corporation)
7.3.12 Vantage Data Centers, LLC
9.1 Global Overview
9.1.1 Overview
9.1.2 Porter's Five Forces Framework
9.1.3 Global Value Chain Analysis
9.1.4 Global Market Size and DROs
9.2 Sources & References
9.3 List of Tables & Figures
9.4 Primary Insights
9.5 Data Pack
9.6 Glossary of Terms

Companies Mentioned (Partial List)

A selection of companies mentioned in this report includes, but is not limited to:

  • CyrusOne Inc.
  • Digital Realty Trust, Inc.
  • Equinix, Inc.
  • Global Switch Holdings Limited
  • GlobalConnect AB
  • Iron Mountain Incorporated
  • Leaseweb Global B.V.
  • Lumen Technologies, Inc.
  • Noris Network AG
  • NTT Ltd.
  • Telehouse (KDDI Corporation)
  • Vantage Data Centers, LLC