The Evolution of Enterprise IT: Why Colocation Matters More Than Ever
As digital infrastructure becomes more complex, more businesses are moving away from traditional on-premise deployments in favour of colocation. This OPEX-based model allows enterprises to host critical IT systems in purpose-built, professionally managed data centres—freeing them from the burden of maintaining their own facilities.
Colocation is especially valuable for organisations adopting hybrid and multi-cloud strategies, where flexibility, uptime, and interconnection are essential. In Europe, where data protection and regulatory compliance are top priorities, choosing the right colocation provider isn’t just a technical decision—it’s a strategic one.
United Kingdom: One of Europe’s Most Mature Data Centre Markets
The United Kingdom remains a colocation stronghold within Europe. As of early 2025, the UK hosts over 500 operational data centres, with London accounting for more than 200 of these facilities. The city consistently ranks in the top tier of global data centre markets, both in terms of installed capacity and interconnection density.
According to the Knight Frank & DC Byte 2024 European Data Centre Report, London is on track to surpass the 1,000 MW milestone, solidifying its status as a “gigawatt market” alongside Frankfurt, Amsterdam, and Dublin. The market continues to be driven by demand from hyperscale cloud providers, SaaS platforms, financial services, and AI/ML workloads, particularly in central and West London campuses like Slough, Docklands, and Park Royal.
London’s Strength as a European Interconnection Hub
Despite Brexit, London colocation remains a critical gateway for data and cloud traffic between the United States, continental Europe, and Africa. The city serves as a key junction for transatlantic submarine cables, as well as terrestrial networks linking to Amsterdam, Frankfurt, Paris, and Dublin.
London offers:
- Carrier-neutral colocation facilities with access to hundreds of network providers
- Presence of all major public cloud platforms, including AWS, Microsoft Azure, Google Cloud, Oracle Cloud, and IBM Cloud
- Dense connectivity to leading internet exchanges such as LINX, LONAP, AMS-IX, DE-CIX, and NL-ix
- One of the world’s most advanced financial services and fintech ecosystems, requiring ultra-low latency and high availability
These advantages make London not just a regional hub, but a globally relevant location for digital infrastructure.
Colocation Demand Driven by Emerging Tech and Sector Growth
London’s data centre ecosystem is being reshaped by several transformative trends:
- Fintech & Financial Services
As the global capital of fintech, London is home to thousands of start-ups, investment firms, and digital banks. These organisations require low-latency connectivity, high-speed trading capabilities, and resilient infrastructure to support data-heavy operations. - Artificial Intelligence & High-Performance Computing
The rise of generative AI and machine learning is creating demand for high-density colocation environments. Enterprises require robust power and cooling systems capable of supporting GPU-intensive workloads. - Streaming, Gaming, and SaaS
Media streaming platforms, online gaming services, and software-as-a-service providers are scaling rapidly across Europe. These industries rely on edge-ready colocation in London to reduce latency and improve performance for users across EMEA. - Cloud and Hybrid IT
Organisations across sectors are adopting hybrid cloud architectures, using colocation as a landing zone for direct connections to hyperscale cloud providers. London’s cloud ecosystem supports this approach with built-in cloud on-ramps and network exchange fabrics.
Choosing the Right Colocation Provider in London
When evaluating a colocation provider, it’s essential to look beyond just rack space and power. Today’s businesses need interconnection-rich facilities with scalable infrastructure, security, and automation capabilities.
Here are key considerations:
- Certifications & Compliance: Look for facilities certified to standards such as ISO 27001, ISO 9001, and SOC 2, which help ensure data protection and operational integrity.
- Carrier & Cloud Access: Does the facility provide direct access to major carriers and cloud service providers (CSPs) via private interconnection or cross-connects?
- Network Ecosystem: Is the site connected to Internet Exchanges (IXs) like LINX, LONAP, DE-CIX, AMS-IX, and France-IX for optimised peering and routing?
- Disaster Recovery & Redundancy: Tier III or higher facilities should provide N+1 redundancy, backup power, fire suppression, and physical security to mitigate risk.
- Sustainability Commitments: With increasing ESG requirements, facilities using renewable energy, liquid cooling, and energy-efficient infrastructure will help meet corporate sustainability goals.
Comparison: Colocation in London vs On-Premise Hosting
| Criteria | Colocation in London | On-Premise Hosting |
| CapEx vs OpEx | Operational expense model | High upfront capital investment |
| Connectivity | Access to hundreds of carriers, clouds, IXs | Limited – requires extra investment |
| Latency | Ultra-low latency due to IX and metro fibre | Higher and less consistent |
| Security & Compliance | Built-in certifications and 24/7 monitoring | Must be implemented and managed in-house |
| Disaster Recovery | Geographic and infrastructure redundancy | Typically single-site vulnerability |
| Scalability | Elastic growth – scale up/down as needed | Physical limits and longer provisioning time |
London’s Role in Enabling Global Expansion
As a top-tier European interconnection point, London gives businesses access not only to the UK, but also to:
- Western Europe via direct metro and long-haul links to Paris, Amsterdam, and Frankfurt
- North America, with low-latency routes to New York, Ashburn, and Toronto
- Africa and the Middle East, via submarine cable systems and transit networks
This global reach, combined with strong local expertise and infrastructure, makes London colocation a critical enabler for digital-first organisations expanding across EMEA.
Conclusion: A Foundation for Growth in a Connected Economy
London remains one of the most critical hubs for European interconnection—linking enterprises to cloud, carriers, and customers across the continent and beyond. Epsilon’s colocation facility in London delivers ISO-certified infrastructure, dense network connectivity, and direct access to leading cloud platforms and IXPs. Combined with our Infiny platform, you can interconnect seamlessly to over 280 global data centres and scale your digital operations with agility and confidence.
Contact us today to discover how Epsilon Colocation in London can support your hybrid IT strategy and unlock new growth opportunities across Europe.
