-- While the outsourcing model remains popular, service providers face cultural, language and regulatory barriers
LONDON, July 21, 2014 /PRNewswire/ -- The cost advantage of outsourcing as well the growth in cloud, machine-to-machine connectivity and content-heavy applications is lending momentum to the European data centre services market. As companies look for ways to process an escalating amount of data without the hassle of managing an in-house data centre, the uptake of data centre services will continue to rise. In fact, the market is expected to see a compound annual growth rate of 16 per cent up to 2018 despite several restraints. The United Kingdom, Germany, France and Benelux will be the largest markets in the region.
New analysis from Frost & Sullivan, European Data Centre Services Market, which covers the retail colocation and managed hosting segments, finds that retail colocation will witness lower growth rates than managed hosting due to its market maturity. The retail colocation segment generated revenues of $2.83 billion in 2013 and is estimated to reach $5.27 billion in 2018; managed hosting revenues will increase from $2.01 billion to $4.90 billion over the same period.
"The pressing need to focus internal resources on innovative IT tasks and capitalise on economical IT management services compel enterprises to turn to managed hosting providers for data centre services," says Frost & Sullivan Information and Communication Technologies Research Analyst Shuba Ramkumar. "The growth of cloud services will also drive the colocation services market in the short term."
In the long term, however, increasing efficiency and security of the cloud will challenge the growth of the retail colocation market.
In addition, organisations across Europe are bound by regional data laws that complicate decisions with respect to availing outsourcing services. The location of data centres, therefore, becomes an important consideration for users when choosing a provider. The regional nature of European organisations also means that many of them are wary of foreign companies and prefer local providers. These cultural and language barriers are especially strong in countries such as France, Spain, and Italy.
"In order to widen their customer base across Europe, it is important for providers to offer services from a data centre located within a region," advises Ramkumar. "At the same time, they must provide efficient IT support as well as ensure data confidentiality and security to win the trust of potential customers."
Due to the need to implement different infrastructure frameworks based on application type, enterprises will use traditional data centre services alongside the adoption of cloud services. As a result, the European data centre services market is focussing on more hybrid data centre services that combine colocation, managed hosting and cloud solutions.
If you are interested in more information on this study, please send an e-mail to Edyta Grabowska, Corporate Communications, at email@example.com, with your full contact details, company name and website, city, and country.
European Data Centre Services Market is part of the Telecom Services (http://www.ipcommunications.frost.com), Growth Partnership Service program. Frost & Sullivan's related studies include: Cloud in European Vertical Markets, Analysis of the European Infrastructure-as-a-Service Market, Latin American Managed Security Services Market, Data Centre Market in Gulf Cooperation Council Countries, and APAC Unified Communications as a Service Market. All studies included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.
About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today's market participants.
Our "Growth Partnership" supports clients by addressing these opportunities and incorporating two key elements driving visionary innovation: The Integrated Value Proposition and The Partnership Infrastructure.
- The Integrated Value Proposition provides support to our clients throughout all phases of their journey to visionary innovation including: research, analysis, strategy, vision, innovation and implementation.
- The Partnership Infrastructure is entirely unique as it constructs the foundation upon which visionary innovation becomes possible. This includes our 360 degree research, comprehensive industry coverage, career best practices as well as our global footprint of more than 40 offices.
For more than 50 years, we have been developing growth strategies for the global 1000, emerging businesses, the public sector and the investment community. Is your organisation prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies?
European Data Centre Services Market
Corporate Communications – Europe
P: +48 22 4816203
SOURCE Frost & Sullivan