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However, overall growth rates have been constrained by declining levels of investment in public sector data centres. This has been primarily because of the Government’s long-term Cloud-first policy which favours outsourcing to wholesale and co-location providers in order to reduce expenditure on operating its own data centres.
The impact of the covid-19 outbreak is expected to severely hamper growth in data centre construction output in 2020. However, once the epidemic is over, strong growth will resume, underpinned by the underlying factors driving up greater IT and Internet usage. Demand for data storage, processing and storage is being driven by the increasing levels of online activity, huge growth in the number of connected devices and changes in the way online services are delivered will again only strengthen the usage of colocation as businesses adapt to where the new normal will take us.
London and the M25 region remains the largest data centre cluster, although recently there has been rapid growth elsewhere, with new clusters in Wiltshire, Leicestershire, South Wales and Cambridgeshire. Manchester and Scotland are also becoming more established data centre markets. This been driven by a combination of lower costs, compared to the M25 region and improvements in technology.
The data centre contracting market is very fragmented. While most large M&E contracting businesses are key players, companies involved in data centre construction range from major building contracting groups and commercial developers, to data centre specialists and operators, modular building manufacturers and IT equipment suppliers.
