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Factors Driving Growth in Euro Data Centers

by: Sarah Joson

Tuesday, July 22, 2014 |

A recent survey shows that data center services will gain more traction as businesses look for easy and convenient ways to process the rising volume of data.

Even with the looming challenges, the data center market in Europe is projected to post a compound annual growth rate of 16 percent up to 2018 with United Kingdom, Germany, France, and Benelux seen as the largest markets in the region.

The survey found that activity in data center services market in Europe will increase because of the cost advantage from outsourcing, rise in content-heavy applications, machine-to-machine connectivity, and growth in cloud technology.

The study done by Frost & Sullivan on European Data Center Services Market covers the retail colocation and managed hosting segments. It found that as the market matures, the former segment will be slower compared to the latter. As of 2013, retail colocation segment generated revenues of $2.83bn in 2013. It is predicted to reach $5.27bn in 2018. On the other hand, managed hosting revenues will increase from $2.01bn to $4.90bn over the same period.

Meanwhile, Shuba Ramkumar, Information and Communication Technologies Research Analyst at Frost & Sullivan, said organizations need to focus their own resources on designing innovative IT tasks and capitalize on making IT management services more efficient. He added that the growth of cloud services will boost colocation market in a few years’ time.

As for the colocation, it was found that with the market becoming more commercialized, he said providers would have to improve the efficiency and security of their cloud offerings.

Another issue that European businesses should face would be the regional data laws that complicate outsourcing strategies and decisions which make it crucial for data center services buyers to look into the location of the provider.

Ramkumar noted that with the regional nature of European companies, language barrier is also considered a challenge particularly in France, Spain, and Italy.


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