The data center market - France (2024)

1.2 A growing global market dominated by the United States

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 and *G.

Data center market size 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 USA 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 of data centers. This can be ...

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 ****-****.

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

The chart above illustrates the trend 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 ****.

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.

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

Data center capacity France, ****-****, in terabytes Source: ****

Above is a graph showing the evolution of French data center capacity in terabytes. It correlates with the overall expansion of the industry, as capacity ...

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 containment 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

The figures below represent data for the IT segment cloudsegment within data centers.

Types of services subscribed to by enterprise customers of cloud computing services Europe and France, ****, in Source: ****

In ****, the most common subscription service in data centers is file storage (***). Email and databases are also important services.

Use of paid cloud computing solutions by industry sector Europe and France, ****, in % Source: ****

With regard to the previous graph, the above data confirms the need for data centers in industries where technology integration is already high. This is the case, for example, in the information and communications sector.

At the same ...

2.2 Advanced computing and 5G boost demand 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 ...

2.3 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 Demand from SMEs

The graph below shows a breakdown of data center customers worldwide.

Breakdown of companies using data centers to bring applications online Worldwide, ****, in Source: ****

This data shows that SMEs (***), and so they outsource the service.

In second place, we find enterprises (***). We can therefore conclude that smaller companies are more likely to use data centers.

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, increasing 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 were all acquiring data ...

3.2 France's investment in digitization will stimulate the creation of data centers

There are a number of points to consider when estimating where the French data center market is heading in terms of capacity, investment and expansion.

First of all, France is already an attractive target market: it's the third-largest ICT market in Europe. What's more, its workforce is highly qualified, as the country boasts the highest number of science graduates in Europe. As a result, many major companies have set up R&D divisions in France[***].

Paris is also France's main data center. Today, the city accounts for over **% of all data centers in the country in terms of center volume.

Finally, digitization is a cornerstone for the government, which is investing considerable sums to promote this transition. For example, since ****, France has been committed to a ** billion euro investment plan, with the ultimate goal of equipping the entire country with broadband by ****.[***] A further *** million euros has been deployed for R&D as part of the "Investments in the Future" project, which includes security and cloud computing.

More recently, in September ****, the French government announced a massive new stimulus package to the tune of *** billion euros, of which * billion euros will be allocated to digital investment over the years **** and ****. This ...

3.3 French data centers are located around Paris

Companies' enthusiasm for Cloud Computing has led to a strong demand for data centers in Paris: financial institutions in particular.

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

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

Regional distribution of neutral data centers in France France, ****, in deliverable IT power Source: ****

French and international operators have already deployed *** MW in the Paris region.And the offer is diversifying and intensifying:

the main companies offering retail colocation solutions are Equinix, Interxion and KDDI Telehouse those offering wholesale colocation are : DATA*, Scaleway, Colt Data Centre Services and CyrusOne numerous interxion or site extension projects are underway in France: interxion project (***) at La Courneuve site extensions at Marcoussis (***)

Overall, France is home to a large number of data center customers, as shown in the graph below:

Ranking of cities by number of data center customers (***) World, ****, in units Source: ****

In ****, Paris hosted the *ᵉ largest number of customers in the world, with **,*** companies. Again, this is due to the city's connectivity.

Finally, as previously mentioned, the USA, along with China, dominate the data center industry. Below is an overview of the world's largest wholesale and colocation data centers.

Top five wholesale data center providers Worldwide, ...

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 vary according to location

Data center prices vary widely, from €** per month for a basic dedicated server at OVH to several thousand euros per month. They differ from company to company and from country to country.

In addition, the price depends on the technical characteristics of the offer given to the end customer, which include:

RAM capacity (***); Stock availability ; Bandwidth : Number of IP addresses ; Access time ; Number of licenses ; Percentage of shelves used.

On the other hand, companies need to implement strict control over variable costs, the most important of which is energy. Energy prices vary depending on the time of day (***), but also on the energy source used - renewable, nuclear or fossil - and the market price at that time. given that the data center is generally an energy-intensive locationintensive, companies can enter into a fixed-price power purchase agreement with a local electricity supplier for several consecutive years.

Construction costs

Below is a comparison of data center prices worldwide, in ****:

Source: ****

The table above includes the three best-performing venues and their prices. in Paris, the price was $*.* per person.

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 cost analysis

Analysis of operating costs

According to a **** report by the U.S. Chamber Technology Engagement Center (***), not least because of the IT equipment. In the typical data center considered in the report, the initial investment is around $*** million for a **,*** m² data center. Around **% of the investment is in hardware. The construction phase of such a data center lasts from ** months to * years, and gives rise to around $** million in salaries.

On the other hand, operating expenses (***) are costs incurred during the lifetime of a data center. The graph below illustrates the importance of energy in this context, accounting for **% of costs. This factor is a source of considerable uncertainty, as the price of energy is an external factor that is difficult to control

Maintenance, administration and other expenses are the second largest cost category (***).

Data center operating expenses Worldwide, ****, % Source: ****

The risk of fluctuating energy prices

Soaring electricity prices threaten data center players, but asymmetrically according to their size: the largest players can buy in advance at times when the price is most attractive.

In January ****, Interxion announced a **% increase in its tariffs, reflecting the rise in electricity prices in ****.

Smaller players, on the other hand, are subject to price ...

4.5 The challenges facing data centers

The security challenge

Data has become a source of covetousness, and data centers need to respond to the security challenge and raise their level of protection against attacks. We are therefore seeing an increase in "Zero Trust" IT architectures to prevent anyone from connecting to the network, and homomorphic encryption that does not decrypt the data it processes.

The challenge of ever-increasing demand

The need for fast, intensive calculations, whether in relation to the IoT or AI, is becoming ever greater: this is driving data centers to improve their infrastructures.

The energy challenge

There's no denying that the digital sector is one of the country's biggest consumers of electricity. In ****, data centers consumed an average of * TWh per year in France, more than the city of Lyon alone, for example[***].

Another source reports that a data center consumes on average the same amount of electricity as a city of **,*** inhabitants. In ****, data centers in France accounted for *% of the country's electricity consumption. [***]

Figures from **** estimate that data centers in France consume an average of *.** MWh/m²/year. This means that a **,*** m² consumes as much as a city of **,*** inhabitants.

in the future, it is estimated that the energy consumption of ...

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