The Europe data center market was valued at USD 72.12 billion in 2024. The European market is projected to reach USD 185.34 billion by 2033 from USD 80.09 billion in 2025, growing at a CAGR of 11.06% from 2025 to 2033.
Data centers house servers, networking equipment, and storage systems to support applications ranging from cloud computing to artificial intelligence and big data analytics. In Europe, the rising data generation, cloud adoption, and the digital transformation of industries across Europe are promoting the data center market expansion. According to the European Commission, the data volume of Europe is projected to grow by 530% between 2018 and 2025, which is indicating the growing demand for robust data storage and management solutions. Germany, the UK, and the Netherlands are prominent players in the European market. For instance, Germany leads in the number of operational hyperscale data centers, while the Netherlands is a key hub for data center connectivity due to its advanced internet infrastructure.
The rapid adoption of cloud computing is a major driver of the European data center market. Businesses across sectors are increasingly migrating to cloud platforms for scalable, flexible, and cost-efficient computing solutions. According to the European Commission, cloud adoption among EU enterprises rose to 41% in 2023, compared to 26% in 2021. This trend fuels demand for hyperscale and colocation data centers capable of hosting cloud services. Countries like Ireland and the Netherlands have become key hubs for cloud service providers due to their robust connectivity and favorable regulatory frameworks. The expansion of cloud-based applications further underscores the growing need for advanced data center infrastructure in Europe.
Government-led digital transformation initiatives across Europe are significantly boosting the demand for data centers. The European Union’s Digital Decade strategy aims to achieve 75% enterprise adoption of digital technologies by 2030, driving investments in IT infrastructure. This includes the development of edge and core data centers to support emerging technologies such as artificial intelligence, Internet of Things (IoT), and 5G. For example, Germany and France have allocated substantial funding to enhance their digital ecosystems. According to the European Commission, digital transformation is expected to contribute €2.2 trillion to Europe’s GDP by 2030, further accelerating the need for data center expansion to support economic growth and innovation.
The substantial energy consumption of data centers is a major restraint on the European market, especially as sustainability becomes a key focus. The European Environment Agency reports that data centers account for approximately 2.7% of the EU's total electricity demand, a figure expected to rise with increasing data generation. This creates pressure on energy grids and raises environmental concerns. Additionally, achieving compliance with stringent energy efficiency and emissions regulations, such as those outlined in the EU’s Climate Neutral Data Centre Pact, demands costly upgrades to infrastructure. These challenges complicate operations for providers, particularly in regions where renewable energy access is limited.
The limited availability of suitable land and resources for building data centers is another significant challenge in Europe. Data centers require large-scale infrastructure with access to reliable power, cooling, and high-speed connectivity. The European Commission notes that densely populated regions, such as Germany and the Netherlands, face constraints due to high real estate costs and land scarcity. Moreover, securing permits and meeting local environmental regulations often delay project timelines. These factors hinder the establishment of new data centers, particularly in prime locations, and pose a barrier to scaling operations in response to rising demand for digital services.
The growing adoption of edge computing presents a significant opportunity for the European data center market. Edge data centers bring computing resources closer to end-users, reducing latency and enhancing real-time data processing. The European Commission highlights that edge computing is critical for supporting emerging technologies like 5G, IoT, and autonomous systems. Europe’s rollout of 5G networks, expected to cover all urban areas by 2030, drives demand for localized data centers. For example, Germany has prioritized edge infrastructure to support smart city initiatives and industrial automation. The expansion of edge computing infrastructure complements existing data centers, enabling enhanced connectivity and scalability for diverse applications.
The emphasis on sustainability and renewable energy integration creates a transformative opportunity in the European data center market. Data center operators are increasingly adopting renewable energy sources, such as wind and solar, to power their facilities and meet environmental goals. The European Green Deal aims to achieve climate neutrality by 2050, incentivizing investments in green data centers. The European Environment Agency notes that countries like Sweden and Denmark lead in renewable energy utilization for data center operations, achieving up to 90% reliance on clean energy. This focus on sustainability not only reduces environmental impact but also aligns with regulatory requirements, enhancing the market’s long-term growth prospects.
Increasing energy costs pose a significant challenge to the European data center market. Data centers are energy-intensive operations, with the European Commission reporting that they consume approximately 2.7% of the EU’s total electricity. The volatility of energy prices, exacerbated by geopolitical tensions and the transition to renewable energy, increases operational expenses for data center providers. For instance, energy costs in Europe surged by over 50% in 2022, according to the International Energy Agency, directly impacting profit margins. These rising costs make it difficult for data center operators to balance sustainability efforts with affordability, particularly in regions with limited access to cost-effective renewable energy sources.
Compliance with stringent environmental and data protection regulations is another major challenge for the European data center market. The European Union’s General Data Protection Regulation (GDPR) imposes strict requirements on data security and handling, necessitating significant investment in cybersecurity and infrastructure upgrades. Additionally, the Climate Neutral Data Centre Pact mandates achieving net-zero carbon emissions by 2030, requiring operators to adopt energy-efficient technologies and renewable energy solutions. These regulations, while essential for sustainability and data protection, increase operational complexity and costs, particularly for smaller operators. The European Commission emphasizes that regulatory compliance is crucial but often delays project timelines and affects market competitiveness.
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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 |
11.06% |
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Segments Covered |
By Component, Size, Type, Tier, Industry, and Country |
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Various Analyses Covered |
Country Level Analysis, Segment-Level Analysis, DROC, PESTLE Analysis, Porter’s Five Forces Analysis, Competitive Landscape, Analyst Overview on Investment Opportunities |
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Countries Covered |
UK, France, Spain, Germany, Italy, Russia, Sweden, Denmark, Switzerland, Netherlands, Turkey, Czech Republic, and Rest of Europe |
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Market Leaders Profiled |
Companies that hold a prominent place in the Europe data center market include Digital Realty Trust Inc., Equinix Inc., NTT Ltd, SOCIETE FRANCAISE DU RADIOTELEPHONE – SFR, and Virtus Data Centres Properties Ltd (STT GDC) |
The hardware segment is currently the most dominating segment and accounted for 60.6% of the European market share in 2024. The domination of the hardware segment in the European market is majorly attributed to the increasing demand for servers, storage systems, and networking equipment to support growing data volumes and cloud computing. According to the reports of the German Federal Ministry for Economic Affairs and Energy, investments in data center hardware grew by 18% in 2022, which is indicating the demand for digital transformation across industries. Hardware is critical for building scalable and efficient data center infrastructure, making it the backbone of the market.
The DCIM (Data Center Infrastructure Management) software segment is expected to be the fastest growing segment and grow at a CAGR of 14.5% over the forecast period. The need for energy efficiency and operational optimization in data centers is driving the adoption of DCIM solutions and boosting the expansion of the DCIM software segment in the European market. As per the reports of the International Energy Agency, data center energy consumption in Europe increased by 10% in 2023. DCIM software is essential for improving resource management, reducing costs, and ensuring sustainability, aligning with Europe’s goal of achieving carbon neutrality by 2050.
The large data centers led the market by accounting for 55.8% of the European market share in 2023 due to the increasing demand for hyperscale facilities to support cloud computing, big data, and AI applications. The German Federal Ministry for Economic Affairs and Energy reports that investments in large data centers grew by 20% in 2022, driven by the expansion of global cloud service providers. Large data centers are critical for delivering high-capacity, scalable, and cost-efficient solutions, making them essential for Europe’s digital economy.
The mid-sized data centers segment is on the rise and is projected to grow at a CAGR of 12.8% over the forecast period. According to the report by the International Energy Agency, mid-sized data centers are increasingly adopted by enterprises for their balance of scalability and proximity to end-users, with deployments growing by 15% in 2023. Mid-sized data centers are vital for reducing latency, improving data security, and supporting regional digital transformation, aligning with Europe’s focus on decentralized and sustainable data infrastructure.
The hyperscale segment was the leading segment in the European market and held 40.3% of the European market share in 2024. The rising demand for massive computing power and storage capacity from cloud service providers and large enterprises is propelling the expansion of hyperscale segment in the European market. As per the reports of the German Federal Ministry for Economic Affairs and Energy, hyperscale facilities grew by 22% in 2022. Hyperscale data centers are critical for supporting scalable, cost-efficient, and high-performance digital services, making them essential for Europe’s digital transformation.
The edge data centers segment is growing rapidly and is estimated to grow at a CAGR of 18.5% over the forecast period due to the rise of IoT, 5G, and real-time applications that is driving the need for localized data processing. According to the International Energy Agency, edge data center deployments increased by 25% in 2023, particularly in urban areas, to reduce latency and improve data security. Edge data centers are vital for enabling faster data processing, supporting smart cities, and enhancing user experiences, aligning with Europe’s focus on decentralized and sustainable digital infrastructure.
The Tier 3 segment is currently leading the European data centers market and accounted for 45.8% of the European market share in 2024. The balance of Tier 3 of high availability (99.982% uptime) and cost efficiency, making it ideal for enterprises requiring reliable infrastructure without the extreme costs of Tier 4. Tier 3 data centers are critical for ensuring business continuity and operational resilience across industries.
The Tier 4 segment is expected to grow at the fastest CAGR of 14.2% over the forecast period. The need for fault-tolerant infrastructure with 99.995% uptime is driving the segmental growth, particularly for mission-critical applications in sectors like defense, aerospace, and cloud computing. Tier 4 data centers are vital for ensuring zero downtime, supporting high-performance computing, and meeting stringent regulatory requirements, aligning with Europe’s focus on robust and secure digital infrastructure.
Germany is a leader in the European data center market due to its robust IT infrastructure, strategic location, and strong industrial base. According to the European Commission, Germany hosts over 450 data centers, including multiple hyperscale facilities, making it a hub for cloud and colocation services. The country’s commitment to renewable energy integration, with over 40% of its electricity coming from renewables, supports its sustainability goals. Additionally, Germany’s focus on data sovereignty and compliance with GDPR ensures its attractiveness for both local and international enterprises.
Netherlands is another key regional market for data centers in Europe. The Netherlands is a data center hub in Europe and leveraging its advanced connectivity and favorable regulatory environment. The European Commission highlights the country’s leading position in international data traffic, supported by the Amsterdam Internet Exchange (AMS-IX), one of the world’s largest internet hubs. With over 200 data centers, the Netherlands prioritizes energy-efficient designs and renewable energy use, aligning with EU climate objectives. Its strategic location further enhances its role as a gateway for data services in Europe.
The UK is another promising player in the European data center market. The UK market is anticipated to account for a notable share of the European market during the forecast period owing to the advanced cloud infrastructure of the UK and significant investments in technology. According to the UK Department for Digital, Culture, Media & Sport, the country’s digital sector contributes over £150 billion annually to its economy. The UK’s high adoption of cloud computing and strong financial services industry drive demand for advanced data center facilities, solidifying its market position.
Companies that hold a prominent place in the Europe data center market include Digital Realty Trust Inc., Equinix Inc., NTT Ltd, SOCIETE FRANCAISE DU RADIOTELEPHONE – SFR, and Virtus Data Centres Properties Ltd (STT GDC)
This research report on the Europe data center market is segmented and sub-segmented into the following categories.
By Component:
By Size:
By Type:
By Tier:
By Industry:
By Country:
Frequently Asked Questions
The Europe data center market is growing due to increased demand for cloud computing, rising adoption of AI and IoT, expansion of hyperscale data centers, and stricter data sovereignty regulations.
The most common types of data centers in Europe include colocation facilities, hyperscale data centers, and enterprise data centers, with a growing focus on edge data centers.
The largest users include technology companies, financial services, healthcare, e-commerce, and media & entertainment sectors that require high computing power and data storage.
Key trends include increased AI-driven automation, expansion of modular data centers, growing use of renewable energy, and rising investments in connectivity hubs across the region.
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