The EMEA data center colocation market is projected to grow significantly, expanding from USD 29.751 billion in 2025 to USD 51.208 billion by 2030, with a compound annual growth rate (CAGR) of 11.47%. This growth is driven primarily by hyperscale demand and the rapid digital transformation across the region.
Hyperscale Demand and Digital Transformation
The reliance on colocation services is increasing among hyperscale data center users, which include major cloud providers and technology companies. In 2023, notable cloud service providers like Microsoft and Google have leased considerable capacities in urban areas throughout Europe, indicating strong demand for scalable infrastructure. This trend coincides with the Middle East and Africa’s push for digital transformation, propelled by the fourth industrial revolution, the Internet of Things (IoT), and smart city initiatives.
Industry Investments and Expansion
Colocation providers are actively investing and expanding their facilities to cater to the surging demand. For instance, in February 2023, Data4 initiated the development of a new data center in Hanau, Germany, located on a former military base. In the Middle East, companies like Khazna Data Centers are also enhancing their capabilities, with new facilities aimed at meeting hyperscale requirements, reflecting a strategic pursuit of market share in both developed and emerging markets.
Government Initiatives and Regulatory Support
Government initiatives are crucial in stimulating market growth. In 2023, France implemented reductions in energy tariffs for data centers, stimulating further investment. Switzerland’s Federal Act on Data Protection (FADP), which aligns with GDPR, has bolstered investor confidence by reinforcing data privacy standards. Saudi Arabia’s ambitious plan to establish a national network of hyperscale data centers, worth USD 18 billion, further supports market expansion in the region.
UK Market Growth
The UK has emerged as a key player in the colocation market, driven by advancements in Information and Communication Technology (ICT) infrastructure. In 2023, growth was evident in the telecom sector, highlighted by Vodafone’s increasing brand value, which has fueled demand for professional data center services. Government-backed initiatives aimed at enhancing digital infrastructure are expected to maintain this growth trajectory into 2028.
Rapid Growth in the Middle East
The Middle East is experiencing rapid market growth, bolstered by strategic investments. In 2023, Saudi Arabia has made significant strides in advancing its digital infrastructure, with local companies like Gulf Data Hub and Al-Moammar Information Systems contributing to the establishment of hyperscale facilities. The adoption of 5G technology by telecom providers across the region is further stimulating the demand for colocation services, facilitating smart city developments and digital economies in countries such as the UAE and Qatar.
Sustainability Focus
Sustainability is increasingly taking precedence, with colocation providers investing in renewable energy solutions. In 2023, there was a notable rise in the use of solar and other renewable energy sources to power data centers across the EMEA region, spurred by stringent environmental regulations and initiatives like Saudi Arabia’s Vision 2030, which emphasizes the integration of renewable energy sources.
Competitive Landscape
The competitive environment is led by major players such as Equinix, Digital Realty, and Khazna Data Centers through strategic expansion and acquisitions. New entrants like Agility and EDGNEX Data Centres are also making an impact by leveraging existing customer bases. In 2023, providers have concentrated on developing hyperscale and sustainable facilities to align with the evolving market demands.
This comprehensive market forecast underscores the vigorous growth anticipated in the EMEA data center colocation sector, driven by innovative technologies and a supportive regulatory landscape.
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