Market Trends of Europe Data Center Server Industry
IT & Telecommunication Holds the Major Share.
- The cloud and telecom segment is expected to drive significant demand in the region. The demand for cloud services is promising in Denmark, Sweden, the United Kingdom, Germany, and other developed countries. The need for cloud solutions continues to grow in Denmark, and the demand for cloud-based data protection and backup solutions is expected to get more robust. In June 2022, Keepit, a cloud backup service with headquarters in Copenhagen, raised USD 22.5 million in debt financing from Silicon Valley Bank (SVB) in association with Vaekstfonden.
- Further, more than 80% of all businesses in the Netherlands use cloud computing. Market newcomers like Google, Oracle, and Microsoft are heavily present in the nation and have adopted cloud services. During the forecast period, AWS will likely also enter the market by establishing its cloud region.
- In the United Kingdom, Brexit created some uncertainty among cloud providers. Although during the Brexit transition period, they are subject to the EU GDPR (General Data Protection Regulation) and the UK Data Protection Act 2019, the future rules for data storage and retrieval of customer data are unclear. This has caused some mainland European companies to migrate their data requirements to Germany, the Netherlands, France, and other EU countries, but the reverse is also true as UK businesses are relocating their data to UK-based data centers. In line with consumer demand, the cloud computing segment is expected to shift inherently to include the use of multi-cloud in enterprises. The abovementioned factors are expected to result in the growth of the market over the forecast period.
- The rapidly increasing 5G wave is motivating telecom vendors to invest in the European data center market. Recently, Swedish network provider Net4Mobility, a joint venture between local carriers Tele2 and Telenor, announced plans to connect 90% of the nation's population to its 5G network by the end of 2023.
- Such developments, increasing adoption of cloud services, Expansion of 5G Networks, and the ongoing demand for online payments are, in turn, expected to boost the demand for the data center market from the IT and telecom segment, leading to major demand for the servers during the forecast period.
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United Kingdom is Expected to Grow Significantly
- The digital economy in the United Kingdom accounted for more than 7% of the country's GDP in 2022. This upward trend is set to continue, 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 United Kingdom has one of the highest internet penetration rates in the world. As of January 2022, the country had approximately 67 million internet users and 53 million active social media users, accounting for over 84% of the total population.
- In March 2024, AtlasEdge, a pan-European edge data center provider, announced the opening of its newest data center facility in the UK city of Leeds. Situated just four miles from the city center, the new facility provides connectivity, colocation, and cloud services. Such instances are expected to fuel the demand for the studied market.
- However, the availability and sustainability of power supply is a big challenge for all data center providers across the United Kingdom, and data center investors cited this as the single most important factor when choosing a new data center.
- Considering the above instances, the country is expected to create more demand for data storage in the coming years, creating more need for data center servers in the region.
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