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The Evolution and Sustainability of the European Data Center Market [Feature Article]

The European data center market is a dynamic and evolving industry, marked by rapid growth, technological advancements, and a strong commitment to sustainability. As we move towards a more digital future, these data centers will play a critical role in powering the internet and various digital services. With their commitment to sustainability and community impact, they are paving the way for a more sustainable and inclusive digital future. JSA Media Consultant João Marques Lima offers a closer look.

The European data center market is a rapidly evolving industry, demonstrating a significant shift towards sustainability dictated not only by the ethics and need to improve energy usage but also investment and financing frameworks. 

This complex and dynamic market is driven by numerous factors, including technological advancements, increasing data demands, and a pressing need for energy efficiency.

It is paramount to understand that data centers are the backbone of our increasingly digital world. They house the servers, storage devices, and networking equipment that power the internet and various other digital services. The European data center market is a vibrant ecosystem, home to various global technology giants such as Meta, Google, and Microsoft.

The continent witnessed a growth explosion over the past decade as the digital transformation of various industries, the demand for secure and efficient data storage and processing capabilities soared. 

The total market size of the Tier I markets in Europe is expected to grow by 17%, adding an extra 432MW in the near future, according to a forecast report by real estate giant JLL. 

This growth is largely driven by the increasing demand for colocation services from hyperscale data center consumers, like large internet businesses and public cloud service providers, it reads in the Europe Data Center Colocation Market Analysis.

The market is characterized by a few key trends including a substantial shift towards hyperscale demand. This trend is likely to persist, with hyperscale demand expected to rise to 83% of all transactions, JLL forecasts. 

Additionally, new and emerging markets are making their mark. While Frankfurt and London continue to expand, new players like Madrid, Milan, Warsaw, Vienna and even Lisbon are experiencing rapid growth, according to research and consulting think tank Structure Research.

With the digital sector accounting for 5 to 9% of global electricity consumption – based on figures from the European Commission Green Policy -, the need for sustainability in the European data center market is more pressing than ever. Data center operators are striving to achieve climate neutrality by 2030, focusing on purchasing 100% carbon-free energy, prioritizing water conservation, reusing and repairing servers, and setting measurable targets for energy efficiency.

With water scarcity becoming a global concern, the data centers in Europe have committed to reducing water usage. The Climate Neutral Data Centre Pact (CNDCP) proposed a goal to cut water usage to a maximum of 400ml per kWh of computer power by 2040. To achieve this, data centers are adopting alternative cooling methods, implementing closed-loop cooling systems, recycling wastewater, and maintaining cooling systems regularly.

The lp-d is not just about business growth. These operators are committed to making a positive impact in the communities they operate in. They support local schools, nonprofits, and community projects through direct funding and volunteering. In addition, they contribute to local economies by creating new construction and operations jobs and sourcing from local businesses. Examples of this lie with, for example, hyperscale operators such as Meta.

Challenging barriers of progress

Despite the rapid growth and progress, the European data center market faces a set of challenges. The most significant ones include the limitation of land and power, and the lack of skilled labor, reports Structure Research. As data centers continue to expand, finding suitable locations and sourcing renewable energy becomes increasingly difficult. 

Additionally, Structure Research says that the requirement for skilled labor to manage these centers often outpaces the available talent pool.

The European data center market is subject to a host of stringent regulations. Data providers have a legal obligation to comply with these standards. Failure to do so can result in shutdowns, fines, and even legal action. 

In addition, the European Commission is working on several initiatives to promote energy-efficient data centers, including conducting studies and linking data centers to policy and funding initiatives as part of the European Commission Green Policy.

With the sustainability drive gaining momentum, the future of the European data center market looks, nonetheless, promising. 

Data centers are expected to continue their growth trajectory, becoming more energy-efficient, reusing waste energy, and increasing their reliance on renewable energy sources, according to European Commission Green Policy. 

In addition, the trend towards hyperscale demand is likely to persist, with the public cloud industry expected to continue its growth and create further demand in the data center industry.

The journey of these data centers is a testament to the power of innovation, sustainability, and progress. It’s a journey that’s only just begun, and one that promises to reshape the digital landscape of Europe in the years to come.

Ultimately, the European data center market is not just about powering the digital economy; it is about powering a sustainable and inclusive digital future.

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