Data center market emerges in Europe

April 17, 2015

The strength of the U.S. economy and the continued growth of cloud computing has created a fertile global market for data centers and colocation providers. Business leaders recognize the potential gains of expanding their infrastructures and are doubling down on data-based investments.

That said, some of the more developed countries in Europe are also gaining plenty of ground in the data center market. The ongoing globalization of major tech companies has resulted in a surge for data center and colocation expansion.

Massive colocation growth in Europe
Synergy Research Group, a global data mining company, recently conducted a report on the state of colocation in Europe and found that the industry is rapidly expanding, according to Data Center Knowledge. For tech-forward enterprises with budgetary constraints, colocation is an appealing option because it can provide significant flexibility in regards to storage capacity. These shared data centers allow clients to rent one cage in a server rack or thousands of square feet in a facility.

In the first quarter of 2014, the European colocation market increased by 11 percent. The United Kingdom had the largest market – it accounted for 27 percent of revenue in the quarter for the whole continent. Germany, France and the Netherlands followed right behind. These four countries accumulated approximately 65 percent of total revenue. Carrier neutral retail gained 14 percent year over year, marking its highest growth rate of the previous five quarters.

“Despite the presence of all the major [telecommunications companies] in the European colocation market, the carrier-neutral segment is far larger than the bandwidth provider segment,” John Disdale, an analyst with Synergy Research Group, told the news outlet. “Clearly customers see benefits in having a choice of carriers and consequently the relatively open European market has enabled the growth of pan-European colocation specialists.”

Regulations can’t hinder European tech growth
While antitrust regulations continue to threaten American tech giants, these same companies are building new data centers throughout Europe, The Wall Street Journal reported.

Businesses such as Google, Apple and Amazon have broad plans in the continent that will catalyze their globalization efforts. Amazon recently built a new data center in Frankfurt to prove its compliance with strict German data privacy laws. The company also bolstered its workforce by nearly 25 percent in 2014.

“Even with all of this hiring, we remain in a phase of heavy investment and have many positions available which we look forward to filling in 2015,” Xavier Garambois, the head of Amazon’s retail business in the European Union, told the news outlet.