Europe Data Center Construction - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2024 - 2030)

Key Highlights

• Under Construction IT Load Capacity: The upcoming IT load capacity of the European data center construction market is expected to reach above 25,000 MW by 2030.
• Under Construction Raised Floor Space: Europe’s construction of raised floor areas is expected to exceed 80 million sq. ft. by 2030.
• Planned Racks: The region's total number of racks to be installed is expected to reach more than 4 million units by 2030. The United Kingdom is expected to house the maximum number of racks by 2030.
• Planned Submarine Cables: Many under-construction submarine cable projects are under process in Europe. For instance, in May 2024, the IOEMA Project introduced a groundbreaking 1,400 km repeatered submarine fiber optic initiative. This project signifies the first submarine fiber optic cable to land on Germany's North Sea shores in a quarter-century, thus marking a significant milestone. Spanning across the United Kingdom, the Netherlands, Germany, Denmark, and Norway, the IOEMA Project is set to revolutionize data connectivity in Northern Europe, offering enhanced capacity and redundancy.
• The FLAP-D (Frankfurt, London, Amsterdam, Paris, and Dublin) region has become significantly mature and faces 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 hotspots for data center construction across the region.

Europe Data Center Construction Market Trends

The United Kingdom Leads the Market with a Significant Market Share

• Digital transformation across multiple sectors has led to a growing demand for data processing capabilities, making the United Kingdom one of the significant players in terms of the consumption of data center services. The growing use of cloud computing, big data analytics, and IoT technologies has been driving the continuous rise of data center power in the United Kingdom.
• The United Kingdom is among the largest data center markets in Europe. The country has a considerable demand from small and medium-sized organizations that do not have the resources to set up their in-house IT operations. A significant percentage of the economy in the United Kingdom was estimated to be dominated by SMEs, which influenced the market for data centers.
• 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 was said to host 456 data centers as of 2022, making it the most significant country in the market studied.
• In March 2023, EfficiencyIT, a data center company based in the United Kingdom, introduced a line of prefabricated modular data centers. The business unveiled ModularDC, a prefabricated, modular data center that can be customized and deployed in 12-16 weeks for on-premises, distributed IT, and edge computing setups. Businesses can choose from a variety of ModularDC alternatives, including low voltage (LV) power equipment, uninterruptible power supplies (UPS), switchgear, backup generators, in-row cooling, hot and cold aisle containment, and liquid-cooled solutions for high-performance computing needs. There are alternatives to customize RF shielding, better physical security, acoustic mitigation, and SCIF compliance in ruggedized solutions. EfficiencyIT, whose products and solutions are designed, made, and engineered in the United Kingdom, combines Schneider Electric’s EcoStruxure and APC technology with its own design experience and selection of external enclosures.
• The companies in the region are also increasing their efforts to expand their data center presence in the market. They are engaging in various strategic activities. For instance, in January 2024, Google revealed plans to open a USD 1 billion data center in the United Kingdom to boost its cloud and AI capabilities. After the construction is completed, the data center will support cloud-based services like Google Cloud, Workspace, Maps, and Search, as well as the company’s AI advancements. Following Open AI's announcement that it would open its first office outside of the United States in London in June 2023, Google became the most recent tech giant to announce new operations in the United Kingdom. In April 2023, C3.AI also moved its headquarters for Europe to London.

Tier 3 Standards are Becoming an Ideal Choice Among DC Construction Players

• The tier 3 segment currently has a majority share in Europe due to the major advantage of its features. Tier 3 has 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, and Ireland. 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%.
• 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 London, followed by Manchester, Cardiff, and Birmingham. Overall, SMBs generally prefer to use at least a Tier 3-certified system for their far superior redundancy protections. SMEs account for 99.9% of the business population in the United Kingdom. At the start of 2022, there were an estimated 5.5 million private sector businesses in the country. Such trends are expected to majorly drive the upcoming construction of tier 3 data centers.

Europe Data Center Construction Industry Overview

• 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 54 MW data center near Mainz. Three structures are proposed for the 25,000 sq. m (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.

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