Enjoy complimentary customisation on priority with our Enterprise License!
The Western Europe data center colocation market is estimated to grow at a CAGR of 13.64% between 2022 and 2027. The market size is forecast to increase by USD 7,000.49 million. The growth of the market depends on several factors, including the rising demand for data center colocation facilities, an increase in business operational needs, and the growing number of mergers and acquisitions (M&A).
This data center colocation market report extensively covers market segmentation by Type (retail colocation and wholesale colocation), End-user (small, medium-sized enterprises, and large enterprises), and Geography (UK, Germany, France, the Netherlands, and Rest of Western Europe). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
To learn more about this report, View Report Sample
The rising demand for data center colocation facilities is notably driving market growth, although factors such as the focus on data center consolidation may impede market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The rising demand for data center colocation facilities is notably driving market growth. An enterprise operating a colocation facility offers more benefits compared to an enterprise building its own data center. Collocation significantly reduces the CAPEX on infrastructure and improves the connectivity required for operational services. The number of these facilities is rapidly growing year-over-year. Many enterprises build and operate their own cloud platforms. They also host these platforms using the managed services model. These enterprises can streamline the operations of their IT infrastructure to achieve better uptime and availability of resources. With the increase in the online presence of enterprises across different industry verticals, the adoption of managed hosting services will rise during the forecast period. Managed hosting service providers such as Rackspace are expanding their footprint worldwide, which is expected to continue during the forecast period. Local colocation and managed-to-host service providers help consumers get data center colocation facilities at affordable rates, which has led investors to invest in the data center colocation market in Western Europe, leading to the growth of the market during the forecast period.
Innovative approaches like submarine data centers is a key trend shaping market growth. Traditional data centers generate a lot of heat. Many service providers are trying to change the location of data centers to cooler countries to reduce the costs incurred on power and cooling systems. Cooling systems account for 30%-40% of the power consumed by data centers. Free cooling and liquid immersion cooling techniques are implemented by data center facilities to reduce power consumption. Many innovations are implemented by data center service providers to improve the efficiency of a facility. One such innovation is the submarine data center.
Microsoft offers a submarine data center and operates it several feet below sea level off the coast of Orkney, which is a group of islands in Scotland. This submarine data center consists of multiple racks of computers with a large number of servers. The data center can hold data and process information for up to five years without the need for maintenance. This submarine data center would help improve Internet speeds in areas that lack the required infrastructure and enable easy cooling with less investment in cooling devices and racks. Such innovative approaches will help reduce power consumption in data centers. SMEs and large enterprises will prefer submarine data centers, which help enterprises improve Internet speeds in areas that lack the required infrastructure. Therefore, submarine data centers may hinder the growth of the data center colocation market in Western Europe during the forecast period.
The focus on data center consolidation may impede the market growth. Many enterprises are focusing on reducing the size of data center facilities. Infrastructure-as-a-service (IaaS) is an important concept in which several companies utilize a consolidated data center. The significant adoption of IaaS has led to data center consolidation. The major reason for data center consolidation is to reduce operating costs. Several software companies are moving toward adopting a common cloud platform, which will reduce the need for individual data centers. Companies such as Box, Salesforce, and SAP have announced plans to utilize consolidation to make their software available to enterprises.
The increase in data center virtualization leads to the consolidation of data centers and reduces the total number of data centers. This hinders the sale of infrastructure and reduces the footprint of data centers in Western Europe. However, the consolidation of facilities requires expertise as well as time and also involves high risks. As data center consolidation increases, the market for data centers shrinks, thereby hindering the growth of the data center colocation market in Western Europe.
The market report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Data Center Colocation Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Colt Technology Services Group Ltd. - The company offers data center colocation solutions through Colt Data Center Services.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth by the retail colocation segment will be significant during the forecast period. Retail colocation is a type of data center colocation where many enterprises rent space and integrate their own IT equipment, such as servers and storage devices, within the racks provided by the colocation vendors. Retail colocation includes the process of renting racks, rack cages, and private suites in a large data center. Retail colocation facilities are rented by vendors for one to three years of the contract.
Get a glance at the market contribution of various segments View the PDF Sample
The retail colocation segment was valued at USD 2,183.18 million in 2017 and continued to grow until 2021. The market for retail colocation data centers is growing due to the increasing adoption of the data centers by SMEs, which usually opt for colocation to save on both CAPEX and operating expenditure (OPEX). The adoption of colocation facilities is growing due to the increase in CAPEX and OPEX for owning and maintaining in-house traditional data centers. There is a steady transition toward colocation data centers since companies will have total control over the IT infrastructure at affordable prices. This will propel the growth of the data center colocation market in western Europe. Moreover, the low cost of retail colocation data centers is another crucial factor driving the segment growth. The retail colocation cost is around USD 1,500 for a single rack on a rentable basis, and it is expected to decline as the demand and production will increase.
The increase in the adoption of cloud-based services among SMEs will lead these enterprises to opt for colocation facilities. These SMEs are expected to add significant amounts of revenue to the retail colocation segment. Retail colocation offerings include power infrastructure, cooling solutions, network bandwidth, and security up to the rack level. Based on their business requirements, SMEs will account for a greater contribution to the revenue of the retail colocation segment when compared with the wholesale colocation segment. Retail colocation vendors offer power infrastructure, cooling solutions, and security. Also, the widespread networking capability of colocation facilities will benefit the rapidly growing SMEs.
The data center colocation market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Technavio categorizes the data center colocation market in Western Europe as a part of the global data processing and outsourced services market within the global IT services market. The parent global IT services market covers companies offering IT consulting and system integration services, application services, electronic data processing services, business process outsourcing services, infrastructure services, and Internet services.
Data Center Colocation Market Scope in Western Europe |
|
Report Coverage |
Details |
Page number |
134 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 13.64% |
Market growth 2023-2027 |
USD 7,000.49 million |
Market structure |
Concentrated |
YoY growth 2022-2023(%) |
13.29 |
Regional analysis |
Western Europe |
Key countries |
UK, Germany, France, The Netherlands, and Rest of Western Europe |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
Colt Technology Services Group Ltd., CyrusOne Inc., Data4 Group, Digital Realty Trust Inc., Equinix Inc., iliad Group, Iron Mountain Inc., IXCELLERATE LLC, KDDI Corp., Lumen Technologies Inc., Pulsant Ltd., QTS Realty Trust LLC, Servecentric Ltd., and STT GDC Pte Ltd. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Get lifetime access to our
Technavio Insights
Cookie Policy
The Site uses cookies to record users' preferences in relation to the functionality of accessibility. We, our Affiliates, and our Vendors may store and access cookies on a device, and process personal data including unique identifiers sent by a device, to personalise content, tailor, and report on advertising and to analyse our traffic. By clicking “I’m fine with this”, you are allowing the use of these cookies. Please refer to the help guide of your browser for further information on cookies, including how to disable them. Review our Privacy & Cookie Notice.