U.K. Data Center Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2024-2030)

U.K. Data Center Market Trends & Drivers

Utilization of Renewable Sources of Energy in Power Data Centers Is Biggest Trend

• According to an article by the International Energy Agency (IEA), the U.K. has a goal to reduce its economy-wide greenhouse gas emissions by at least 68% by 2030 from 1990 levels and reach net-zero levels by 2050. Data centers, specifically, are expected to become carbon-neutral by approximately 2030.
• The awareness regarding the use of renewable sources of energy to reduce carbon emissions and have a sustainable lifestyle has been growing rapidly. Moreover, there are certain regulations that mandate companies employing 250 or more employees or a certain amount of turnover to report their power usage, to comply with the Energy Savings Opportunity Scheme (ESOS).
• There is another regulation wherein the companies are required to comply with and report under the Streamlined Energy and Carbon Reporting (SECR) scheme. Moreover, companies are adopting sustainable approaches such as green roofs, installation of solar panels, and planting orchards in and around data centers.

Rampant Adoption of Cloud-Based Solutions and Services in U.K. Is Key Market Drivers

• Cloud-based solutions and services offer various benefits to organizations, such as data security, ample storage, cost and energy savings, and access to various computing resources, at a low cost. According to a government agency, the U.K. is one of the largest markets for cloud solutions and services in Europe, with revenue from public cloud services amounting to more than USD 10 billion in 2022. Moreover, as per some industry experts, companies that have adopted cloud solutions have reported a significant increase in efficiency, as well as the modernization of their IT infrastructure.
• Since cloud services are provided through data centers, as they have the related essential infrastructure, a rise in the demand for cloud-based solutions would subsequently lead to an increase in the demand for such premises.

Frequent Disruptions in Power Supply and Connectivity Are Prominent Challenges

• According to the International Energy Agency (IEA), 1–1.5% of the global electricity usage can be attributed to data centers and data transmission networks. Due to the high workload on data centers, their energy usage is increasing.
• These facilities need access to a continuous supply of electricity to function. A lag in power supply or downtime can lead to data loss, file corruption, and damage to equipment, which can have a critical impact on organizations’ business operations. In case a power failure occurs in a data center, the uptime is huge, which may hamper the market growth. Thus, power backup systems, such as UPS or generators, are essential to prevent any interference in data center operations.

U.K. Data Center Industry Outlook

Infrastructure Type Insights

• In terms of revenue, the IT infrastructure category held the larger share, of around 70% in the U.K. data center market in 2023, and it will continue to dominate the infrastructure segment over the forecast period. This can be attributed to the fact that the IT Infrastructure serves as the backbone of such facilities; therefore, substantial expenditure goes into procuring it.

During the study, we analyzed two infrastructure types in the report:

• IT Infrastructure (Larger Category)
• Support Infrastructure (Faster-Growing Category)

Type Insights

• The co-location type is projected to hold the largest share, of around 45%, in 2030. This can be attributed to the cost-effectiveness and flexibility provided by these data centers to move to higher bandwidths, which enables owners to meet the demand for higher traffic without repeatedly making capital investments.
• Additionally, since spikes in data come from a large number of users in these facilities over time, bandwidth costs are significantly reduced, and thus, they have a higher adoption rate.

The types covered in the report are:

• Co-Location (Largest Category)
• Hyperscale
• Enterprise (Fastest-Growing Category)

End User Analysis

• The IT & telecom category, under segmentation by end user, is likely to hold the dominant market share, of 35%, in 2030. The main reason for this is the continuous deployment of advanced software and applications in the IT service industry and the establishment of several startups across the nation.
• Meanwhile, the telecom sector has witnessed a surge in the count of mobile internet users, which has created a massive demand for data storage in the past few years. The advent of technologies such as 5G and IoT is expected to drive growth in the IT & telecom industry, thereby creating substantial data volumes and, in turn, propelling the U.K. data center market in the coming years.
• The healthcare category is projected to witness the highest CAGR, of 3.0%, during 2024–2030 in the market. The growth is attributed to the increasing importance of data storage in the healthcare industry.
• Additionally, government regulations, such as the EU 2016/679, have made it essential for public and private healthcare service providers across Europe to maintain electronic health records of patients and protect their privacy.

Below are the end users covered in the report:

• BFSI
• IT & Telecom (Largest Category)
• Healthcare (Fastest-Growing Category)
• Government & Defense
• Others

U.K. Data Center Market Share

The market has a high degree of fragmentation owing to the presence of many players. The continual appearance of new entrants is impacting the established and new service providers. The U.K. data center market growth is attributed to the huge volumes of internet traffic and the presence of several cloud service providers in and around London.

Furthermore, the key markets in the nations are closer to IT and financial hubs. Hence, the majority of the data centers are located in regions such as London, Southeastern U.K., and Northwestern U.K. Besides, the majority of the internet traffic in the kingdom is being exchanged at the key internet hubs in the major cities, including Manchester, Liverpool, and Slough. In addition, the market has significantly grown in the East Midlands and West Midlands regions, which continue to attract key telecom companies, internet providers, and cloud service providers.

U.K. Data Center Market News

• In December 2022, Eaton Corporation plc expanded its suite of cybersecurity services and leveraged its global partnership with Tenable Inc., which helps customers take steps to protect their businesses.
• AIREDALE INTERNATIONAL AIR CONDITIONING LTD. has unveiled its Optimiser solution, a controls package that delivers optimal performance throughout the cooling system in large data centers using chilled water, to meet the industry demand for sustainable, stable, and secure cooling. This is in response to the shift of these facilities toward complex variable flow primary-only chilled-water systems.
• In December 2022, ABB Ltd. completed the divestment of its remaining 19.9% equity stake in the Hitachi Energy joint venture, which was formed when Hitachi acquired an 80.1% stake in ABB’s Power Grids business in 2020, to Hitachi Ltd.
• In October 2022, SPIE UK signed an agreement to be acquired by Imtech, which is jointly owned by Dalkia and EDF.