Europe Data Center Colocation Market Growth & Trends

The Europe data center colocation market size is anticipated to reach USD 48.6 billion by 2030, growing at a CAGR of 15.3% from 2023 to 2030, according to a recent study by Grand View Research, Inc. A need for floor space, growing data center infrastructure costs, and increasing power costs drive the market in the region. Enterprises are opting for colocation data centers owing to better service and for colocation data centers near the user. Further, colocation data center providers are also fulfilling space and power requirements while offering them the option to scale up their infrastructure as required.

The ongoing technological boom with the rollout of devices equipped with advanced technologies such as 5G, Internet of Things (IoT), Artificial Intelligence (AI), and Augmented Reality (AR) is expected to drive the market growth further. Considering that these technologies require improved network connectivity and reduced latency, the interconnectivity across Europe will also rise, presenting an excellent opportunity for colocation providers to localize their services. The colocation market in Europe is further expected to gain traction amid the COVID-19 pandemic. With several organizations adopting the work-from-home policy, enterprises are moving toward multi-tenant data centers to increase user proximity. Lockdowns imposed across numerous countries have led to a surge in the use of OTT services, which is also expected to fuel the demand for colocation facilities in Europe.

Several colocation data center operators are majorly relying on small cell installations for improving network coverage. Similarly, mobile operators are also anticipated to rely on small cells to increase data network capacity in traffic-congested areas. The small cell technology adds radios per subscriber and extends users’ enhanced signal quality requisite for effective data transfer. The proximity between radio sites addresses the short signal reach issue of higher frequency 5G technology. Subsequently, small cells are becoming the go-to solutions for mobile operators to expand the data capacity of the network. The increasing data traffic and associated need for expanding network capacity are anticipated to drive industry growth over the coming years.

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Europe Data Center Colocation Market Report

Europe Data Center Colocation Market Report Highlights

• Regarding colocation type, the retail colocation segment held the largest market share in the region in 2022. SMEs’ increasing deployment of retail colocation is responsible mainly for segment growth in the market. Retail colocation offers servers, racks, power, cooling, and space, among others, making it an affordable option for small enterprises
• Regarding end use, the IT and telecom segment dominated the market with the largest revenue share in the region in 2022. This is attributed to the increasing telecom network with the rollout of 5G and new application development for smart devices
• The small and medium enterprise segment is expected to witness the highest CAGR over the forecast period in the regional market owing to the increasing number of startup businesses adopting colocation services across the region
• The Nordic region is projected to grow more than 15% over the forecast period. This growing number of enterprises using cloud computing across Nordic countries, which is the highest across Europe, has been driving the growth of the Nordic region in the regional market. Additionally, the region has a higher proportion of ICT specialists relative to its population compared to other EU countries