The Europe Data Center Colocation market size was valued at USD 21.19 billion in 2024. The European market is estimated to be worth USD 75.56 billion by 2033 from USD 24.41 billion in 2025, growing at a CAGR of 15.17% from 2025 to 2033.
The Europe data center colocation market is experiencing robust growth owing to the increasing demand for cloud services and digital transformation initiatives. According to Eurostat, the region’s digital economy grew by 12% in 2023, underscoring the critical role of data centers in supporting technological advancements. Additionally, the European Commission reports that over 70% of enterprises in Western Europe rely on colocation services to manage their growing data needs. Sustainability is another key trend shaping the market, with operators like Equinix committing to achieving carbon-neutral operations by 2030.
The exponential growth of cloud computing is one of the major factors propelling the growth of the Europe data center colocation market. According to Gartner, cloud spending in Europe reached €45 billion in 2023, reflecting a 20% increase from the previous year. Enterprises are increasingly outsourcing their IT infrastructure to colocation facilities to reduce costs and improve scalability. For instance, multinational corporations like Siemens have partnered with colocation providers to host their hybrid cloud environments, ensuring seamless access to data across regions. The push for digital transformation has further accelerated this trend. As per the European Cloud Industry Forum, over 60% of businesses in Europe plan to migrate their workloads to the cloud by 2025. This shift necessitates reliable colocation services capable of supporting high-density computing. Providers like Interxion have responded by expanding their facilities, offering advanced cooling and power management solutions tailored for cloud applications.
The rollout of 5G networks in Europe is further boosting the expansion of the European data center colocation market. According to the European Telecommunications Network Operators’ Association, 5G coverage expanded to over 50% of urban areas in Europe by 2023, requiring robust infrastructure to support low-latency applications. For example, telecom operators like Vodafone have partnered with colocation providers to deploy edge data centers, enabling real-time processing for IoT devices and autonomous vehicles. The need for proximity to end-users has further fueled demand. Colocation facilities are strategically located near urban centers, making them ideal for hosting 5G-related applications.
One of the primary challenges facing the Europe data center colocation market is the rising cost of energy. According to the European Environment Agency, energy prices increased by 15% in 2023, driven by geopolitical tensions and supply chain disruptions. Data centers are energy-intensive facilities, with cooling systems alone accounting for up to 40% of total energy consumption, as reported by the Uptime Institute. This issue is particularly pronounced in countries like the UK, where energy costs are among the highest in Europe. For instance, British colocation providers have seen operating expenses rise by 25% in the past year, limiting their ability to offer competitive pricing. While renewable energy adoption can mitigate costs, the transition requires significant upfront investments, posing a barrier for smaller operators.
Stringent environmental regulations in Europe are further impeding the growth of the European data center colocation market. The European Green Deal mandates that all data centers achieve carbon neutrality by 2030, requiring operators to adopt sustainable practices. According to the Climate Neutral Data Centre Pact, compliance with these regulations can increase operational costs by up to 20%, as companies must invest in energy-efficient technologies and renewable energy sources. For example, France’s recent legislation requires data centers to use at least 50% renewable energy by 2025, creating additional financial burdens. Furthermore, varying regulatory frameworks across Europe complicate market entry strategies for multinational operators. These complexities hinder growth and force companies to allocate resources toward meeting compliance requirements.
The rapid adoption of artificial intelligence (AI) is a notable opportunity for the Europe data center colocation market. According to McKinsey & Company, AI-driven applications are expected to generate €200 billion in revenue for European businesses by 2025, creating demand for high-performance computing infrastructure. Colocation facilities are uniquely positioned to support AI workloads, offering scalable resources and advanced cooling systems. For instance, Google Cloud recently partnered with a European colocation provider to host its AI training models, leveraging the facility’s proximity to major research hubs.
Emerging markets in Eastern Europe offer untapped opportunities for growth the European data center colocation market. According to the World Bank, countries like Poland and Romania are witnessing rapid digitalization, with IT spending increasing by 25% annually. Colocation providers are capitalizing on this trend by establishing facilities in these regions, catering to local enterprises and multinational corporations. For example, Equinix opened a new data center in Warsaw in 2023, targeting SMEs and startups seeking affordable colocation services.
Cybersecurity threats is one of the major challenges to the Europe data center colocation market. According to Cybersecurity Ventures, cyberattacks targeting data centers are projected to cause €10 billion in damages annually by 2025. Colocation facilities, which house sensitive data for multiple clients, are particularly vulnerable to breaches. For instance, a ransomware attack on a major European colocation provider in 2023 disrupted operations for over 50 enterprises, highlighting the need for robust security measures. As per the European Union Agency for Cybersecurity, many facilities lack standardized protocols for threat detection and mitigation, exacerbating the risk. To address this, companies like Digital Realty are investing in next-generation encryption technologies, but the transition is slow and costly.
Supply chain disruptions for critical components such as servers and cooling systems is also challenging the expansion of the European data center colocation market. According to the European Logistics Association, semiconductor shortages caused by geopolitical tensions delayed the deployment of new data center projects by up to six months in 2023. This issue is compounded by reliance on imports for essential materials. As per the European Raw Materials Alliance, over 90% of rare earth metals used in server manufacturing are sourced from foreign markets, making the supply chain vulnerable to external shocks. For example, tariffs imposed on Chinese imports raised production costs for manufacturers, limiting their ability to meet growing demand. These disruptions hinder market growth and force companies to explore alternative sourcing strategies.
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REPORT METRIC |
DETAILS |
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Market Size Available |
2024 to 2033 |
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Base Year |
2024 |
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Forecast Period |
2025 to 2033 |
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CAGR |
15.17% |
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Segments Covered |
By Type, End-Use, Enterprise Size, and Region |
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Various Analyses Covered |
Global, Regional, & Country Level Analysis; Segment-Level Analysis; DROC; PESTLE Analysis; Porter’s Five Forces Analysis; Competitive Landscape; Analyst Overview of Investment Opportunities |
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Regions Covered |
UK, France, Spain, Germany, Italy, Russia, Sweden, Denmark, Switzerland, Netherlands, Turkey, Czech Republic, Rest of Europe |
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Market Leaders Profiled |
Iron Mountain Incorporated, Cyxtera Technologies, Inc., Digital Realty Trust, Inc., Equinix, Inc., Global Switch, Interxion, CenturyLink, China Telecom Corporation Limited, CoreSite Realty Corporation, Colt Group Holdings Limited, CyrusOne, NTT Communications Corporation, Rackspace Technology, Switch, and others. |
The retail colocation segment accounted for 60.3% of the Europe data center colocation market share in 2024. The leading position of retail colocation segment in the European market is attributed to its suitability for small and medium-sized enterprises (SMEs), which require flexible and scalable solutions. For instance, the European SME Union reports that over 70% of SMEs prefer retail colocation due to its affordability and ease of deployment. Advancements in modular designs are further boosting the expansion of the retail colocation segment in the European market. As per the Modular Data Center Association, modular retail colocation solutions reduced deployment times by 30% in 2023, enabling faster market entry. Additionally, government incentives for digitalization have encouraged SMEs to adopt colocation services, driving demand.
The sholesale colocation segment is anticipated to register the fastest CAGR of 11.4% over the forecast period owing to the increasing demand for hyperscale data centers, particularly from large enterprises and cloud service providers. According to the European Cloud Industry Forum, hyperscale deployments accounted for over 40% of total colocation capacity in 2023. Innovations in energy efficiency are further boosting the expansion of sholesale colocation segment in the European market. For example, Equinix introduced a wholesale facility in Frankfurt equipped with liquid cooling systems, reducing energy consumption by 25%. Furthermore, the emphasis on sustainability has driven investments in eco-friendly wholesale solutions, positioning this segment as a key growth driver.
By End-Use Insights
The IT & telecom segment occupied 56.7% of the Europe data center colocation market share in 2024. The dominance of IT and telecom segment in the European market is attributed to the sector’s reliance on colocation services to manage growing data volumes and support cloud applications. For instance, the European Telecommunications Network Operators’ Association highlights that over 60% of telecom operators utilize colocation facilities for their network infrastructure. Technological advancements are also aiding the expansion of the IT and telecom segment in the European market. For example, Nokia partnered with a colocation provider in 2023 to host its 5G core network, ensuring low-latency connectivity. Additionally, the push for digital transformation has increased demand for scalable solutions, driving growth in this segment.
The healthcare segment is another major segment and is estimated to witness a promising CAGR of 12.2% over the forecast period owing to the increasing adoption of telemedicine and electronic health records (EHRs). As per the European Health Data Space initiative, healthcare data storage requirements are projected to grow by 30% annually through 2030. Innovations in data security are further propelling the expansion of the healthcare segment in the European market. For instance, Philips Healthcare collaborated with a colocation provider in 2023 to host its patient data securely, ensuring compliance with GDPR regulations.
The large enterprises segment accounted for the leading share of the Europe data center colocation market in 2024. The leading position of large enterprises segment in the European market is driven by their extensive IT infrastructure needs and reliance on colocation services for scalability. For instance, the European Federation of Large Enterprises reports that over 80% of Fortune 500 companies in Europe utilize colocation facilities to manage their data workloads. The push for hybrid cloud environments are further boosting the expansion of the growth of the large enterprises segment in the European market. As per the Cloud Industry Forum, large enterprises account for over 65% of hybrid cloud deployments, necessitating robust colocation solutions. Additionally, government incentives for digital transformation have encouraged investments in colocation services, solidifying the segment’s dominance.
The SMEs segment is predicted to register a promising CAGR of 13.3% over the forecast period owing to the increasing affordability of colocation services and the need for scalable IT infrastructure. For example, the European SME Union highlights that over 50% of SMEs adopted colocation services in 2023 to reduce operational costs. Innovations in modular designs are further fuelling the growth rate of the SMEs segment in the European market. For instance, Interxion launched a compact colocation solution in 2023, specifically designed for SMEs.
Germany accounted for 26.1% of the European data center colocation market share in 2024. The robust digital infrastructure and status of Germany as Europe’s industrial powerhouse are driving the dominating position of Germany in the European market. Frankfurt serves as a global hub, hosting over 40% of the country’s colocation facilities due to its strategic location and connectivity to fiber-optic networks. The rise of Industry 4.0 and IoT adoption has driven demand, with enterprises seeking scalable solutions for real-time data processing. According to Statista, Germany’s colocation market grew by 18% annually between 2021 and 2023, fueled by investments from multinational corporations like SAP and Siemens. Additionally, government initiatives promoting renewable energy have encouraged sustainable practices, with 30% of facilities powered by green energy. Despite challenges like rising energy costs, Germany’s focus on innovation ensures steady growth.
The UK occupied the second largest share of the European data center colocation market in 2024. The role of the UK as a bridge between Europe and North America is one of the factors driving the growth of the UK data center colocation market. London is the epicenter, housing over 50% of the country’s facilities due to its proximity to international subsea cables and financial institutions. The surge in cloud computing and fintech innovations has amplified demand, with hyperscale providers like AWS and Google expanding their presence. According to Synergy Research Group, the UK’s colocation capacity increased by 20% annually since 2021, supported by Brexit-related data localization trends. Moreover, the UK’s commitment to Net Zero goals has spurred investments in energy-efficient cooling systems, with 25% of facilities adopting advanced technologies.
France is anticipated to account for a promising share of the European data center colocation market over the forecast period. The rapid digital transformation and emphasis of France on cybersecurity is primarily driving the French market growth. Paris is a key player, attracting investments from global giants like OVHcloud and Equinix. Over 60% of demand comes from sectors like healthcare, e-commerce, and public services, driven by government mandates for secure data storage. According to Eurostat, France’s adoption of cloud-based services grew by 25% annually since 2021, boosting colocation needs. Additionally, France’s focus on sustainability aligns with EU goals, with 35% of facilities utilizing renewable energy. Retailers like Scaleway have expanded offerings, catering to SMEs.
The Netherlands is predicted to account for a prominent share of the European data center colocation market over the forecast period. The advanced connectivity and commitment to green energy of Netherlands are propelling the Netherlands market growth. Amsterdam is a global hotspot, hosting over 70% of the country’s facilities due to its access to high-speed internet and tax incentives for tech companies. The rise of AI and big data has driven demand, with hyperscale providers like Microsoft and IBM expanding operations. According to CBRE, the Netherlands’ colocation capacity grew by 15% annually since 2021, supported by investments in wind and solar-powered facilities. Additionally, stringent environmental regulations ensure eco-friendly practices, with 40% of facilities achieving carbon neutrality. By prioritizing sustainability and connectivity, the Netherlands maintains its prominence in Europe’s colocation industry.
Sweden is expected to account for a notable share of the European data center colocation market over the forecast period. The abundant renewable energy resources and cold climate that are ideal for energy-efficient cooling is propelling the Swedish market growth. Stockholm and Luleå are pivotal hubs, attracting global players like Facebook (Meta) and Google due to low electricity costs and robust infrastructure. Over 50% of demand comes from hyperscale providers, reflecting Sweden’s appeal for large-scale operations. According to Statista, Sweden’s colocation market expanded by 22% annually since 2021, driven by investments in green data centers. Additionally, the country’s focus on circular economy principles encourages recycling of IT equipment, reducing environmental impact. Retailers like Bahnhof have introduced affordable options, broadening accessibility.
Iron Mountain Incorporated, Cyxtera Technologies, Inc., Digital Realty Trust, Inc., Equinix, Inc., Global Switch, Interxion, CenturyLink, China Telecom Corporation Limited, CoreSite Realty Corporation, Colt Group Holdings Limited, CyrusOne, NTT Communications Corporation, Rackspace Technology, Switch, and Telehouse are playing dominating role in the Europe data center colocation market.
The Europe data center colocation market is marked by intense competition, with established giants and emerging players vying for supremacy. According to the European Data Center Federation, the top five companies account for over 60% of total sales, reflecting the market’s oligopolistic structure. Equinix, Interxion, and Digital Realty dominate the landscape, leveraging their technological expertise and extensive distribution networks.
Smaller players, however, are gaining traction through niche offerings, such as edge data centers and AI-driven solutions. The rise of e-commerce platforms has leveled the playing field, enabling smaller brands to reach wider audiences. Price wars and promotional campaigns are common, particularly in the SME segment. Despite these challenges, innovation remains a key differentiator, with companies continuously introducing advanced solutions to meet evolving consumer demands.
Equinix leads the Europe data center colocation market, contributing significantly to the global industry through its extensive network of facilities. According to the European Data Center Federation, Equinix operates over 40 data centers in Europe, serving enterprises across various sectors. The company’s focus on sustainability has strengthened its position, with renewable energy powering 90% of its facilities.
Interxion is another key player in the European data center colocation market and is renowned for its expertise in hosting cloud and hybrid IT environments. The company’s strategic partnerships with cloud providers like AWS and Microsoft enhance its global footprint.
Digital Realty is a promising company in the European market Its contributions to the global market include advanced solutions tailored for hyperscale deployments.
Key players in the Europe data center colocation market employ diverse strategies to strengthen their positions. One prominent approach is geographic expansion; Equinix opened new facilities in Warsaw and Madrid in 2023 to tap into emerging markets. Another strategy is sustainability initiatives; Interxion committed to achieving carbon neutrality by 2025, aligning with regulatory standards.
Strategic partnerships also play a crucial role. In 2023, Digital Realty collaborated with a leading European cloud provider to enhance its service offerings, resulting in a 20% increase in client acquisition. Additionally, companies like Equinix are investing in AI-driven analytics to optimize energy efficiency, further solidifying their leadership in the competitive landscape.
MARKET SEGMENTATION
This research report on the Europe data center colocation market is segmented and sub-segmented into the following categories.
By Type
By End-Use
By Enterprise Size
By Country
Frequently Asked Questions
The market is anticipated to grow at a compound annual growth rate (CAGR) of 15.17%.
Key drivers include increasing data traffic, demand for cloud services, edge computing applications, and regulatory compliance like GDPR.
Countries like the UK, Germany, and France are significant contributors due to their connectivity hubs and advanced infrastructure.
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