The U.K. data center market was valued at USD 7,921.6 million in 2023 and is expected to grow to USD 9,324.6 million by 2030, with a compound annual growth rate exceeding 2.4%.
The industry's growth is largely driven by the widespread adoption of cloud-based solutions and services. These solutions offer numerous benefits, such as ample storage, enhanced data security, access to various computing resources, and energy and cost savings at a low price.
According to a government agency, the U.K. is a leading market for cloud solutions and services in Europe, with public cloud services generating over USD 10 billion in revenue in 2022.
A significant trend in this industry is the increasing use of renewable energy sources to power data centers. The International Energy Agency (IEA) reports that the U.K. aims to reduce its greenhouse gas emissions by at least 68% from 1990 levels by 2030 and achieve net-zero emissions by 2050. Data centers are expected to become carbon-neutral by around 2030.
Awareness of using renewable energy to reduce carbon emissions and promote sustainable living is growing rapidly.
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Key Insights
In terms of revenue, the IT infrastructure category dominated the industry in 2023, accounting for approximately 70% of the market. This trend is expected to continue throughout the decade, primarily because IT infrastructure is crucial for these facilities, leading to significant investments in this area.
By 2030, the co-location type will be the largest contributor to the industry, with around a 45% share. This is due to the flexibility and cost-effectiveness these data centers offer, allowing owners to upgrade to higher bandwidths and meet increased traffic demands without frequent capital expenditures. The cost of bandwidth decreases as data usage spikes, leading to higher acceptance rates.
The IT & telecom category is projected to lead the industry in 2030, with a 35% share. This growth is driven by the ongoing deployment of advanced applications and software in the IT sector and the emergence of new startups. The telecom sector has seen a rise in mobile internet users, creating a substantial need for data storage. Technologies like IoT and 5G are expected to further drive growth in the IT & telecom sector, generating significant data volumes and boosting the market.
The healthcare category is anticipated to grow at the highest compound annual growth rate of 3.0% in the coming years. This growth is attributed to the increasing importance of data storage in the healthcare sector.
The U.K. data center industry is highly fragmented due to the presence of numerous companies. The continuous entry of new players impacts both new and established service providers.
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