The data center market - France (2024)

1.2 An expanding global market dominated by the United States of America

The global data center market is valued at $***.* billion in ****, and is expected to grow at a CAGR of *.**% over the following period. This is impressive growth, fuelled by increasing demand for data centers caused by the digitization of the world, increasingly advanced technologies and the development of technologies such as edge computing, *Gand, above all, artificial intelligence.

Size of the data center market World, ****-****, in billions of dollars Source: ****

From a global point of view, here's the ranking of countries with the largest number of data centers in the world: the United States dominates by far, concentrating ** times more data centers than Germany, which ranks second.

Number of data centers by country World, ****, number of data centers Source: ****

The market in terms of volume is totally dominated by the USA. We can now zoom in a little further, within individual states, to determine which are the most important clusters in the world.

The rankings below, reported by Cushmangives us a ranking of the world's leading data centers, based on several aspects, including real estate:

Northern Virginia Silicon Valley Dallas Chicago New York/New Jersey Singapore Amsterdam Los Angeles Seattle London

This ranking confirms North America's global dominance in terms ...

1.3 The French market is expanding

According to the INSEE classification "Data processing, hosting and related activities" NAF code: **.**Z, which perhaps broadens our market perimeter a little, and which takes into account sales excluding VAT, we can establish the market size of data centers in France.

Growth in sales of data processing, hosting and related activities France, ****-****, millions of euros Source: ****

We can see that the data center market is growing steadily and dynamically, with an average annual growth rate of *.**% over the period ****-****. Between **** and ****, market expansion will also accelerate, with growth of *.**%.

Number of large data centers France, ****-*****, in units Source: ****

The chart above illustrates the growth in the number of large data centers in France, including both cloud computing servicescloud computing and hosting (***). Between **** and ****, the number of sites increased by **%, reaching around *** in ****. By ****, there will be *** centers in France.

Thecloud computingin particular, has been the driving force behind the need to build new centers, facilitated and stimulated by the presence of American giants such as IBM, Salesforce and Amazon. Today (***), data center construction is driven primarily by the development of artificial intelligence.

For co-location, the main players in France are Equinix, Interxion, OVH, etc.

Data center capacity France, ...

1.4 The crucial role of data centers in the age of global pandemics and the rise of teleworking

In ****, when confinement made teleworking compulsory, the entire communications sector underwent a veritable upheaval in its organization due to an exceptional increase in Internet traffic.

Crucial to maintaining network stability, data centers were given critical infrastructure status in some countries during the Covid-** crisis. This is due in particular to the sensitive or strategic nature of the information they store, especially for a state's public affairs.

Data centers are the technological foundation of everything we do: every command carried out by a device (***) connected to the Internet needs to seek information in a data center. This information passes through antennas, telecoms networks, power grids, Internet exchange points and data centers. None of these infrastructures can be made independent of the others.

Internet traffic trends France, ****-****, Tbit/s Source: ****

In the first half of the year, Internet traffic jumped by a spectacular +**% as a result of the first confinement in France. We recall that some streaming platforms had to reduce the resolution of their programs to protect the national network.

2.1 Data-intensive sectors and services dominate demand

The datacenter is essential to the operation of networks: otherwise a website or mailbox wouldn't work. It can be operated internally or externally, with the support of service providers. It provides IT services and enables software to function.

Standardizing Internet usage and data consumption

As of June **, ****, Internet statistics show that there are more than *.** billion active Internet users worldwide - representing **% of the world's population - a number that grew by *,***% between **** and ****.(***)

What's more, the world's population is consuming more and more data, thanks to new uses such as video, e-commerce and social networking.

The digitization of companies

By ****, French businesses will be adopting cloud computing services in a variety of ways. Cloud computing as a whole is used by **.**% of businesses, while specific services such as cloud email and cloud office software are used by **.**% and **.**% respectively. Accounting software in the cloud and ERP (***) in the cloud are less adopted, with rates of **.**% and *.**% respectively.

Customer relationship management (***) systems in the cloud are used by *.**% of companies, and cloud security services by **.**%. Finally,cloud database hosting remains relatively moderate, with an adoption rate of **.**%.

Rate of use of cloud computing services by French companies (***) France, ****, % of total Source: ...

2.2 Cloud services usage rates by company size

Data on the use of cloud computing services by company size in **** reveals several important trends: Less than ** assets: These small businesses show relatively low adoption of cloud services, with a cloud adoption rate of **.*%. Services such as customer relationship management (***), are also less used by this group. ** to ** employees: These mid-sized companies show a more marked adoption of cloud services, with a cloud computing adoption rate reaching **.*%. Cloud file storage(***) remain less widely used. More advanced cloud services are also more widely adopted than for smaller companies, with cloud database hosting at **.*% and digital platform for cloud application development at *.*%. ** to *** employees: Companies of this size are significant adopters of cloud services, with cloud computing at **.*%. Cloud ERP(***), are adopted by a significant proportion of companies. Cloud computing power reaches **.*%, and the digital platform for cloud application development is used by **.*% of companies in this group. *** and over: Large companies are the most advanced in the adoption of cloud services, with a cloud computing usage rate of **.*%. These companies make extensive use of all cloud services, with particularly high rates for services such as cloud e-mail(***), and show a marked interest in sophisticated services. Cloud database hosting reaches **.*%, and the ...

2.3 Private data centers prevail

How organizations are meeting their demand for advanced IT capacity World, ****, in Source: ****

The chart above illustrates the different types of data center most in demand. We note that in **% of cases, companies use their own data centers (***). This may be because it excludes third-party costs, and therefore saves money. But if it's their own center, it still requires significant initial investment and maintenance costs. These costs, as we'll see in the next section, therefore encourage smaller companies with less cash capacity to outsource the service.

The second most common solution is to use a mix of private and third-party data centers. This reduces costs without excluding the possibility of independent storage. Finally, only **% of the market is linked to complete outsourcing.

Types of application hosting by company size World, ****, in Source: ****

The chart above shows that pure data centers are mostly used by medium-sized companies, while cloud services are the most popular overall, with **% used by SMEs.

Generally speaking, companies often use cloud services of hybrid origin:

Types of cloud used by companies World, ****, in Source: ****

2.4 5G, a growth driver for data centers

According to Les Echos, several key aspects will be the main drivers of data center demand in the future:

*G The fifth-generation wireless network standard will see the expansion of the mobile Internet into the Internet of Things (***), home automation and smart cities. What's more, efficiency is set to increase: throughput should be improved by a factor of ten, and transmission time divided by ten. For the IoT, SCC forecasts that **% of demand will be for cloud computing systems. **% to traditional hosts and **% to local data providers.

Number of *G antennas France, **** Source: ****

We can see here that not all operators have the same strategy: Free, for example, has deployed a massive installation of *** MHz antennas, which help to cover a large number of people with *G, but whose throughput is lower (***) than that of higher-frequency antennas. It's a sort of proximity strategy, since *** MHz antennas have a shorter range than others. in contrast, Orange is currently relying on a less dense antenna network, but with each antenna delivering superior performance: throughput is *** Mbit/s for *.* GHz antennas and * Gbit/s for the *.* GHz frequency band.

Cutting-edge computing Advanced computing is a category of computing that encompasses digital modeling and ...

2.5 Artificial intelligence: a new demand vector

Artificial intelligence, by its very nature, requires data centers to operate. The development of Artificial Intelligence on a global scale is therefore a source of growth for the data center market. The Paris summit, held on February ** and **, ****, demonstrates French and European ambitions in this area.

The Paris Summit on Artificial Intelligence :

The Summit for Action on Artificial Intelligence (***), held in Paris on February ** and **, ****, was a key moment to discuss investments and the future of AI on a global scale. The event, co-organized by France and India, saw major announcements on infrastructure investments and strategic partnerships to support the development of AI, while facing increasing competition from tech giants from the US and China. Here are the main investment measures taken: Data centers: a major part of the *** billion euros of private investment in AI announced by French President Emmanuel Macron will be devoted to the construction of data centers. These infrastructures will be essential for storing data and providing the computing power required by AI. The United Arab Emirates, via the MGX fund, will invest ** billion euros to build a giant gigawatt data center in France, in a campus dedicated to AI. Canadian fund Brookfield plans to invest ** billion ...

2.6 Geographic location: an important factor in demand

The choice of location for a data center is crucial to guarantee optimum performance, energy efficiency and future development. Here are the essential criteria to consider:

Connectivity and bandwidth: A good location requires a high-speed Internet connection with multiple fiber optic providers to minimize latency and ensure reliable data transfers. Areas such as Northern Virginia or the *Africa submarine cable in Africa are examples of strategic locations thanks to their density of fiber connections. Climate and cooling: Cooler climates reduce the need for artificial cooling, thus cutting energy costs. Dublin and Scandinavia are examples where the naturally cool climate reduces cooling energy costs, attracting major technology companies. Energy availability and sustainability: Access to renewable energy sources is crucial to sustainability. Cities like Frankfurt, with its commitment to green energy, are important hubs, as are some Southeast Asian countries, which are investing in solar and wind projects to power their data centers. Political and economic stability: Stable regions with clear regulations offer a secure environment for data centers. Singapore is an example of a politically stable and well-regulated location, although space constraints are driving investment to neighboring areas such as Johor in Malaysia. Natural Disaster Risk: Areas with a low risk of ...

3.1 An increasingly concentrated sector

Today, there are some *** data centers in France. The market represents a mix of foreign and local players.

Access to initial financing is very important, as it is the initial cost (***) that is most important, with revenues guaranteed by growing demand.

On a global scale, the industry has been affected by the strong involvement of investment funds and the growing number of mergers and acquisitions, particularly in the strategies of American and Asian companies seeking to establish themselves in Europe. Consolidation through mergers and acquisitions in particular has increased in parallel with the growth of cloud services, which in turn has increased demand for data centers, as cloud services rely on data centers. This in turn requires greater investment and industry restructuring.

Evolution of data center transactions by private equity funds Worldwide, ****-**** Source: ****

Below is an overview of some of the key events that have had an impact on the French market:

source: datacenterknowledge, Financial Times, capacitymedia, borad group

The largest investors were Digital Realty Trust and Equinix. In total, they accounted for **% of the total value of transactions over the ****-**** period.

In addition, CyrusOne, Iron Mountain, Digital Bridge/DataBank, NTT, GI Partners, Carter Validus, GDS, QTS and Keppel ...

3.2 Market structure

The trend in the number of companies in the IT hosting services sector in France, from **** to ****, shows moderate growth. In ****, the number of companies was ****, and increased slightly over the years to reach **** in **** (***). Despite these fluctuations, the IT hosting services sector showed stable growth over the period, with relatively small variations from one year to the next.

Change in the number of employees in NAF code **.**Z France, ****-****, Companies Source: ****

The trend in the number of employees in the IT hosting services sector in France, from **** to ****, shows continued growth. In ****, the number of employees was **.*** thousand, and has risen each year to **.*** thousand in **** (***). Thus, the IT hosting services sector has seen steady growth in the number of employees throughout this period.

Growth in the number of employees in NAF code **.**Z France, ****-****, thousands of employees Source: ****

In ****, the data center industry in France showed a specific distribution of job types. Women accounted for **% of the workforce. Managers accounted for a significant **%, indicating a strong presence of profiles with responsibilities in this sector. Technical professions accounted for **% of jobs, underlining the importance of specialized skills in data center operations. Finally, external jobs, such as service providers ...

3.3 French data centers are located around Paris

The popularity of Cloud Computing among businesses has led to a strong demand for data centers in Paris, particularly among financial institutions.

The focus here is on carrier-neutral data centers (***).

In ****, the distribution of neutral data centers in France shows a particularly high concentration in the Île-de-France region, with ** centers, making it the dominant region for data infrastructure. This is followed by Hauts-de-France with ** sites, and Auvergne-Rhône-Alpes with ** centers. Other regions such as Provence-Alpes-Côte d'Azur (***) and Bretagne have ** and * data centers respectively, while regions such as Corse, Centre-Val de Loire and Grand-Est have *, * and ** centers respectively. The regions of Normandie, Nouvelle-Aquitaine and Occitanie also boast notable infrastructures, with * centers each, while Pays de la Loire boasts ** sites. Finally, Monaco, despite being a small territory, has * neutral data centers. This distribution reflects the growing geographical diversity of the French data center sector.

Distribution of data centers in France France, ****, in units Source: ****

The map below shows the capacity of French data centers available by region:

3.4 Cloud computing and data storage - a disruption?

We need to distinguish between traditional on-prem data centers and cloud computing services, which also use data centers, but in a different way. For example, on-prem data centers require substantial initial investment in hardware. In contrast, cloud services require an organization to pay for the portion of hardware it uses only[***].

Below is an overview of the advantages and disadvantages of on-prem service data centers, cloud services and hybrid IT services.

Source: ****

Breakdown of paid cloud IT services by type France, ****, in Source: ****

Low-level services include, for example, email, office software and file storage. High-level services include accounting and finance software, customer relationship management and computing power. Finally, intermediate services include database hosting.

In France, the cloud computing market in **** will be worth ** billion euros. SaaS (***) accounts for around **% of this value[***].

4.1 Data center services

In this study, we have broken down the definition of a data center into two segments: (***) host service providers and cloud providers. The decomposition can be continued through the following:[***]

Cloud; SaaS ; PaaS ; Hybrid Cloud ; Data centers.

Most of the European market is focused on colocation, hosting and low-end and high-end managed services.

Finally, data centers encompass a variety of services, components and activities In particular, the services offered on OVH and the Equinix website are as follows:

Web hosting ; Analysis and certification services; Automation processes; Computing, storage and virtual space; Data center network; Data center routing and interconnection; Web security ; Operational support center ; Technical training services; Outsourcing services.

4.2 Prices

In order to analyze datacenter prices in France, we'll base our analysis on the offer presented by Datalok. Datalok is a marketplace platform dedicated to the rental of datacenter space. It simplifies the process for datacenter owners and companies looking for infrastructure tailored to their needs.

For datacenter owners, Datalok enables them to list their infrastructures online, adding information on technical characteristics, location and certifications. They can then configure their offers by defining the available space (***), electrical power, connectivity and rates. The interface also enables qualified requests to be received, prospects to be managed and customer contracts to be tracked.

For businesses, Datalok offers an advanced search engine to quickly find datacenters matching criteria such as location, power, certifications and budget. Companies can compare offers, consult detailed technical information, and contact owners directly to schedule visits and manage contracts via a centralized interface.

The platform offers simplified management thanks to an intuitive interface and customized dashboard. It also offers dedicated support, with technical experts on hand to help users with everything from finding infrastructure to negotiating contract terms. Datalok is thus positioned as a facilitator in the datacenter market, enabling both companies and infrastructure owners to connect, while simplifying the management ...

4.3 Factors determining data center location

Real estate and physical considerations

Development pipeline The development of a potential data center depends on a number of factors, including sufficient electrical power, land accessibility, good financing possibilities, credible customers, and so on. In general, Singapore, London, Silicon Valley, Dublin and Northern Virginia are the best locations in this respect. Environmental aspects Data centers need to be able to operate in spite of natural disasters such as hurricanes, earthquakes, floods and so on. For example, many parts of Europe and parts of North America are almost entirely free of such phenomena. Land prices Many factors contribute to the impact on price, not least physical availability, but also proximity to data ecosystems. These aspects are becoming increasingly difficult to manage, as data centers continue to grow in size. Percentage of unused (***) infrastructure in the data center Low vacancy means high demand, which means higher prices. Northern Virginia has one of the lowest vacancy rates (***) in its centers, compared to Milan with around **%. Paris has around **-**%, placing the city in the upper percentiles in terms of vacancy.

Ecosystem benefits

Cloud availability Cloud services enable companies to outsource data storage. This applies to small businesses, where the costs often outweigh the benefits. ...

4.4 Operation and energy costs

By ****, data center construction will account for around **% of total infrastructure costs, while other costs, including equipment, operation and maintenance, will make up the remaining **%. This underlines the importance of the initial investment in construction, but also the significant share of recurring costs associated with the ongoing operation and management of the data center.

Share of data center construction costs in total data center costs. France, ****, % Source: ****

Data center costs are influenced by several factors, mainly linked to construction, energy consumption,operation, personnel and energy transition. Here's an overview of the main expenses associated with operating a Data Center:

Construction costs: The construction of a Data Center represents around **% of the total cost. Construction costs can range from €*,*** to more than €**,*** per square meter, depending on local conditions and labor. Some companies prefer to re-use existing facilities to reduce this cost. Hardware costs: The IT equipment, including servers, network systems and power supplies, can account for a significant proportion of expenditure. A basic server costs around €*,***, while top-of-the-range models can cost up to €**,***. Hardware can be purchased or leased, reducing initial investment costs. Cost of energy consumption: Data Centers consume a great deal of energy, with an average of * kW per ...

4.5 Industry trends

In ****, data center managers in France expressed a number of major concerns that would influence their ability to grow and meet the challenges facing the sector. Among the most striking concerns, **% of respondents pointed to difficulties in recruiting and retaining human resources, an issue that remains central in a competitive labor market. This was followed by rising energy costs (***), both of which had a direct impact on the profitability and competitiveness of data centers. The general economic situation in France was also a source of concern for **% of executives, who were adapting to an unstable economic environment.

The issue of building permits represented a challenge for **% of industry players, sometimes putting the brakes on infrastructure expansion. At the same time,increasing environmental regulations (***) rounded out the concerns expressed by executives.

These concerns reflected the constant pressure faced by data center companies, who had to navigate between operational, economic and social challenges to maintain their competitiveness and meet market demands.

Top concerns of data center managers France, ****, % of total Source: ****

Decarbonization:

By ****, **% of data center companies in France had implemented a decarbonization trajectory, underlining the importance of this issue in the sector. In particular, decarbonization is a priority, as energy accounts for ...

5.1 French and European regulatory framework

European and national legislation can influence the direction of data center market expansion in France. There are three main regulations to be complied with

Data protection laws (***); Energy efficiency and emission limits (***) ; Data center compliance with third-party standards (***)

a) Law n°**-** of **** on information technology, data files and freedoms (***) Decree no. ****-**** of **** This law includes F France's requirement to disclose information about the location of data, obliging companies to store and process a copy of the extent of the data locally. These policies create a kind of barrier to digital commerce. In recent years, the French government has sought to promote a local data center infrastructure, which some have dubbed "the sovereign cloud". Energy efficiency regulations must be applied to all facilities in line with the national program in response to EU directives. This can lead to an increase in the cost of purchasing equipment (***) and can force companies to comply with CO* emissions from the cooling system, in line with the following protocols: ISO **** ; ISO ***** ; PCI DSS ; ISO / IEC ***** TIA-*** on Data Center Standards. This document provides an overview of data center standards and describes the requirements for data center infrastructure. The levels range from * to * and are ...

6.1 Segmentation

• OVH
• AWS Amazon Web Services
• ILIAD
• EQUINIX
• Interxion
• APL Data center
• Jerlaure
• Wattdesign
• Adista - Inherent
• Etix Everywhere
• Data4 service
• Marseille, Hub digital
• Altice
• Celeste Telecom
• Opcore Scaleway (Iliad Groupe)
• Google Cloud
• Microsoft Azure
• Schwartz Group (Lidll Kaufland, Schwartz Digit)
• Snowflake Computing
• XEFI
• NTT Nippon Telecom
• Evernex
• Green4Cloud
• Colt Technology Services France
• Telehouse France
• RITTAL
• RARITAN