Data centres are an increasingly critical part of the infrastructure for a digitised society. Digitisation, high-speed wireless networks, new data-intensive technologies and the growth of cloud computing have transformed the data centre from a few computing enterprises to a major industry sector. The sector continues to rapidly grow, offering business users the ability to migrate from a capital-intensive investment to a pay-as-you-go, scalable service, which has proved even more popular in the uncertain economic climate, created firstly by Brexit and now by COVID-19.

• How the market growth has been stimulated by the wider economic uncertainties surrounding both Brexit and COVID-19.

• How edge computing will further expand the demand for data centres, supported by the ongoing rise of cloud computing.

• Why 5G and the Internet of Things (IoT) will continue to drive the exponential growth of data generation and analysis.

• Why the sector commands strong earnings before interest, taxes, depreciation and amortisation (EBITDA) and therefore is a highly attractive investment to third-party financial operators.

A data centre (sometimes spelled ‘datacentre’) is a centralised repository, either physical or virtual, for the storage, management and dissemination of data and information organised around a particular body of knowledge or pertaining to a particular business. A data centre is a dedicated space where companies can keep and operate most of the information and communication technology (ICT) infrastructure that supports their business, including the servers and storage equipment that run application software, and process and store data and content. For some companies, it might be a simple cage or rack of equipment. For others it could be a room housing a few or many cabinets, depending on the scale of operation.

The space will typically have a raised floor with cabling ducts running underneath to feed power to the cabinets and carry the cables that connect the cabinets together.

The environment is controlled in areas such as temperature and humidity to ensure both the performance and operational integrity of systems. Facilities generally include power supplies, backup power, chillers, cabling, fire and water detection systems and security controls.

Data centres can be in-house, located in a company’s own facility, or outsourced with equipment colocated at a third-party site. Outsourcing does not necessarily mean relinquishing control of equipment; it can include a facility to house that equipment.

A private data centre may exist within an organisation’s facilities and be maintained as a specialised facility. Under such a definition virtually every organisation has a data centre, although it might be referred to as a server room or a computer closet. This report is concerned with centres that are used for rental to other companies. These are typically referred to as a colocation centre (also spelled ‘co-location’, or ‘colo’). In this definition the data centre has equipment, space and bandwidth available for rental to customers.

All values quoted in this report are at current prices unless otherwise specified.

The term ‘billion’ refers to ‘one thousand million’.

It is also expedient to identify the terminology of data sizes:

1,000 megabytes = 1 gigabyte

1,000 gigabytes = 1 terabyte

1,000 terabytes = 1 petabyte

1,000 petabytes = 1 exabyte

1,000 exabytes = 1 zettabyte