Data Center Market in Europe - Industry Outlook and Forecast 2021-2026
In-depth Analysis and Data-driven Insights on the Impact of COVID-19 Included in this Europe Data Center Market Report
The Europe data center market by investment is expected to grow at a CAGR of over 4% during the period 2021–2026.
The market is expected to grow due to the growing procurement of renewable energy sources. Over 25 European cloud and data center operators, including AWS, Google, Equinix, Interxion, OVH Cloud, Scaleway, Aruba, and 17 other industry associations have signed an agreement to make their facilities carbon neutral via 100% renewable energy sources by 2030. According to the Climate Neutral Data Centre Pact, 75% of the power supplied to data centers in Europe will be supplied through renewable energy or carbon-free energy by December 31, 2025, and the objective is to reach 100% by December 31, 2030. This announcement is likely to offer a high impetus to the growth of the data center market in Europe. Hyperscale data center providers are the major investors in renewable energy initiatives. Germany intends renewable resources to constitute at least 35% of the gross electricity consumption. Ireland aimed to generate 16% of its energy through renewable energy sources in 2020, which is expected to reach 55% by 2030. Norway is the leading country in the production of renewable energy sources, followed by Sweden and Finland. Iceland continues to produce 100% of electricity through renewable sources.
The following factors are likely to contribute to the growth of the Europe data center market during the forecast period:
- Procurement of Renewable Energy Sources
- Introduction of Innovative UPS Battery Technology
- Adoption of District Heating by Data Centers
- Cloud Adoption driving Data Center Market
The study considers the present scenario of the Europe data center market and its market dynamics for the period 2020−2026. It covers a detailed overview of several market growth enablers, restraints, and trends. The report offers both the demand and supply aspects of the market. It profiles and examines leading companies and other prominent ones operating in the market.
Europe Data Center Market Segmentation
The Europe data center market research report includes a detailed segmentation by IT infrastructure, electrical infrastructure, mechanical infrastructure, cooling technique, general construction, tier standards, geography. Enterprises are shifting to high-performance and capacity-intensive infrastructure. The high consumption of internet-based services is expected to drive the IT infrastructure market. The COVID-19 pandemic fueled infrastructure adoption among internet-related service providers in Q1 and Q2 2020. Hyperscale operators procured ODM infrastructure, which grew by over 10% across Europe in 2020. UPS systems are the highest contributors to market investment. In 2020, the adoption of lithium-ion UPS systems grew considerably. Most data centers operating in Europe are adopting N+N redundant infrastructure. The adoption of generator systems with a capacity of over 2 MW is high due to the increased construction of large and hyperscale facilities. Data center operators have adopted innovative and energy-efficient cooling infrastructure solutions, aiming to reduce power consumption by up to 50%. This is expected to grow during the forecast period as market vendors are introducing innovative high-efficient cooling systems.
The server infrastructure market has witnessed strong growth over the last two years. Server systems based on x86 architecture dominated the Europe data center market share with over 85% in 2020. Most modern operators adopt the server infrastructure that matches workload requirements. The demand for servers suitable for cloud environments is likely to grow during the forecast period. In 2020, the increased adoption of all-flash storage arrays along with sizable contribution from hybrid storage arrays is expected to aid storage systems. The growth of flash storage systems is boosted by high-performance operations that require strong input/output capabilities. The increase in bandwidth requirements, data center consolidation, and virtualization are some major factors driving the demand for ethernet port switches, controllers, and adaptors. 25/50 GbE switches are likely to experience considerable growth during the forecast period.
Several facilities have adopted flexible designs to facilitate the installation of dual power feeds, 2N redundant UPS and PDU systems, and N+1 generators. The market share of metered and monitored rack PDU solutions has observed a remarkable increase in Western Europe. In the Nordic region, the deployment of hyperscale facilities is likely to fuel the procurement of 48V DC UPS systems. Most facilities in the region are powered by renewable energy with grid stability of over 95%. This reduces the number of redundant generator systems, encouraging 2N UPS system installation. A majority of data centers in central and eastern Europe are designed as Tier III standards with a minimum of N+1 redundancy in UPS and generator systems. The use of renewable energy sources to power data centers is low in the region. However, their utilization is expected to grow during the forecast period.
Several data centers in Western Europe support free cooling systems, which include adiabatic coolers, evaporative coolers, and free cooling chiller systems. The use of water-based cooling techniques includes water-treatment plants and systems. Most data center operators procure 45U–52U rack cabinets. However, the procurement of 42U racks is declining in the Europe data center market.
Western Europe is the most active market for data center construction across the European region. The increase in demand for cloud computing and other related services has offered several revenue opportunities for multiple and sub-contractors in the market. Many facilities are being designed and built to cover an area of over 100,000 square feet. Several major data center construction in the region is managed by Europe-based construction service providers. However, the non-availability of a skilled workforce to manage multiple hyperscale projects is the major challenge for several contractors in the region.
According to the Uptime Institute, Europe has around 217 certified data centers spread over 29 countries, which include local and global facilities. A majority of them are in the UK, Russia, Spain, Lithuania, Luxembourg, Italy, and France. Europe has higher Tier III certified facilities than Tier IV and Tier II. Around 163 facilities in Europe are Tier III certified. Russia, the UK, Spain, Italy, and Lithuania have the highest number of certified data centers.
By IT Infrastructure
By Electrical Infrastructure
- UPS Systems
- Transfer Switches and Switchgears
- Other Electrical Infrastructures
By Mechanical Infrastructure
- Cooling Systems
- CRAC & CRAH Units
- Chiller Units
- Cooling Towers, Dry Coolers, & Condensers
- Economizers & Evaporative Coolers
- Other Cooling Units
- Others Mechanical Infrastructure
By Cooling Technique
- Air-based Cooling Technique
- Liquid-based Cooling Technique
By General Construction
- Core and Shell Development
- Installation and Commissioning Services
- Engineering and Building Designs
- Physical Security
By Tier Standards
- Tier I &II
- Tier III
- Tier IV
INSIGHTS BY GEOGRAPHY
In 2020, Western Europe witnessed investments in 80 projects, out of which 20 projects became operational in Q3 2020. However, the remaining projects are still under development and are expected to be functional by Q2 2021. The demand for smart devices, coupled with growing internet penetration, is likely to fuel the growth of data centers and other related infrastructure in the region. Data centers in Western Europe are built to support OCP rack infrastructure solutions. The UK, the Netherlands, Germany, and France are the leading destinations, while Belgium, Ireland, Italy, and Switzerland are the emerging markets.
Finland & Iceland
- Central and Eastern Europe
Russia and the Czech Republic
Poland & Austria
INSIGHTS BY VENDORS
The Europe data center market consists of several IT, electrical, and mechanical infrastructure providers. Arista Networks, Atos, Broadcom, Cisco Systems, Dell Technologies, and Extreme Networks some major IT infrastructure providers. With the increasing demand for high-density, mission-critical servers, storage, and network infrastructure, the IT infrastructure market is likely to witness growth. The server market has witnessed significant growth in revenue contribution from ODM server manufacturers. The electrical infrastructure market has become highly competitive owing to the increased interest shown by operators in procuring energy-efficient infrastructure solutions. ABB, Eaton, Schneider Electric, and Vertiv are the major power infrastructure players.
Key Data Center Critical (IT) Infrastructure Providers
- Arista Networks
- Cisco Systems
- Dell Technologies
- Extreme Networks
- Huawei Technologies
- Hewlett Packard Enterprise (HPE)
- Hitachi Vantara
- Juniper Networks
- MiTAC Holdings
- NEC Corporation
- Pure Storage
- Quanta Computer (Quanta Cloud Technology)
- Super Micro Computer
- Wistron (Wiwynn)
Key Data Center Support Infrastructure Providers
- Airedale International Air Conditioning
- Alfa Laval
- Assa Abloy
- Bosch Security Systems (Robert Bosch)
- Delta Electronics
- HITEC Power Protection
- Mitsubishi Electric Corporation
- Nlyte Software
- Piller Power Systems
- Rolls-Royce Power Systems
- Riello Elettronica (Riello UPS)
- Schneider Electric
- Trane Technologies (Ingersoll Rand)
- Vertiv Group
Key Data Center Contractors
- Arup Group
- Bouygues Construction
- DPR Construction
- Fluor Corporation
- HDR Architecture
- Jones Engineering Group
- Kirby Group Engineering
- Mercury Engineering
- Mace Group
- M+W Group (Exyte)
- Metnor Construction
- Structure Tone
- Winthrop Engineering and Contracting
Key Data Center Investors
- Aruba SpA
- Colt Data Center Services (Colt DCS)
- Digital Realty
- DATA4 Smart Data Centers
- Echelon Data Centers
- Global Switch
- Green Mountain
- Iron Mountain (IO)
- NTT Global Data Centers
- QTS Realty Trust
- VIRTUS Data Centres
- Telecom Italia Sparkle
- T5 Data Centers
- Vantage Data Centers
KEY QUESTIONS ANSWERED
1. What is the European data center market size and growth rate during the forecast period?
2. What are major innovations in UPS battery technologies adopted by data center infrastructure providers?
3. How is the COVID-19 pandemic expected to affect the market growth during the forecast period?
4. What EU data center regulations are likely to increase aid the Europe data center market?
5. Which segment is expected to generate the highest revenue during the forecast period?