The state of the UK data centre market (2024–2030 outlook)

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The UK is one of Europe’s true digital powerhouses. From the tech incubators of London and Manchester to data-intensive industries across the UK, a robust digital infrastructure has never been more critical. The backbone of this transformation is the data centres, the silent engines of the modern economy.

With AI, cloud computing and digital transformation now everyday business realities rather than buzzwords, the UK data centre market has taken centre stage. Whether doing business with hyperscalers, startups or public sector networks, the industry is an engine of innovation and growth.

This paper offers an evidence-based overview of the UK data centre landscape. It explores where the market stands today, how it is expected to evolve through to 2030, and the key forces shaping its future. It is designed for analysts, journalists and executives who want to understand the numbers behind the narrative and the opportunities they reveal.

UK data centre market in 2024 - current state

In 2024, the UK’s data centre market was valued at USD 4,009.8 million, holding a 5.8% share of the global market. This statistic highlights the UK’s ongoing strength as a hub for digital connectivity, resilience, and innovation.

Retail colocation is one of the main growth drivers, generating the highest revenue within the sector. This segment is agile in nature, supporting SMEs and growing businesses which need flexible solutions without investing in their own physical infrastructure.

Several forces are fueling this expansion. The adoption of cloud continues to be a significant influence as organisations shift towards hybrid and multi-cloud environments. The growth of enterprise IT outsourcing continues, as firms drive efficiencies and agility. Additionally, there’s also regulatory compliance (especially in terms of data privacy and residency), which makes colocation providers a highly sought-after commodity.

Meanwhile, the broader UK tech ecosystem is evolving rapidly. AI projects are scaling, edge computing is becoming mainstream, and sustainability has moved from aspiration to requirement. Together, these trends are shaping a data centre market that is both dynamic and future-focused.

Forecast to 2030 - growth and market outlook

Looking ahead, the UK data centre market is set for an impressive growth story. By 2030, it’s projected to reach USD 11,253.2 million, expanding at a compound annual growth rate (CAGR) of 19.2% between 2025 and 2030.

By the end of the decade, the UK is expected to lead Europe in colocation revenue. With its position as a major digital infrastructure hub, this would represent a significant achievement. The wholesale colocation segment is forecast to be the fastest growing, driven by rising demand from hyperscalers, large enterprises and government departments with high data workloads.

Several strong currents are propelling this growth. The growing adoption of AI and machine learning is creating demand for far greater computing power and storage capacity. The rollout of 5G networks is also contributing, requiring more robust and distributed data infrastructure. Digital transformation continues to accelerate across key sectors such as finance and manufacturing, further driving demand for outsourced IT environments.

In addition, the move towards cloud-first strategies is resulting in more workloads being migrated from on-premise environments to colocation and cloud data centres. Finally, data residency and sovereignty requirements, particularly in the post-Brexit landscape, are encouraging businesses to host data within the UK’s borders.

Together, these trends point to a clear conclusion: the UK data centre market is not just expanding, it is accelerating and strengthening its position as a global leader in digital infrastructure.

Retail vs wholesale colocation - market segmentation

To determine where the market is headed, it is helpful to consider how colocation is structured. Retail colocation and wholesale colocation are two sides of the same coin; you need both to succeed in this type of environment.

Retail colocation remained the dominant model in 2024. It is the preferred option for SMEs and mid-sized organisations that value flexibility, shared infrastructure and, potentially, shorter contract terms. For example, a fast-growing financial services firm or regional e-commerce business may need a secure, scalable hosting solution without the costs of owning and maintaining an entire data centre. Retail colocation provides exactly that.

At the other end of the spectrum, wholesale colocation caters to hyperscale cloud providers, large telecom operators and multinational enterprises with extensive computing demands. Some of these clients occupy entire data halls or multiple floors, designing bespoke environments for high-density workloads and future expansion..

Looking ahead, wholesale colocation is expected to become the fastest-growing and most lucrative segment of the market. Although retail colocation currently generates the highest revenue, demand for AI, data analytics and high-performance computing (HPC) is driving a shift towards larger-scale, purpose-built facilities. As a result, wholesale data centres are becoming an increasingly vital component of the UK’s digital economy.

The UK’s role in the European and global data centre market

From a broader European and global perspective, the UK’s influence in the data centre industry is both established and expanding. In 2024, it accounted for 5.8% of the worldwide colocation market and continues to strengthen its position as a major international hub.

In Europe, the UK is the fastest-growing market in terms of total colocation revenue and is forecast to outpace other established hubs by 2030. There is strong competition from Germany, the Netherlands and Ireland, each benefiting from mature hyperscale ecosystems and renewable energy infrastructure. However, the UK retains a competitive edge through its combination of connectivity, regulatory stability and enterprise demand.

London is strategically placed in this regard in particular. Being one of the world’s most interconnected cities, it is where financial, media, and cloud activities pulsate. Amsterdam remains a destination for significant data centre investments due to its nature as a densely interconnected network of fibre routes and landings for subsea cables, allowing for proximity to global markets.

Brexit introduced new challenges, particularly concerning data flows and regulatory alignment, yet it also reinforced the importance of strong domestic hosting capacity. The UK has since strengthened its local infrastructure and compliance frameworks, creating a secure and independent base for organisations operating across Europe.

Key takeaways for businesses and analysts

There is a great deal of momentum in the market, and the message is clear: the UK data centre sector remains in strong health. With the growing influence of AI, digital transformation and cloud-first business models, demand for secure and scalable colocation is set to expand significantly beyond 2025.

For businesses, this means easier access to advanced infrastructure without the heavy capital costs of building their own facilities. For investors, it signals a market offering reliable, long-term returns, particularly as wholesale colocation continues to gain traction. For policymakers, it highlights the ongoing importance of supporting sustainable energy, connectivity and data protection frameworks.

Colocation has evolved from an interim step between on-premise and cloud environments into a strategic digital asset. It provides scale, compliance and cost advantages while allowing organisations to concentrate on innovation rather than maintenance.

Looking ahead, the continued rise of AI workloads, the spread of edge computing and the development of greener data centres will be key drivers of growth. Meeting these twin challenges of sustainability and performance will be essential for the UK to maintain its leadership role in Europe’s digital economy.

Shaping the UK’s digital future

From its solid foundations in 2024 to the opportunities on the horizon for 2030, the UK’s data centre market is entering a period of remarkable growth. With a strong retail colocation base, rapid wholesale expansion and rising global influence, the UK is set to remain at the heart of Europe’s digital infrastructure.

One thing remains inevitable as AI, cloud and connectivity advance: data centres will be central to it all.

We’re proud to play our part in this evolution at Datum. Through innovation and a clear focus on the future, we’re helping keep London and Manchester at the centre of global technology investment. For UK businesses, partnering with a provider that enables secure, sustainable growth has never been more important.

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