Experts from Telehouse believe that deepening partnerships, stricter regulations, and AI-driven innovation will reshape the data centre industry in 2025.

As the UK’s data centre industry braces for unprecedented growth, the impact it is set to have on the nation’s economy and digital infrastructure is becoming increasingly clear. According to the latest techUK report, data centres have the potential to contribute an additional £44 billion to the UK economy by 2035.

This impressive expansion is being fuelled by rapid technological advances, especially in artificial intelligence, with demand for data centre capacity at rates projected between 10% and 20% per annum. Indeed, this surge in the need for extra capacity underlines the sector’s pivotal role in advancing both economic and technological progress across the UK.

However, growth at this scale brings with it new challenges. From evolving customer relationships, to regulatory shifts and sustainability concerns, the coming year will require data centres to adapt quickly.

Deeper partnerships between colocation providers and customers

Nick Layzell, Customer Success Director, believes that colocation providers and customers will form a deeper bond. As he explains, “The relationship between colocation providers and customers is on the brink of a significant transformation, moving from a transactional model to a partnership-based approach.

“Historically, customers requested power, space and cooling, however the rise of hyperscalers and expanded cloud services have triggered demand for help with regulatory compliance, real-time monitoring, and other integrated capabilities.

“In highly-regulated sectors, such as finance, this shift is particularly pronounced, creating both challenges and opportunities for innovation. Rather than acting solely as service vendors, colocation providers are expected to deliver tailored support that meets evolving digital demands.

“This deeper, partnership-based approach not only builds stronger client relationships but also positions providers to respond more effectively to emerging market challenges. As both parties work in tandem, the industry can expect smoother operations and a more resilient infrastructure that keeps pace with the rapid evolution of technology.”

Stricter oversight driven by DORA and other regulations

Regulations are set to continue to dominate the industry landscape, according to Sarah Draper, General Counsel and Chief Risk Officer. She comments, “The implementation of the Digital Operational Resilience Act (DORA) earlier this year has already begun reshaping regulatory expectations, offering a prime example of how new compliance requirements are driving change in the data centre industry. The new EU regulation is designed to fortify financial organisations against cyber-attacks and is likely to usher in stronger operational resilience for the financial services sector and their ICT partners including data centre operators.

“As a result, collaborative relationships with financial services will deepen, evolving into transparent risk assessments and robust incident response measures. The industry will also see greater investment in specialised compliance teams and cutting-edge security tools to meet evolving standards. This heightened regulatory focus, in turn, is likely to boost trust in data centres among businesses and end-users who depend on safe, stable digital environments: reflecting a broader commitment to safeguarding critical infrastructure over the long term.”

Expect the AI explosion to turn up the heat (both figuratively and literally) 

Turning to the technological challenges, Ozgur Duzgunoglu, Senior Design and Engineering Director, explains that “the explosion of AI will force data centres to make decisions about cooling technology. According to McKinsey, the demand for AI-ready data centre capacity is projected to grow at 33% annually up to 2030 in a midrange scenario.

“By 2030, approximately 70% of the total demand for data centre capacity will be for facilities capable of supporting advanced AI workloads. These projections are serving as a wake-up call for operators to invest in next-generation infrastructure solutions. signalling the urgent need to invest in next-generation infrastructure solutions.

“As AI-driven demand for high-capacity computing surges alongside the evolution of edge computing, data centre operators will inevitably run up against the limits of traditional air-cooling systems. Liquid cooling technology is poised to take centre stage as operators seek effective solutions to dissipate the heat generated by ever more intense data processing.

“In response, many operators are exploring hybrid cooling methods that balance efficiency with risk management, ensuring both enhanced performance and system reliability. However, transitioning to liquid cooling comes with challenges including the potential for leaks, which could lead to catastrophic hardware failures.

“Rigorous planning, robust supply chain management, and open communication with customers about their evolving needs will be critical to successful implementation of these advanced cooling systems. Liquid cooling could ultimately help operators achieve energy efficiency and sustainability targets, positioning the industry to meet future technological and environmental challenges.”

Data centres will move to centre stage, following CNI classification

Mark Pestridge, Executive Vice President and General Manager, thinks that the Critical National Infrastructure classification from the Government will prove transformative for the industry. He notes, “Last year’s Government designation of UK data centres as critical national infrastructure marks the beginning of a new era for the industry, reflecting the country’s increasing reliance on digital services. This classification will help data centres receive enhanced government support during cyber-attacks, IT outages, or extreme weather events, minimising disruption to critical services.

“Research by Telehouse, however, indicates that a significant portion of the UK public are unaware of the vital role data centres play in their daily digital lives, with 67% admitting they ‘do not know what a data centre is or does’.

“This knowledge gap must be overcome to avoid opposition to growth, boost recruitment and improve relations with data centre neighbours. As a result, we are likely to see expansion of public education campaigns that clearly articulate the importance of these facilities.

“As awareness of data centres’ importance increases, and new opportunities for specialists emerge, the industry could see a surge in recruitment. techUK analysis projects that if the UK can increase data centre supply above its recent 10%-to-15% annual growth rate, it could unlock 40,200 additional and often high-paid data centre operational roles by the year 2035. As data centres expand, operators will have to invest strategically in communities, building relevant partnerships in areas such as employment and education to foster mutually beneficial relationships.

Data centres will deepen community ties and address skills gaps

Judy Gosnell, VP Human Resources, predicts that 2025 will see the data centre industry work to deepen the ties it has with local communities across the UK. It will also be the year that more progress is made towards addressing the skills gap, a constant issue for the market. As she explains, “It is important for companies to go beyond philanthropy in addressing the skills shortage. By introducing enhanced apprenticeship models and training programmes, they can equip young people with practical technical skills that help close the skills gap. Furthermore, by partnering with local colleges and universities, the data centre industry can ensure it is ready to produce the skilled engineers it will undoubtedly require in the coming years.

“Volunteering initiatives and community engagement programmes, such as designated ‘giving back’ days, are likely to become more widespread. These efforts will enable data centre teams to contribute meaningfully to local projects and charitable causes, including STEM workshops, mentoring schemes, and technology donations.

“The adoption of flexible working practices, aligned with equality, diversity, and inclusion goals, will help to broaden recruitment strategies, ensuring access to a richer talent-pool, while simultaneously building stronger links with local communities. Such initiatives will not only reinforce the status of data centres as critical infrastructure providers but also underline their role as socially responsible employers dedicated to community well-being and sustainable growth.

“The year ahead is set to be one of significant change and growth for data centres, requiring them to adjust quickly to the evolving needs of customers, communities, and emerging technologies. If they succeed, the benefits will ripple across society, enhancing prosperity and the overall well-being of everyone involved.”