What does the UK data centre market look like in 2024? A Comprehensive Overview of Growth and Trends

The UK data centre market is booming in 2024. Many companies are building new facilities nationwide, showing how vital data centres have become for businesses and the economy.

The United Kingdom data centre market size reached about £8.1 billion in 2023 and is set to grow to £12.7 billion by 2032. This fast growth comes from more people using online services and cloud computing. Companies need places to store and process all this data.

You might wonder why this matters to you. Data centres affect many parts of your daily life. They power the websites you visit, the apps you use, and the online services you rely on. As the UK builds more data centres, it could mean faster and more reliable internet services for you and your business.

Market overview

The UK data centre market is experiencing robust growth in 2024. You’ll find a mix of established players and new entrants competing for market share. High demand for cloud services and data storage is driving expansion.

Size and forecast

The UK data centre market reached £8.2 billion in 2023. It’s projected to grow at a 5.1% yearly rate through 2032; by that year, it could be worth nearly £13 billion.

In terms of capacity, the market is set to reach 2,190 MW in 2024. This is expected to grow to 3,610 MW by 2029. That’s a significant jump in just five years.

Major players include:

• Digital Realty Trust
• Equinix
• NTT Ltd
• Rackspace Technology
• Virtus Data Centres

Growth drivers and trends

AI is a key driver of data centre growth. There is increased demand for AI-powered services across industries, which requires massive computing power and data storage.

Renewable energy is becoming crucial. Many data centres are investing in green power sources. This helps reduce costs and meet sustainability goals.

The UK government supports the sector’s growth by offering incentives for data centre construction in certain areas. This is part of its efforts to boost the digital economy.

Modular data centres are gaining popularity. They offer flexibility and quick deployment. The global modular data centre market is set to triple in size by 2030.

Regional analysis

The UK data centre market shows distinct geographical patterns. London remains the dominant hub, but other regions are becoming important facility locations.

London data centres

London is the heart of the UK’s data centre industry. The city hosts many facilities, with major providers like Equinix operating multiple sites.

Slough, just outside London, is another key area. Due to its proximity to the capital and good connectivity, it’s home to numerous data centres.

Many companies choose London for their primary data storage needs. The city offers:

• excellent fibre connectivity
• access to skilled IT workforce
• proximity to financial institutions

Distribution across the UK

While London dominates, data centres are spreading across other UK regions. This shift aims to improve network performance and reduce reliance on a single area.

Key developments include:

• edge networks expanding to serve local markets
• new facilities in cities like Manchester and Birmingham
• the Humber Technology Park emerging as a growing cluster

Proximity Data Centres are building regional facilities to serve local businesses. This helps reduce latency for users outside London.

The trend towards geographical diversity is likely to continue. It supports better disaster recovery options and meets a growing demand for local data processing.

Operational infrastructure

The UK data centre market 2024 features advanced facilities and efficient power solutions, which support the growing demand for digital services and data processing.

Facility specifications

UK data centres now offer Tier 3 and Tier 4 facilities. Tier 3 centres provide 99.982% uptime, while Tier 4 centres boast 99.995% availability. Many locations have increased raised floor space, with some facilities expanding to over 10,000 square metres.

IT load capacity has grown to meet rising demand. Many centres now support loads of 20 MW or more. This allows you to run more servers and process larger amounts of data.

Security measures have also improved. Most sites offer advanced access controls, 24/7 monitoring, and multi-factor authentication.

Power and cooling solutions

Power management is a key focus in UK data centres. You’ll see a shift towards more efficient cooling systems and reduced energy waste. Many facilities now use liquid cooling for high-density racks.

Backup power systems are robust. Multiple generators ensure continuous operation during grid outages and are often tested weekly for reliability.

Renewable energy use has increased. Many centres now have bespoke power purchase agreements for clean energy. You might find solar panels on rooftops or contracts with wind farms. This helps reduce the carbon footprint of your data storage and processing.

Market segmentation

The UK data centre market 2024 is divided into segments based on service type, enterprise size, and tier type. These categories help businesses find the right data centre solutions for their needs.

By service type

Data centres in the UK offer various services to meet different business requirements. Colocation services are popular, allowing companies to rent space for their servers and networking equipment. This option saves on infrastructure costs and maintenance.

Managed services are another key segment. These provide expert support for network management, security, and backup tasks. Many firms choose this option to reduce IT workload and access specialised skills.

Hyperscale colocation is growing rapidly. It caters to large tech companies and cloud providers who need massive computing power. These facilities offer advanced cooling, power, and connectivity features.

By enterprise size

Data centre services cater to businesses of all sizes in the UK market. Small and medium enterprises (SMEs) often opt for flexible colocation or managed services. These options allow them to scale their IT infrastructure without significant upfront costs.

Large enterprises have different needs. They may use a mix of colocation, managed services, and private data centres. Some big companies are building their facilities to have more control over their data and operations.

Cloud providers and tech giants fall into the hyperscale category. They require massive data centres to support their global operations and services.

By tier type

UK data centres are classified into tiers based on their reliability and performance. Tier 1 and Tier 2 data centres are more straightforward and less expensive. They suit smaller businesses or those with less critical data needs.

Tier 3 facilities are more common. They offer better uptime and redundancy, making them suitable for most enterprise applications. These data centres have multiple power and cooling paths.

Tier 4 data centres are the most advanced and secure. They provide 99.995% uptime and full redundancy. Financial services, healthcare, and other industries with strict data requirements often use Tier 4 facilities.

Key market players

The UK data centre market features several significant companies leading the industry. These firms employ various strategies to expand their presence and meet growing demand.

Company profiles

Equinix is a key player in the UK data centre landscape. The company operates multiple facilities nationwide and offers a wide range of services.

Digital Realty Trust Inc. is another major provider known for its large-scale data centres and global reach.

NTT Ltd has a strong presence in the UK market, providing advanced data centre solutions to businesses of all sizes.

Ark Data Centres focuses on high-security facilities, catering to government and enterprise clients with strict data protection needs.

CyrusOne and Vantage Data Centers are also expanding their UK operations, adding to the competitive landscape.

Market strategies

Companies in the UK data centre market are pursuing aggressive growth strategies. Many firms are building new facilities to meet rising demand (23 data centre companies recently announced 29 new projects).

Acquisitions and mergers are common as more prominent players seek to expand their market share quickly. This consolidation helps companies offer more comprehensive services to clients.

Providers also invest in green technologies to make their data centres more energy-efficient. This approach appeals to environmentally-conscious clients and helps reduce operating costs.

Some companies specialise in specific sectors, like financial services or healthcare, to differentiate themselves in a crowded market.

Sector-specific demand

The UK data centre market in 2024 sees strong demand from key sectors. These sectors drive growth and shape the industry’s landscape, each with unique needs and challenges.

BFSI sector

The banking, financial services, and insurance (BFSI) sector is a significant player in the UK data centre market. This sector needs robust, secure facilities to handle sensitive financial data.

The BFSI sector’s digital transformation partly drives data centre growth. Banks and insurers are moving more services online, requiring more computing power.

Financial firms often choose data centres with high-security standards. They look for facilities with multiple layers of physical and cyber protection.

The BFSI sector also demands low-latency connections. This is crucial for real-time trading and financial transactions.

Media and entertainment

The media and entertainment industry is another key driver of data centre demand in the UK. This sector needs massive storage and processing power for content creation and streaming.

Streaming platforms, gaming companies, and content producers rely heavily on data centres. They need facilities that can handle high-bandwidth operations and store large media files.

Edge computing is becoming more critical for this sector. It helps reduce latency for streaming and gaming services.

The rise of 4K and 8K video content pushes the need for even more data centre capacity. Virtual and augmented reality applications are also increasing demand.

Government initiatives

The UK government plays a significant role in shaping the data centre market. Its initiatives aim to boost digital infrastructure and improve public services.

The UK Government’s G-Cloud Programme is a key driver. It helps public sector organisations access cloud computing services more efficiently.

Government data centres must meet strict security and compliance standards, which often require the creation of specialised facilities.

The push for smart cities and e-governance is increasing demand for data centres. These projects require robust digital infrastructure to support various services.

Edge computing is also gaining importance in government initiatives. It helps process data closer to where it’s generated, improving efficiency.

Technological advances

The UK data centre market is being shaped by AI and edge computing advances, along with the rollout of 5G networks. These innovations drive new capabilities and growth in mobile internet usage and e-commerce.

Artificial Intelligence and edge computing

AI will transform UK data centres in 2024. Many facilities are adopting AI-driven operations to boost efficiency and performance, including AI-powered cooling systems and predictive maintenance.

Edge computing is gaining ground, too. It brings data processing closer to where it’s needed, reducing latency. You’ll see more edge data centres popping up across the UK to support applications like:

• autonomous vehicles
• smart cities
• Augmented Reality (AR)

These edge networks help businesses handle the massive amounts of data IoT devices generate. They also improve response times for time-sensitive applications.

5G and internet growth

The ongoing 5G rollout is fuelling demand for data centre services. 5G networks require more distributed infrastructure, leading to growth in smaller, localised data centres.

This expansion supports:

• faster mobile internet speeds
• more connected devices
• new IoT applications

E-commerce continues to grow, driving demand for robust data centre infrastructure. Online retailers need reliable, high-performance hosting to deliver seamless shopping experiences.

The number of mobile internet users in the UK is rising. This trend increases data traffic and storage needs, further boosting the data centre market.

Sustainability and energy

The UK data centre market is making significant sustainability and energy efficiency strides. Providers are adopting renewable sources and improving operations to reduce environmental impact.

Adoption of renewable sources

Data centres in the UK are increasingly using renewable energy. Many facilities now power their operations with wind, solar, and hydroelectric sources. This shift helps cut carbon emissions and meets growing demands for green computing.

Some centres have on-site renewable generation, while others buy green energy through power purchase agreements. These steps are crucial as the sector grows and uses more power.

Providers are also exploring new tech, such as hydrogen fuel cells, which could offer clean, reliable backup power.

Data centre efficiency

UK data centres are working hard to use energy more wisely. They’re using smart cooling systems that adjust based on workload and weather, cutting waste and reducing costs.

You’ll see more centres using hot and cold aisle containment. This setup boosts cooling efficiency by separating hot and cold air flows.

Rack space is also being used more cleverly. Denser server configurations allow more computing power in less space, which means less energy spent on cooling and lighting large areas.

AI is playing a significant role in efficiency. It helps manage workloads and predict maintenance needs, keeping things running smoothly and saving energy.

Economic impact

The UK data centre market will substantially contribute to the economy in 2024. Investment is flowing into new facilities, creating jobs and boosting local economies. Despite fierce competition, the UK’s position remains strong compared to other European countries.

Investment and employment

Data centres are driving significant economic growth across the UK. Major tech companies invest heavily in new facilities, particularly outside London. These mega projects create thousands of jobs, from construction to ongoing operations and maintenance.

For every direct job in a data centre, several more are created in supporting industries. This multiplier effect boosts local economies, and small and medium-sized businesses also benefit from the increased demand for services and supplies.

The sector attracts skilled workers, offering competitive salaries and career advancement opportunities. Training programmes are helping to address skills gaps and prepare the workforce for future technologies.

Comparison with European neighbours

When you compare the UK’s data centre market to its European neighbours, you’ll see it’s holding its own. The UK remains a top choice for many global tech firms due to its robust infrastructure and favourable business environment.

France and Germany are strong competitors, with both countries investing heavily in their digital infrastructure. The Netherlands, with its Amsterdam hub, continues to be a significant player in the European data centre landscape.

Despite Brexit uncertainties, the UK market is projected to grow at a healthy rate of 5.1% annually through 2032. This growth rate is comparable to other leading European markets, showing the UK’s resilience and ongoing appeal to investors.

Frequently Asked Questions (FAQs)

The UK data centre market is seeing significant changes in 2024. New trends are shaping the industry as demand grows and locations expand.

How has the demand for data centre capacity evolved in the UK by 2024?

Demand for UK data centres has risen sharply by 2024. The market is expected to reach 2.19 thousand MW this year. This growth stems from increased digital services and cloud computing needs. Companies are seeking more space and power for their IT infrastructure. This has led to a boom in new facility construction.

What are the latest trends in the UK data centre industry as of 2024?

AI-driven operations will transform UK data centres in 2024, making facilities smarter and more efficient. Sustainability is another key focus, as data centres are adopting green technologies to reduce environmental impact.

Which locations in the UK are experiencing the most significant growth in data centre developments?

London remains a central hub for data centre growth. However, other regions are also seeing increased activity. New projects are underway nationwide, and 23 companies have announced 29 new facilities.

How is the UK’s data centre market performing compared to the rest of Europe in 2024?

The UK continues to be a leading data centre market in Europe. Its strong digital economy and stable infrastructure make it attractive to providers. Growth rates in the UK are outpacing those of many other European countries, reflecting the ongoing demand for data services in Britain.

What impact is the UK’s economic and real estate outlook having on the data centre sector?

The UK’s economic outlook is influencing data centre investments. Despite some challenges, the sector remains resilient. Real estate costs are a factor in data centre planning. Some providers are looking at locations outside major cities for more affordable options.

What are the anticipated changes in IT staffing and management within UK data centres?

IT staffing in UK data centres is evolving. There’s a growing need for AI, automation, and cloud technologies skills. Remote management is becoming more common, allowing data centres to operate with leaner on-site teams.