Europe Data Center Construction Market Size
Study Period | 2024 - 2030 |
Base Year For Estimation | 2023 |
Forecast Data Period | 2024 - 2030 |
CAGR | 5.30 % |
Market Concentration | Medium |
Major Players*Disclaimer: Major Players sorted in no particular order |
Need a report that reflects how COVID-19 has impacted this market and its growth?
Europe Data Center Construction Market Analysis
The European Data Center Construction Market is projected to register a CAGR of 5.3% over the next five years. The market studied has been increasing, with new entrants and data centers being increasingly constructed in the region. The necessity for space and utilities has also expanded to unprecedented levels, with the expansion of businesses driving the need for more data centers in the area.
- The FLAP-D (Frankfurt, London, Amsterdam, Paris, and Dublin) regions have become significantly mature and face limitations related to physical spaces and insufficient energy to power these data centers. Such issues have driven the colocation providers to find new feasible locations, including Oslo, Berlin, Zurich, Milan, Warsaw, and Madrid. These areas are considered potential regions for data center construction across the region.
- Another factor boosting the growth of data centers in the region is the development of smart cities. For instance, The government of Germany plans to develop smart cities nationwide through its Smart City Model Projects Program, with EUR 1250 billion in funding. Due to such factors, data consumption is expected to increase proportionally, leading to a growing IT load in the coming years, expected to depend on data centers.
- Moreover, the existing data center operators are constantly searching for practical solutions to upgrade the data center infrastructure to support the colder climate conditions across Europe. Many establishments strongly favor free cooling chillers that provide partial cooling using outside air. However, depending on the facility design and IT load, the investment in advanced cooling systems for data center projects is anticipated to grow.
- There are many European standards and regulations for data centers; it's easy to see that non-compliance with the stringent rules and regulations involves more than just a single, easily understood consequence but hundreds of ramifications. On a legal front, a data provider that fails to meet the standards and keep up with compliance may be punishable by law, which could involve shutdowns, fines, and much more.
- The impact of the pandemic surged in remote schools and work, making business calls on Zoom instead of the phone and utilizing an app for everything across the European region. The fast growth of online activity raised the demand for data center white space, particularly in recent years, as the COVID-19 pandemic made access to internet applications. With more people relying on the Internet for work, social networking, e-commerce, banking, and entertainment, the demand for almost limitless uptime and storage capacity grew. Thus, driving the need for more Data Centers.
Europe Data Center Construction Market Trends
United Kingdom leads the market with significant market share
- The digital economy in the United Kingdom accounted for more than 7% of the country's GDP in 2022. This upward trend continues, following the work-from-home culture creating demand for enterprise cloud and Software-as-a-Service (SaaS) utilities, as well as e-commerce, social networking, search, streaming video services, gaming, and mobile apps.
- The adoption of OTT in the country is relatively high, and nearly 30.7% of TV households subscribed to an SVOD package in 2021. YouTube and Facebook were the most prominent social video platforms in the United Kingdom, reaching over 95% of UK internet users in 2021. Therefore, the construction of data centers in the United Kingdom is expected to grow in the coming years. However, power supply availability and sustainability are a big challenge for all data center providers across the United Kingdom.
- Moreover, a higher land cost in London (around USD 150 per sq. ft) is expected to shift investments to other European cities with lower land prices. For instance, Amsterdam has a lower land price for building facilities in the FLAP-D data center market, which is USD 38 per sq. ft. The Spanish market has many third-party DC projects under construction, with facilities being developed in Madrid and Barcelona. However, according to Cloudscene, the United Kingdom is said to host 456 data centers as of 2022, making it the most significant in the market studied.
Tier-3 standards becoming ideal choice among DC construction players
- The tier-3 segment currently has a majority of share in the European region due to the major advantage of its features. These tiers have a high redundancy level and multiple paths for power and cooling. These data centers have an uptime of around 99.982%, translating into a downtime of 1.6 hours per year. The increasing adoption of edge and cloud connectivity is expected to boost the segment's growth.
- The United Kingdom hosts the maximum number of tier 3 data centers in the country, with Slough and Greater London holding a major share. The other major locations are France, Germany, Ireland, and other countries. Dublin is the only region that hosts more than 98% of Ireland's tier 3 data center facilities, with North and South Dublin holding a major share. The tier 3 segment is expected to grow from 7,979.69 MW in 2023 to 12,110.18 MW in 2029, registering a CAGR of 7.20%.
- Furthermore, there are 28 data center facilities under construction which are being built with Tier-3 standards. Major Tier 3 DC construction players include Colt Technology Services Group Limited, Equinix, Inc., NTT Ltd, and Echelon Data Centres. The construction is projected to be more concentrated in the London region, followed by Manchester, Cardiff, Birmingham, and others. Overall, SMBs generally prefer to use at least a Tier 3-rated system for the far superior redundancy protections offered. SMEs account for 99.9% of the business population in the United Kingdom. At the start of 2022, there were estimated to be 5.5 million UK private sector businesses. Such trends are major factors for the major upcoming construction in Tier 3 certification.
Europe Data Center Construction Industry Overview
Europe's Data Center Construction Market is moderately fragmented, with the top five companies occupying most of the market share. The major players in this market are AECOM, Arup, Caterpillar, SPIE UK, and Schneider Electric SE (sorted alphabetically).
In January 2023, CyrusOne acquired an office complex in Frankfurt, Germany, planning to turn it into a data center campus. The investment group Corum had sold the Europark office complex in Frankfurt for EUR 95 million (USD 102.3 million) before confirming that CyrusOne was the buyer. This is expected to boost opportunities for the vendors in the market.
In April 2023, Green Mountain, a Norwegian data center firm, launched a joint venture with energy firm KMW to build a new campus south of Frankfurt, Germany. The two corporations have created a 50:50 partnership to build a 54MW data center near Mainz. Three structures are proposed for the 25,000 sqm (269,100 sq ft) FRA1-Main site next to KMW's power plants. According to the firms, the buildings can handle both multi-tenant contracts and dedicated buildings. Power will be supplied by KMW's renewable portfolio, with backup power supplied by the local KMW gas plant rather than backup generators.
Europe Data Center Construction Market Leaders
AECOM
Arup
SPIE UK
Schneider Electric
Caterpillar
*Disclaimer: Major Players sorted in no particular order
Europe Data Center Construction Market News
February 2023: The French data center company Data4 announced plans for a new site in Hanau, Germany, on the site of a former army barracks in Hanu, east of Frankfurt, P3 Logistic Parks, a European logistics real estate company backed by GIC. The company revealed plans for a sizable data center park after purchasing the roughly 20-hectare site from P3. Data4 intends to develop a campus of its data centers.
January 2023: CyrusOne acquired an office complex in Frankfurt, Germany, planning to turn it into a data center campus. The investment group Corum had sold the Europark office complex in Frankfurt for EUR 95 million (USD 102.3 million) before confirming that CyrusOne was the buyer. Thus providing opportunities for the vendors studied in the market.
Table of Contents
1. INTRODUCTION
1.1 Study Assumption & Market Definition
1.2 Scope of the Study
2. Research Methodology
3. Executive Summary
4. Market Dynamics
4.1 Market Overview
4.2 Market Drivers
4.2.1 5G Developments Fuelling Data Center Investments
4.2.2 Growing Cloud Servce adoption
4.2.3 Green Data Centers rising awarness of Carbon-Neutrality leading to Infrastructure upgrades
4.3 Market Restraints
4.3.1 Security Challenges Impacting Growth of Data Centers
4.4 Value Chain / Supply Chain Analysis
4.5 Industry Attractiveness - Porter's Five Forces Analysis
4.5.1 Threat of New Entrants
4.5.2 Bargaining Power of Buyers/Consumers
4.5.3 Bargaining Power of Suppliers
4.5.4 Threat of Substitute Products
4.5.5 Intensity of Competitive Rivalry
4.6 Assessment of COVID-19 Impact
5. Key Industry Statistics
5.1 Planned/Under Construction IT Load Capacity
5.2 Planned/Under Construction Raised Floor Space
5.3 Planned/Under Construction Submarine Cable
6. MARKET SEGMENTATION
6.1 Tier Type
6.1.1 Tier 1 and 2
6.1.2 Tier 3
6.1.3 Tier 4
6.2 Data Center Size
6.2.1 Small
6.2.2 Medium
6.2.3 Large
6.2.4 Mega
6.2.5 Massive
6.3 Infrastructure
6.3.1 Cooling Infrastructure
6.3.1.1 Air-based Cooling
6.3.1.2 Liquid-based Cooling
6.3.1.3 Evaporative Cooling
6.3.2 Power Infrastructure
6.3.2.1 UPS Systems
6.3.2.2 Generators
6.3.2.3 Power Distribution Unit (PDU)
6.3.3 Racks and Cabinets
6.3.4 Servers
6.3.5 Networking Equipment
6.3.6 Physical Security Infrastructure
6.3.7 Design and Consulting Services
6.3.8 Other Infrastructure
6.4 End-User
6.4.1 IT & Telecommunication
6.4.2 BFSI
6.4.3 Government
6.4.4 Healthcare
6.4.5 Other End User
6.5 Geography
6.5.1 Germany
6.5.2 France
6.5.3 United Kingdom
6.5.4 Netherlands
6.5.5 Ireland
6.5.6 Switzerland
6.5.7 Denmark
6.5.8 Sweden
6.5.9 Italy
6.5.10 Poland
6.5.11 Norway
6.5.12 Austria
6.5.13 Spain
6.5.14 Rest of Europe
7. COMPETITIVE LANDSCAPE
7.1 Company Profiles
7.1.1 AECOM
7.1.2 NTT Ltd.
7.1.3 DPR CONSTRUCTION, INC.
7.1.4 IBM Corporation
7.1.5 Schneider Electric SE
7.1.6 Fortis Construction Inc.
7.1.7 HITT Contrating Inc.
7.1.8 Clune Construction Company LP
7.1.9 SPIE UK
7.1.10 Caterpillar Inc.
7.1.11 Honeywell International Inc.
7.1.12 Johnson Controls International PLC
- *List Not Exhaustive
8. INVESTMENT ANALYSIS
9. MARKET OPPORTUNITIES AND FUTURE TRENDS
Europe Data Center Construction Industry Segmentation
Data center construction combines physical processes used to construct a data center facility. It chains construction standards with data center operational environment requirements.
The Europe Data Center Construction Market is segmented by Tier Type (Tier 1 and 2, Tier 3, and Tier 4), by Data Center Size (Small, Medium, Large, Massive, and Mega), by Infrastructure (Cooling Infrastructure (Air-based Cooling, Liquid-based Cooling, Evaporative Cooling), Power Infrastructure (UPS Systems, Generators, Power Distribution Unit (PDU), Racks and Cabinets, Servers, Networking Equipment, Physical Security Infrastructure, Design and Consulting Services, and Other Infrastructure), End User ( IT & Telecommunication, BFSI, Government, Healthcare, and Other End User), and Geography (Germany, France, United Kingdom, Netherlands, Ireland, Switzerland, Denmark, Sweden, Italy, Russia, Belgium, Poland, Norway, Austria, Spain, and Rest of Europe). The market sizes and forecasts are provided in values of USD for all the above segments.
Tier Type | |
Tier 1 and 2 | |
Tier 3 | |
Tier 4 |
Data Center Size | |
Small | |
Medium | |
Large | |
Mega | |
Massive |
Infrastructure | |||||
| |||||
| |||||
Racks and Cabinets | |||||
Servers | |||||
Networking Equipment | |||||
Physical Security Infrastructure | |||||
Design and Consulting Services | |||||
Other Infrastructure |
End-User | |
IT & Telecommunication | |
BFSI | |
Government | |
Healthcare | |
Other End User |
Geography | |
Germany | |
France | |
United Kingdom | |
Netherlands | |
Ireland | |
Switzerland | |
Denmark | |
Sweden | |
Italy | |
Poland | |
Norway | |
Austria | |
Spain | |
Rest of Europe |
Frequently Asked Questions
What is the current Europe Data Center Construction Market size?
The Europe Data Center Construction Market is projected to register a CAGR of 5.30% during the forecast period (2024-2030)
Who are the key players in Europe Data Center Construction Market?
AECOM, Arup, SPIE UK, Schneider Electric and Caterpillar are the major companies operating in the Europe Data Center Construction Market.
What years does this Europe Data Center Construction Market cover?
The report covers the Europe Data Center Construction Market historical market size for years: . The report also forecasts the Europe Data Center Construction Market size for years: 2024, 2025, 2026, 2027, 2028, 2029 and 2030.
Europe Data Center Construction Industry Report
Statistics for the 2024 Europe Data Center Construction market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Europe Data Center Construction analysis includes a market forecast outlook to for 2024 to 2030 and historical overview. Get a sample of this industry analysis as a free report PDF download.