The United Kingdom colocation market will grow at a CAGR of 6.50% from US$2.467 billion in 2022 to US$3.852 billion in 2029.
Colocation holds the potential of a significant upliftment of floor space in the United Kingdom where the data center usage has shifted from residential addition to industrial sites fueled by the ongoing MNC establishments, and Industry 4.0 initiatives, followed by investment in digitizing the economy. However, capacity challenges, high capital costs, and regulations due to sustainability concerns are posing a challenge to market growth.
Market Drivers
Digital transformation has become a part of today’s economic development and the UK government realizing the ongoing shift towards technology is implementing schemes to bolster technological advancement & adoption in its industry verticals. For instance, the new digital and data strategy launched by the UK government officials in June 2022 to bolster the system and services transformation of sectors by 2025.
Additionally, rising internet penetration and booming tech0savy population have further bolstered the demand for high-speed bandwidth both for residential and commercial establishments which has also stimulated the overall market expansion, since colocation services offer additional physical spaces for racking data produced through high internet traffic.
The ongoing trend of 5G adoption is on the rise in the United Kingdom where the British government is showing full support to enhance such network access in the country. For instance, according to the April 2023 press release, the Department of Science, Innovation and Technology unveiled its new “Wireless Infrastructure Strategy” which involved the establishment of a 5G innovation fund of £40 million that would bolster 5G adoption in public services and business thereby enabling them to use advanced wireless connectivity.
UK government has laid out a blueprint to provide the country with the most reliable wireless 5G standalone coverage. By 2030, the government aims to provide 5G access to at least 77% of the UK’s population.
The United Kingdom colocation market-based enterprise size is divided into small, medium, and large in which the large enterprise is expected to constitute a considerable market share and is forecasted to grow at a constant rate.
Large firms account for a major portion of total employment in the United Kingdom, and with MNC companies undertaking new investments in the country, the strength of large firms is expected to grow at a steady pace. According to the UK parliament’s business statistics, in 2023, large businesses strength stood at 8,000 and they accounted for 39% of the overall employment.
Key Developments
Segmentation: