2017 is shaping up to be another strong year for the data center market. There are a number of fast growing technologies which will need to be housed in data centers. AI (Artificial Intelligence) and VR (Virtual Reality) are great examples of potential future drivers for the data center market. The VR market is estimated at $117bn by 2020 – growth of 75% a year 2016-22 – and AI at an incredible $3,000bn by 2025.
The deployment of 5G mobile technology is set to create over two million jobs and generate EUR 113.1 billion a year of benefits for the European economy by 2025, according to an European Commission supported study.
It is difficult to talk about the market in 2017 without understanding that cloud changes everything. Much focus has been on the demand from cloud, and particularly hyperscale cloud, players which constitute up to 75% of the demand in some European markets. However, the impact is much broader, from future usage of colocation facilities to new delivery models to competitive positioning.
In previous years, many colocation players benefited from simply having availability in the right location, but cloud is accelerating the disparity between winners and losers. Size is not everything, but having a global footprint and cross-selling opportunities is clearly a major advantage. We are also seeing more success from providers with a more focused and differentiated approach, particularly where they can show real business benefits to their target market.
BroadGroup Consulting, a leading international reasearch and consulting group in data center, works a lot with Investors, and their new report analyses their perception of the market, likely future changes, and analyses valuations and key investor metrics. While it is positive that there is growing acceptance and understanding of data centers as an asset class, and different types of investors who are interested in the market, many of the investors have the same concerns and reservations. The report analyses how to ensure that a business model can be attractive to different investors.
Finally, what about market size and growth? The report has over 70 figures and detailed analysis by country. Overall, they believe the colocation market in Western Europe will grow to ~€13.5bn in 2020, with a CAGR of ~11%.
The seventh annual BroadGroup Consulting Western European data center, hosting and IaaS report, 2015-2020, analyses 19 countries and key trends, providers and user issues in the market.
To discover more about the European data center market, you can purchase the Broadgroup Consulting report here.
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