The Europe Data Center Colocation Market size is anticipated to reach USD 33.66 billion by 2028, recording a CAGR of 13.1%, over the forecast period, according to a study conducted by Grand View Research, Inc. The market is driven by the factors such as the rising costs of data center infrastructure, lack of floor space, and rising power costs. Enterprises are inclined toward colocation data centers as it enables them to place their infrastructure in proximity to their users and provide better services. Additionally, colocation data centers also fulfill their power and space requirements while offering them the option to scale up their infrastructure as per the requirement.
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 further drive the market growth. Considering that these technologies would 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. According to Equinix Inc.’s interconnection network index, the interconnection bandwidth across Europe is expected to reach 3,872 Tbps by 2023 from 1,182 Tbps in 2020.
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 proximity to users. 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.
Related Press Release@ Europe Data Center Colocation Market Report
Europe Data Center Colocation Market Report Highlights
- In terms of colocation type, the retail colocation segment held the largest market share in 2020. The increasing deployment of retail colocation by SMEs is largely responsible for segment growth. Retail colocation offers racks, servers, space, power, and cooling, among other solutions, making it an affordable option for SMEs
- In terms of end use, the IT and telecom segment dominated the market with the largest revenue share in 2020. 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 register the highest CAGR over the forecast period owing to the increasing number of startup businesses adopting colocation services across the region
- The Nordic region is expected to witness a surge in investments from cloud service providers. This is due to the growing number of enterprises using cloud computing across Nordic countries, which is the highest across entire Europe. Additionally, the region has a higher proportion of ICT specialists, relative to its population compared to other EU countries