As enterprises embrace digitalization, cloud computing will soon grow to half the country’s data center capacity, ISG Provider Lens report says
Enterprise demand for cloud computing in Germany is growing so fast that it will represent more than half of the country’s data center capacity by 2025 – up from about a third – according to a new research report published by Information Services Group, a leading global technology research and advisory firm.
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“German companies’ growing use of managed services, especially IT and business process outsourcing, is part of a boom happening across much of Western Europe”
The 2022 ISG Provider Lens™ Next-Gen Private/Hybrid Cloud — Data Center Services & Solutions report for Germany finds the increasing demand for cloud services is being driven by enterprises investing in digitalization, especially to improve their resilience and agility. This trend is part of a steadily growing IT and business services market in Europe, including a 24 percent year-over-year increase in managed services in the first quarter of 2022.
“German companies’ growing use of managed services, especially IT and business process outsourcing, is part of a boom happening across much of Western Europe,” said Alexandra Classen, EMEA partner at ISG. “The biggest demand is for infrastructure services and application development and maintenance.”
The need for colocation data centers in Germany is rising as both enterprises and managed hosting providers increasingly rely on them, the report says. One reason is that more companies are beginning to need low-latency networks with a maximum latency of 35 milliseconds, which colocation facilities are better equipped to provide.
German companies’ mass migration to the cloud is reflected in the growing volume of traffic through the country’s network nodes and the increasing size of new data centers, ISG says. The throughput of the DE-CIX node in Frankfurt, one of the world’s largest, increased from 9.1Tbit/s in 2020 to 10Tbit/s in 2021. Nodes in Hamburg and Munich saw similar increases. New data centers need to be big enough to consume 5 megawatts or more to be profitable, and there are now 90 of these facilities in Germany, supplying half the country’s data center capacity.
Recognizing the huge energy requirements of data centers, which consume about 3 percent of Germany’s electricity, operators are introducing modern passive cooling systems and increasing the energy efficiency of data center computing, the report says. The average Power Usage Effectiveness (PUE) of a new data center was 1.63 in 2020 but has since fallen to 1.3 and below — with 1 being the ideal score.
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The report also explores other trends in private and hybrid cloud use in Germany and beyond, including the growing importance of multi-cloud and multi-platform computing landscapes and the challenges of compliance.
The 2022 ISG Provider Lens™ Next-Gen Private/Hybrid Cloud — Data Center Services & Solutions report for Germany evaluates the capabilities of 100 providers across six quadrants: Managed Services for Large Accounts, Managed Services for Midmarket, Managed Hosting for Large Accounts, Managed Hosting for Midmarket, Colocation Services for Large Accounts and Colocation Services for Midmarket.
The report names PlusServer as a Leader in three quadrants. It names Arvato Systems, Atos, Axians, CANCOM, Claranet, DATAGROUP, Deutsche Telekom (TDG), Kyndryl, q.beyond and T-Systems as Leaders in two quadrants each. The report names Accenture, All for One Group, Capgemini, Computacenter, CyrusOne, Datacenter One, DXC Technology, Equinix, Fujitsu, Infosys, Interxion (Digital Realty), ITENOS, KAMP, maincubes, Materna, myLoc (WIIT), noris network, NTT DATA, NTT Global Data Centers, Pfalzkom, Rackspace Technology, STACKIT, Telehouse and TelemaxX as Leaders in one quadrant each.
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