EUROPE DATA CENTER CONSTRUCTION MARKET

The Europe Data Center Construction Market is projected to grow at robust growth rate in the coming years owing to the rising development of IoT and cloud services along with governmental efforts to foster digitalization in their countries.

Major Europe Data Center Construction Market Drivers and Emerging Trends

The data center market in the region is propelled by the expansion of IoT, cloud services, and AI/ML technologies, supported by governmental digitalization initiatives that enhance operators’ confidence in conducting business within the region. Europe is also experiencing notable advancements in innovation and technology which leads to substantial investments in the European data center market. The market’s growth has also been fueled by factors including affordable land prices, political stability, accessibility to carriers, reliable internet connectivity, sufficient power availability, and favorable tax policies which creates opportunities for operators and encourages the entry of multiple stakeholders. Government support aimed at enhancing data center investments such as providing land for development, procuring renewable energy, and lowering electricity costs will drive market growth in the coming years.

The other factor supporting the expansion of Europe data center construction market size is the advancement of smart cities which is evident in Germany’s strategy to roll out smart city initiatives across the country through Smart City Model Projects Program, backed by EUR 1,250 billion allocated for these efforts. As a result of these factors, data consumption is anticipated to rise accordingly that leads to an increased IT workload in the upcoming years which is expected to rely on data centers. Additionally, current operators are actively seeking effective solutions to enhance infrastructure to better handle the colder weather conditions present across Europe.

Furthermore, the covid pandemic accelerated the adoption of remote schooling and work, shifting business communications to VoIP calls such as Zoom calls rather than traditional phone calls, and relying extensively on mobile apps throughout Europe. The increasing reliance on the Internet for work, socializing, online shopping, entertainment, and banking has heightened the requirement for uninterrupted uptime and extensive storage capacity which drives the demand for additional data centers. The rapid expansion of artificial intelligence and machine learning services along with cloud technology has significantly benefited the market, enabling data center service providers and companies to enhance business solutions and operational efficiency through various models facilitated by AI and cloud technology, thereby providing a substantial boost to the market. Demand for storing unstructured data has also seen an upward trend, as it serves as a valuable resource for major digital entities like Google, Facebook, and Instagram. When structured, this data enhances user experiences, enabling digital giants to facilitate product sales, services, and advertisement revenue from various providers via their platforms. The role of data centers in storing extensive data volumes is pivotal in driving market growth.

There is also an opportunity that lies ahead for Europe data center construction market growth including a notable increase in the demand for management capabilities and data storage within the financial sectors. The data center’s role in the financial services industry has experienced a profound shift from traditional practices, driven by substantial changes in revenue generated by financial institutions that necessitate adaptation of IT infrastructure to accommodate these evolving needs. This shift is anticipated to present lucrative opportunities for market growth.

However, there are some challenges including the considerable initial investment and ongoing operational costs of data centers, along with their environmental impact, which pose significant hurdles to market expansion. Additionally, the Europe data center construction market is facing obstacles due to the scarcity of skilled labor and expertise necessary for the intricate nature of data center construction. In Europe, data centers must also adhere to various regulations and standards, as non-compliance can lead to numerous and complex ramifications. Legally, a data provider that does not meet standards and fails to comply may be subject to consequences such as shutdowns, monetary fines, and additional sanctions.

Based on the tier type, the Tier-3 segment will dominate Europe data center construction market share largely due to its significant advantages where these tiers boast high redundancy levels as well as multiple power and cooling pathways. In addition, the segment’s growth is anticipated to be bolstered by the rising adoption of edge computing and cloud connectivity. The United Kingdom, with a concentration primarily in Greater London and Slough, hosts the highest number of tier 3 data centers which collectively dominate the market share alongside other key locations such as Germany, France, Ireland, and several other nations.

Based on industry vertical type, the market is segmented into Telecom Media & Entertainment, Banking, Financial, Securities and Insurance or BFSI, Technology, Government, among others. The characterization focuses on the primary areas where data centers are extensively applied, as they are now widely utilized across various sectors. Major industries utilize data centers to maintain agility and upgrade their IT infrastructures for generating critical insights and handling large volumes of data regularly. Data centers also play a pivotal role in supporting financial institutions with improved security, compliance, flexibility, and scalability.

Several significant players within the market include Arup, AECOM, Schneider Electric, SPIE UK, among others.

Segments covered in the Report:

The Europe Data Center Construction Market has been segmented on the basis of tier type, infrastructure and vertical. Based on the tier type, the market is segmented into tier 1, tier 2, tier 3, tier 4. Based on the infrastructure, the market is segmented into cooling infrastructure, power infrastructure, racks and cabinets, servers, networking equipment, physical security infrastructure, design and consulting services, other infrastructure. The cooling infrastructure segment is further segmented into air-based cooling, liquid-based cooling, evaporative cooling. The power infrastructure segment is further segmented into ups systems, generators, power distribution unit (PDU). Based on the vertical, the market is segmented into it & telecom, BFSI, government & defense, healthcare, energy, others.

Market Segmentation

Europe Data Center Construction Market by Tier Type

• •  Tier 1
  • Tier 2
  • Tier 3
  • Tier 4

Europe Data Center Construction Market 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
  • Other Infrastructure

Europe Data Center Construction Market by Vertical

• • IT & Telecom
  • BFSI
  • Government & Defense
  • Healthcare
  • Energy
  • Others