Market Overview

The Europe data center market size was USD 53.8 Billion in 2024 and is expected to reach USD 130.1 Billion by 2033, growing at a CAGR of 9.23% during 2025-2033. Growth is driven by increasing demand for cloud services, strict regulations like GDPR ensuring data sovereignty, rising cybersecurity concerns, and a push towards sustainable, energy-efficient data center technologies.

Study Assumption Years

  • Base Year: 2024
  • Historical Year/Period: 2019-2024
  • Forecast Year/Period: 2025-2033

Europe Data Center Market Key Takeaways

  • Current Market Size: USD 53.8 Billion in 2024
  • CAGR: 9.23% during 2025-2033
  • Forecast Period: 2025-2033
  • Increasing demand for cloud services is a major factor driving market growth.
  • Strict data protection regulations such as GDPR promote the expansion of local data centers.
  • Sustainability efforts and green data centers are creating new growth opportunities.
  • Edge computing growth is enhancing demand for geographically distributed data centers.
  • Challenges include high energy costs and strict regulatory compliance burdens.

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Market Growth Factors

The demand for cloud services has been the primary source of growth in Europe's data center industry: the European cloud computing market earned revenue of over 110 billion euros in 2023, projected to reach approximately 129 billion euros in 2024. Cloud services can increase productivity and scalability. In 2023, 42.5% of EU enterprises purchased cloud computing services, mostly for future use of email, file storage, and office software. The growth in cloud computing infrastructure has been driven by the substantial increase in remote working, and increases in IoT, AI and machine learning, which require infrastructure to store and manipulate data.

Stricter adherence to regulations such as GDPR or data sovereignty also drives demand for European data centers, where non-compliance can lead to important penalties of up to 0 million or 2% of an organization's global turnover. The presence of data protection and privacy laws in 71% of the countries in Europe has increased demand for local data centers to store sensitive data, thus driving market growth.

Sustainability can also be a growth driver. The EU 0's ambitious climate policy and European Green Deal push data centers to be more sustainable. Data centers with an IT power demand greater than 500 kW must report metrics for IT load performance. Management of IT load impact is achieved through energy efficient cooling, low power computing, and renewable energy. In Europe, data centers must be carbon-neutral by 2030. In addition to this legislative requirement, green data centers attract business from customers who care about the environment.

Market Segmentation

By Component:

  • Solution: Includes critical infrastructure such as servers, storage units, networking equipment, and data center management software essential for effective data management and security throughout Europe.
  • Services: Comprises consultancy, installation, maintenance, and managed services that provide the skills and support required for high performance and energy efficiency in data centers.

By Type:

  • Colocation: Enables firms to lease space for servers in managed setups, reducing the need for private infrastructure, driven by scalability and security needs.
  • Hyperscale: Large data centers supporting major cloud providers with scalable, powerful data processing and storage solutions focused on large IT and cloud services.
  • Edge: Smaller distributed data centers reducing latency by placing resources close to data sources, growing due to IoT and mobile computing proliferation.

By Enterprise Size:

  • Large Enterprises: Invest heavily in sophisticated, large hyperscale data centers utilizing cutting-edge technologies to ensure data security and operational efficiency.
  • Small and Medium Enterprises: Increasingly adopt data center services to leverage cloud computing for scalable, cost-effective IT infrastructure without large overheads.

By End User:

  • BFSI: Growing reliance on big data analytics and real-time processing requires secure, scalable IT infrastructure for sensitive financial transactions and compliance.
  • IT and Telecom: Essential for handling large data traffic, enabling high-speed communication and cloud services, with growth driven by 5G and IoT device integration.
  • Government: Increasing digital transformation efforts and data sovereignty compliance fuels expansion in local data centers for e-governance and security.
  • Energy and Utilities: Data centers enable efficient resource management, predictive maintenance, and smart grids with real-time monitoring to improve operational excellence.

By Country:

  • Germany: Key market hub due to strong infrastructure, high digitalization, strict data protection, and strategic location attracting local and international businesses.
  • France: Rapid growth driven by cloud adoption, government digitalization initiatives, global technology leaders, and superior connectivity.
  • United Kingdom: Mature data center market with strong demand in finance and tech sectors; continues attracting investment despite Brexit uncertainties.
  • Italy: Emerging market accelerated by renewable energy investments, technological innovation, improved internet infrastructure, and tech incentives.
  • Spain: Becoming a major European data center destination due to strategic EU location, evolving digital economy, improved internet, and favorable policies.

Regional Insights

Germany stands as a critical node in the European data center market with strong infrastructure, high digitalization, and stringent data protection. Its strategic position and robust connectivity make it the preferred choice for local and international businesses needing effective data management. This leadership reinforces Germany's dominant role in shaping the Europe data center landscape.

Recent Developments & News

In April 2024, Vantage Data Centers announced its entry into the Irish market with plans to develop a multi-phase data center campus. Additionally, Hines, a US investor, is expanding its presence in the UK data center sector, extending its reach from the United States and Europe. These developments highlight growing investment interest and expansion within Europe's data center industry.

Key Players

  • Vantage Data Centers
  • Hines

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