London Multi-Tenant Datacenter and Hosting Market The largest city in Western Europe, London is also the most diverse in terms of IT service providers. It offers an ideal base to provide colocation, hosting and cloud services to the rest of Europe, while providing a mix of customers. But the UK is a very competitive market, and as the price of floor space in London skyrockets, many service providers are being pushed to the periphery to run their operations. KEY FINDINGS The gentle return to economic growth in the UK has been reflected in the increasing level of demand for managed hosting services and datacenter space in London that is now outstripping supply for the first time since 2009. Consolidation continues to shape 451 Research s European Services: London Market Map TM particularly in the colocation segment, with a number of the top providers buying each other and creating even larger connected networks in the City and continental Europe. London multi-tenant datacenter (MTDC) providers continue to bring new space online at record levels, and we don t see this trend abating in coming years. We are seeing demand for services beyond straight wholesale or retail colocation, and partnerships are being created as a way to deliver on this demand. Small business growth in the service industry is creating increasing demand for more sophisticated, e-commerce based Web and application hosting in the SMB and midmarket sectors, fueled by the availability of 4G and lowcost data tariffs. International hosting firms continue to use London as their European base, expanding their presence via established networks of carrier-neutral hotels into the larger economies of Western Europe. A newly elected Conservative majority government has provided further impetus for business-friendly investment and tax breaks, as evidenced by the surge in shares and value of sterling on May 8, 2015. Government support for the Tech City startup scene in London has started to pay off both hosting and colocation firms say business is growing from an increasing number of new ventures born in Britain, many of which are starting small but aiming high. JUNE 2015
451 RESEARCH REPORT SNAPSHOT TITLE London Multi-Tenant Datacenter and Hosting Market ANALYST RELEASE DATE June 2015 LENGTH Rory Duncan, Research Director, European Services Penny Jones, Senior Research Analyst, European Services 34 pages ABOUT THIS REPORT London is the largest of the four key European metro markets London, Frankfurt, Paris and Amsterdam in terms of opportunity and geographic footprint for hosting and multi-tenant datacenter (MTDC) retail and wholesale colocation services. The demand for space and facilities has increased in recent years, and with it has come the opportunity and pressures to accommodate the need for additional space and services. The London Multi-Tenant Datacenter and Hosting Market report gives readers an overview of the trends that are shaping the MTDC market in and around London and service providers within it.
London Multi-Tenant Datacenter and Hosting Market TABLE OF CONTENTS SECTION 1: EXECUTIVE SUMMARY 1 1.1 INTRODUCTION............................... 1 SECTION 2: THE LONDON MTDC AND HOSTING MARKET 2 2.1 MULTI-TENANT DATACENTERS........................ 2 FIGURE 1: Datacenter Hubs in and around London 2 2.2 MANAGED HOSTING & CLOUD HOSTING....................3 2.3 WEB & APPLICATION HOSTING.........................4 SECTION 3: COMPETITIVE OVERVIEW 5 3.1 MARKET MAP................................. 5 FIGURE 2: 451 Research European Services: London Market Map TM 5 3.2 MARKET SHARE LEADERS AND EMERGING COMPETITION............6 FIGURE 3: Top Providers in London MTDC Space (by Sq Ft) 6 3.2.1 WHOLESALE DATACENTER SPACE 7 FIGURE 4: Top Wholesale Providers in London MTDC Space (by Sq Ft)......... 7 FIGURE 5: Location of Notable Wholesale MTDC Providers for the London Market 8 3.2.2 RETAIL MULTI-TENANT COLOCATION 10 FIGURE 6: Top Retail Providers in London MTDC Space (by Sq Ft) 10 FIGURE 7: Location of Notable Retail Colocation Providers for the London Market 11 3.2.3 HOSTING 13 SECTION 4: MTDCS 17 4.1 SUPPLY & DEMAND.............................. 17 FIGURE 8: MTDC Supply/Demand and Utilization, London 17 4.2 UTILIZATION................................. 18 4.3 PIPELINE................................... 19 FIGURE 9: Announced Pipeline London 19
451 RESEARCH SECTION 5: HOSTING 21 5.1 SUPPLY.................................... 21 5.2 DEMAND................................... 22 FIGURE 10: UK Hosting Market Size and Growth 22 SECTION 6: DISRUPTIVE TRENDS 24 6.1 THE UK ECONOMIC OUTLOOK AND THE CITY OF LONDON........... 24 6.2 M&A AND SERVICE CONSOLIDATION..................... 25 6.3 DATA PROTECTION & PRIVACY CONCERNS................. 26 6.4 THE EFFECTS OF CLOUD HOSTING AND IAAS................. 26 6.5 ECOSYSTEMS AND PARTNERSHIPS..................... 27 SECTION 7: IMPLICATIONS AND OUTLOOK 29 7.1 IMPLICATIONS................................ 29 7.2 OUTLOOK................................. 30 APPENDIX I 31 METHODOLOGY................................. 31 TERMINOLOGY.................................. 32 TAXONOMY.................................. 32 MTDCS...................................... 32 RETAIL COLOCATION............................... 33 WHOLESALE DATACENTER............................ 33 INTERCONNECTION.............................. 34 MANAGED HOSTING............................... 34 INDEX OF COMPANIES 35
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