European Data Center Market Outlook and Forecast 2020-2025

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Apr 14, 2020, 15:15 ET

DUBLIN, April 14, 2020 /PRNewswire/ -- The "Data Center Market in Europe - Industry Outlook and Forecast 2020-2025" report has been added to ResearchAndMarkets.com's offering.

COVID-19 is going to affect the data center market in Europe. A detailed analysis is included in the report.

The report considers the present scenario of the Europe data center market during the forecast period and its market dynamics for the forecast period 2020-2025. It covers a detailed overview of several market growth enablers, restraints, and trends. The report profiles and examines leading companies and several other prominent companies operating in the market.

The Europe data center market by investment is expected to grow at a CAGR of over 1% during the period 2019-2025.

The data center market in Europe has witnessed a significant boost due to the implementation of the general data protection regulations (GDPR) in May 2018. The adoption of GDPR has prompted several cloud service providers to establish data centers in Europe. AWS opened its cloud region in Sweden (2018). Microsoft opened its cloud region in Switzerland (2018), Germany (2019), and is planning to open a cloud region in Norway (2020).

Microsoft is also expanding its presence with the construction of data center buildings in the Netherlands. Apart from investing in data centers across the Netherland, Belgium, and Ireland, Google has announced to open a cloud region in Frankfurt, Germany, in 2020. Hence, the implementation of data protection and privacy policies in Europe is expected to contribute to the global data center market growth.

Another major factor driving the growth is increased investment by colocation service providers in the Europe colocation market. In Western Europe, Germany, the UK, and the Netherlands continue to witness high investments, with Ireland's contribution likely to grow significantly in the next few years. In terms of colocation investments, Sweden dominates the market, followed by Norway. Therefore, the increased investment in the expansion and construction of data center projects across Europe is influencing the market.

The following factors are expected to contribute to the growth of the Europe data center market during the forecast period:

Increase in Procurement of Renewable Energy
District Heating Concept to Gain Traction Across Europe
Increased use of Lithium-ion Batteries & Fuel Cells in Data Centers
5G Installation increasing Edge Data Centers Deployment
Increased Tax Incentives aiding Data Center Investments

Europe Data Center Market Segmentation

This research report includes a detailed segmentation by IT infrastructure, electrical infrastructure, mechanical infrastructure, general construction, tier standards, and geography.

The IT spend in Europe is growing significantly YOY with Western Europe and the Nordic region contributing to maximum share. The demand for servers is expected to grow during the forecast as service providers expand their presence globally. Cloud servers are likely to a popular choice among enterprises due to the growing demand for cloud platforms in the region. In terms of storage, enterprises have shown increased interest in the procurement of all-flash storage infrastructure. The adoption of NVMe flash storage in Germany is the highest in the region. In terms of networking, the region is mainly dominated by Ethernet switches, especially 25/40/100 switch ports. However, the adoption of 200/400 GbE ports will have a significant impact on data center interconnection solutions.

The growing adoption of cloud computing services in Nordic leads to an increased number of IT infrastructure components. Finland, Sweden, and Denmark are the leading contributors to cloud adoption with a minimum of 50% of enterprises opting for cloud computing services. The increased construction of facilities in the region is likely to be the major boost for the IT infrastructure segment and related sub-segments. Besides, the growing investment in data centers and the implementation of GDPR are fueling the growth of the server market over the past two years.

The European market has a strong potential for UPS systems due to the increasing greenfield construction, especially greater than 10 MW. The market is expected to witness high adoption of scalable UPS solutions. The UK, Germany, the Netherlands, France, and Ireland are the major power infrastructure revenue contributors. Several facilities have adopted flexible designs to facilitate the installation of dual power feeds to the facility, 2N redundant UPS and PDU systems, and N+1 generator systems. The use of water-based cooling includes water-treatment plants and systems that can aid the consumption of water up to 20%. However, the major challenge in the region is the non-availability of skilled workforce to maintain data center infrastructure management. The hyperscale market growth is likely to fuel the procurement of 48V DC UPS systems. The facilities built in the Nordic region mostly procure >2 MW capacity generators. In Nordic, most facilities are powered through renewable energy sources with grid stability of over 95%, which reduces the procurement of redundant generator systems.

Several data centers in Western Europe support free cooling systems, which include adiabatic coolers, evaporative coolers, and free cooling chiller systems. The use of these systems will continue to grow among European countries because the region offers free cooling for a minimum of 5,000 hours per year. A few facilities also use chillers that facilitate cooling by using outside air and water-based cooling during summers. Most facilities in the Nordic region adopt free cooling techniques. The Nordic data center market facilitates free cooling for over 8,400 hours per year, and the use of free cooling systems will continue to add revenue during the forecast period. All Central and Eastern European countries support free cooling of over 6,000 hours annually. Many facilities have been equipped with in-direct evaporative/adiabatic coolers. A few facilities have also adopted water/glycol-based cooling systems along with highly efficient DX-based CRAC systems to cool facilities.

Western Europe is the most prominent data center construction market in Europe. Many facilities are designed and built to cover an area of over 100,000 square feet. The demand for data centers has increased revenue opportunities for multiple contractors and sub-contractors. Most enterprise data center operations include the procurement of modular infrastructure solutions from local service providers, thereby increasing the growth of the modular data center market. Jones Engineering, ISG, Red-Engineering, Kirby Group, and Mercury Engineering are key players providing construction services in the UK. In terms of physical security, several facilities are constructed with multi-level security. There is a growing demand for IP video surveillance systems in the market. Service providers are securing their facilities with 3-meter-high secure perimeter fencing with extensive CCTV control, vehicle lock to the site entrance, and biometric readers in data halls with 24/7-year on-site security. The growing hyperscale data center market will be a major boost to contractors and sub-contractors operating in the market. Most of these projects are built in collaboration with global data center construction contractors and sub-contractors.

Data center facilities are increasingly certified as Tier III by the Uptime Institute due to their high standard design and construction. Tie IV facilities are seen in Norway, the Netherland, Denmark, Ireland, Belgium, Italy, the Czech Republic, and Switzerland, which is contributing toward hyperscale investments. Tier IV data centers are equipped with at least 2N+1 redundancy in every infrastructure that makes the facility fault-tolerant, with some facilities having 2N+2 redundancy in few critical infrastructures such as UPS systems and PDUs. The contribution of hyperscale developers is aimed at making facilities that are fully fault-tolerant to provide customers with satisfaction while connecting with cloud-based services in the region.

Insights by Geography

TThe implementation of GDPR has been a strong driver for the growth of data center market in Western Europe. Hyperscale operators are involved in the rapid expansion of the cloud platform across Western Europe. The market will witness the continuous adoption of cloud services among SMEs, with the increased interest shown toward the digital transformation of businesses by adopting solutions such as IoT, big data, and artificial intelligence. The demand for smart devices, coupled with growing internet penetration, will fuel the growth of data centers and corresponding infrastructure in the region.

The market in Nordic is a matured market with hyperscale operators and cloud service providers as a major contributor in terms of investment. Denmark received the highest investment from hyperscale operator (Facebook) and colocation service providers such as Digiplex, GlobalConnect, and Interxion. The data center market is dominated by Russia & Czech Republic, Austria, Poland, and Serbia. Colocation service providers are major investors. The Central European government is accelerating the adoption of cloud services and moving toward e-governance. In the Central and Eastern Europe data center market, Poland is in the process of developing e-governance, which aims to bring government services and information together on a single platform. Central and East Europe is fast emerging as a center of gaming developers and software development houses, with several companies emerging as the fastest-growing ones in the region.

Key Vendor Analysis

By IT infrastructure, the adoption of ODM-based infrastructure solutions is gaining traction among enterprise operators in the European region. The deployment of OCP-ready data centers by colocation operators has aided in this growth. In terms of electrical infrastructure, Eaton, Schneider Electric, Legrand, Vertiv, ABB, and Socomec have a strong presence in the market.

Prominent Data Center Critical (IT) Infrastructure Providers

Arista
Atos
Broadcom
Cisco
Dell Technologies
Extreme Networks
Hewlett Packard Enterprises (HPE)
Hitachi Vantara
Huawei
IBM
Inspur Group
Inventec
Juniper
Lenovo
NEC
NetApp
Oracle
Pure Storage
Quanta Cloud Technology
Super Micro Computer
Wistron (Wiwynn)

Prominent Data Center Investors

3data
Apple
Aruba S.P.A
AWS (Amazon Web Services)
Bahnhof
Bulk Infrastructure
Colt Data Centre Services (CCS)
CyrusOne
Digiplex
Digital Realty
Equinix
Facebook
Global Switch
Google
Interxion
Microsoft
Multigrid
NDC Data Centers
NTT Communications
Scaleway Data Center
STT GDC

Prominent Construction Services Providers

AECOM
Arup Group
Bouygues
Cap Ingelec
DPR Construction
Etix Everywhere
Flex Enclosure
Future-tech
ISG
Jones Engineering
Kirby Group Engineering
KMCS
Linesight
LUPP Group
Mace Group
Mercury Engineering
M+W Group
NCC
Red Engineering
Skanska
SISK Group
Structure Tone
Winthrop

Prominent Infrastructure Providers

ABB
Airedale Air Conditioning
Alfa Laval
Asetek
Bosch Security Systems
Caterpillar
Cummins
Delta Group
Eaton
KINOLT (Euro-Diesel)
Hitech Power Protection
KOHLER (SDMO)
Legrand
Nlyte Software
Piller Power Systems
Riello UPS
Rittal
MTU On Site Energy (Rolls-Royce Power Systems AG)
Schneider Electric
Socomec Group
STULZ
Trane (Ingersoll Rand)
Vertiv

For more information about this report visit https://www.researchandmarkets.com/r/vfs4qp

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