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Colocation Europe: A Thriving & Dominant Data Center Market Led By The UK, Germany, France & The Netherlands

9 May 2017
Data Centers in Europe

Home to some of the most important tech hubs in the world, Europe is a significant driver and adopter of modern technology. And according to international research firm, Broadgroup, the growing demand for 5G, virtual reality and artificial intelligence is set to shake up the enterprise tech market in Europe in 2017 and beyond.

For Europe’s data center sector specifically, the main drivers of growth are big data, cloud and the IoT. Colocation services continued to dominate global data center market revenue accounting for 62.8% of the industry’s overall revenue in 2016, with Broadgroup also predicting a “good market performance” thanks to €8 billion in colocation revenue projected by the end of 2019.

Amidst the promise of growth however, there are a number of issues that have cast a shadow over the security and stability of the region, specifically:

  • Data sovereignty and uncertainty over law changes that could dictate cross border data storage
  • Brexit and the full affect of the changes which are yet to be realized
  • Political unease resulting from significant leadership changes in Europe and the United States
  • The economic impact of a number of terrorist events igniting domestic security concerns.

Despite this, Europe’s dominance in the sector is inarguable and it remains a thriving data center market. With 2,148 facilities across the region, Europe’s colocation footprint just exceeds the United States which boasts 2,130 data centers. And whilst the Asia Pacific region is currently the world’s biggest data center growth market, the region currently follows considerably behind its European and American counterparts with just 860 data centers.

A number of colocation cities were put in the spotlight earlier this year which saw four European capitals – London, Amsterdam, Frankfurt and Paris – dominate majority of the top spots in the 2017 Global Top Ten Colocation Ecosystems rankings.

Frost & Sullivan has reported that the regional nature of Europe does however, present significant challenges for IaaS providers due to the tendency to opt for local partnerships which are often indirect but instill confidence in data security. Nevertheless, investment and growth in the data center sector has been fruitful. Microsoft alone has doubled its European data center capacity in just the past year.

There has also been a steady rise in the number of nordic countries attracting the major telco, internet and cloud providers. Facebook announced in January this year that it will build a new facility in Denmark, its third in Europe joining Sweden and Ireland. AWS also announced it will open three data centers in Sweden in 2018 and Interxion unveiled its plans to build three more data centers in Frankfurt, London and Stockholm.

Ireland in particular has experienced a boom in data center investment with over $2bn announced in commitments to the region with a further $2bn expected over the next five years according to the Irish Wind Energy Association. Whilst a particularly small country, with a population of just 4.64 million, The Economist argues that Ireland presents numerous foreign investment advantages including (1) Access to EU markets, (2) A competitive corporate tax infrastructure, (3) A uniquely talented workforce and (4) A stable regulatory framework that supports business.

At this point however, Ireland is ranked 14th based on number of facilities currently in operation. Interestingly, there are five key markets that control 59% of Europe’s data centers with the complete breakdown detailed below:

Country (see all market profiles) # of Data Centers
United Kingdom 411
Germany 345
France 251
Netherlands 194
Sweden 84
Switzerland 84
Spain 82
Poland 66
Belgium 65
Russia 59
Austria 53
Czech Republic 41
Denmark 41
Ireland 40
Ukraine 38
Norway 31
Finland 30
Romania 25
Turkey 22
Portugal 21
Luxembourg 18
Slovakia 18
Hungary 17
Latvia 17
Bulgaria 16
Slovenia 12
Estonia 10
Greece 9
Lithuania 8
Croatia 7
Serbia 7
Belarus 4
Cyprus 3
Iceland 3
Liechtenstein 3
Malta 3
Macedonia 2
Moldova 2
Andorra 1
Azerbaijan 1
Bosnia & Herzegovina 1
Georgia 1
Italy 1
Monaco 1

 

The Q1, 2017 Leaderboard recently revealed the top data center operators in EMEA however, the top five data centers (by number of service providers) in Europe are clearly dominated by Equinix and Telehouse:

  1. FR5 (Equinix) – 253 Service Providers
  2. Telehouse North (Telehouse) – 225 Service Providers
  3. Paris Voltaire (Telehouse) – 174 Service Providers
  4. PA2 (Equinix) – 146 Service Providers
  5. Telehouse East (Telehouse) – 142 Service Providers

On the cloud front, Amazon has a staggering 83% share of the EMEA public cloud market. The new Cloud On-Ramps feature which will be launched by Cloudscene this week delivers exclusive access to data on direct connections within Colocation facilities world-wide. Further analysis of the data reveals that London is one of the top five colocation hubs with more direct connection services than any other city in the world. The remaining hubs being Washington DC, Chicago, Sydney and Dallas.

To compare data centers, service providers and markets in Europe at the click of a button, simply visit cloudscene.com/eu

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