WASHINGTON, Feb. 15, 2023 (GLOBE NEWSWIRE) -- The Global Data Center Colocation Market is valued at USD 50.1 Billion in 2021 and is projected to reach a value of USD 105.4 Billion by 2028 at a CAGR (Compound Annual Growth Rate) of 13.2% over the forecast period 2022-2028.
Market Overview
The growing digitization of various industries, together with the rising adoption of hybrid cloud computing and virtualization systems, is one of the major reasons driving the market’s rise. The growing adoption of secure, scalable, and trustworthy infrastructure for business continuity and data recovery requirements is another driver fueling the market's growth.
We forecast that the IT and colocation category in Data Center Colocation market sales will account for more than 35% of total sales by 2028. A significant proportion of this market is related to the growth of mobile internet users and the industry's ongoing development of new software and applications. Meanwhile, the development of 5G is anticipated to significantly promote the growth of the IT and telecom industries, producing significant amounts of data and propelling market expansion.
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Market Dynamics
Decreasing the Entire Cost of IT to Spur Market Expansion
IT professionals with the necessary skills are needed to manage the operations while hosting a data center infrastructure on-site. On-site hosting also entails a variety of costs for server administration and infrastructure upkeep. Additionally, establishing a new data center facility necessitates a substantial initial expenditure and raises the businesses' overall CAPEX. As a result, businesses are increasingly considering the CAPEX spent on commissioning facilities for mission-critical data centers and searching for ways to save costs and boost return on investment (ROI). One key driver that encourages businesses to investigate new IT infrastructure solutions is the pressure to reduce IT costs. To obtain power, space, bandwidth, and value-added services, businesses are progressively resorting to Data Center Colocation providers.
Increasing the Need for Business Continuity and Disaster Recovery to Support Market Expansion
Users of data centers throughout the world are particularly concerned about disaster recovery. Facilities that house IT infrastructure are vulnerable to calamities like earthquakes, security breaches, fires, and other unforeseen incidents. For businesses to avoid suffering severe losses due to such events, disaster recovery plans must be in place. Facilities for colocating data centers are farther from the users' locations and less vulnerable to natural disasters. Because they can be managed remotely, these facilities are more dependable for disaster recovery plans. The ability for enterprises to store important data in a remote place makes colocation facilities suitable as a backup and recovery solution. Business continuity can be achieved due to the availability of resilient and secure colocation facilities, which is why the demand for these facilities is predicted to increase.
Top Players in the Global Data Center Colocation Market
- China Telecom Corporation Limited (China)
- Coresite Realty Corporation (US)
- Cyrusone Inc. (US)
- Cyxtera Technologies Inc. (US)
- Digital Realty Trust Inc. (US)
- Equinix Inc. (US)
- Global Switch (UK)
- KDDI Corporation (Japan)
- NTT Communications Corporation (Japan)
- Verizon Enterprise Solutions Inc. (US)
For Additional Information on Data Center Colocation Market Players and Detail List, Download a Report PDF Brochure
Top Trends in Global Data Center Colocation Market
- One trend that Vantage Market Research (VMR) expects to see in the Data Center Colocation industry is a need for green data centers. The need for achieving maximum energy efficiency is rising quickly over the world due to the escalating environmental concerns brought on by the rising emission of hazardous greenhouse gases (GHG). There is a growing need for green data centers.
- Another trend that VMR predicts will continue in the Data Center Colocation industry is the expanding need for edge data centers. These are modest data colocation facilities with caching and different cloud computing resources close to the businesses they serve. These facilities are linked to other centers or larger facilities that use machine learning and analytics to process the data and offer cloud computing services centrally.
Top Report Findings
- Based on Types, most of the Data Center Colocation market's revenue is controlled by the retail colocation category. Retail colocation offers power, cooling, space, cabling, and support services. Additionally, it offers flexibility regarding IT infrastructure, which benefits SMEs. The value of retail colocation is predicted to grow its market share in the colocation of data centers globally.
- The Big Corporate category, which can rent out sizable spaces and meet its power and processing requirements, controls most of the money generated by the Data Center Colocation industry, according to End Users. Big enterprises can control the data center’s infrastructure thanks to colocation services.
- Based on Industry, most of the Data Center Colocation market's revenue is controlled by the IT and telecom category since huge amounts of data are being produced as a result of the quick uptake of cutting-edge technologies like cloud computing, internet of things (IoT), and artificial intelligence (AI).
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Recent Developments in the Global Data Center Colocation Market
- In April 2022, Compass Datacenters, an American colocation company, developed a new business unit named Compass Quantum, which will provide modular data centers as a service. Each module provides enough space, power, and cooling to power 100kW of IT equipment in a 2N redundant arrangement.
- In March 2021, Digital Realty Trust, Inc. announced the acquisition of InterXion to fulfill the growing need for colocation and hyperscale infrastructure in the Americas, Europe, and Asia Pacific. This acquisition has expanded the customer base as well as the product portfolio of the company.
Retail Colocation Category in Data Center Colocation Market to Generate Over a Big Chunk of Revenue
Vantage Market Research has analyzed the market for Data Center Colocation to understand its current state and potential future growth factors. For better understanding, based on the type, the Data Center Colocation market is divided into retail colocation and wholesale colocation.
During the forecast period, the market for Data Center Colocation is anticipated to experience the highest CAGR for the retail colocation category. Businesses can rent a portion of a data center's space through retail colocation. This gives businesses flexibility when handling modest amounts of data or when temporary infrastructure needs arise. Due to their lower need for data storage than large organizations, small-scale organizations can benefit the most from it.
On the other hand, the wholesale colocation category is anticipated to grow significantly due to several significant hyper scalers and cloud service providers shifting into wholesale colocation. The enormous client bases of large businesses result in the production of significant amounts of data and the requirement for substantial commercial space to accumulate their servers, which in turn generates a demand for wholesale colocation.
North America Region in Data Center Colocation Market to Generate Most Revenue
North America dominates the market throughout the projection period due to the substantial presence of many significant cloud service providers and SMEs' widespread deployment of colocation data centers. Furthermore, the regional marketplace's expansion is aided by rising e-trade sales in the United States.
Browse Market Data Tables and Figures spread through 148 Pages and in-depth TOC on Data Center Colocation Market Forecast Report (2022-2028).
Global Data Center Colocation Market Segmentation
By Types
- Retail Colocation
- Wholesale Colocation
By End Users
- Small and Medium-Sized Enterprises (SMEs)
- Large Enterprises
By Industries
- Banking Financial Services & Insurance (BFSI)
- IT & Telecom
- Government & Defense
- Healthcare
- Research & Academics
- Retail
- Energy
- Manufacturing
- Others (Media, Entertainment, Transportation, Logistics)
By Region
- North America
- United States
- Canada
- Mexico
- Europe
- Germany
- UK
- France
- Italy
- Spain
- Rest of Europe
- Asia Pacific
- China
- Japan
- India
- South Korea
- South-East Asia
- Rest of Asia Pacific
- Latin America
- Brazil
- Argentina
- Rest of Latin America
- Middle East & Africa
- GCC Countries
- South Africa
- Rest of MEA
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Scope of the Report:
| Report Attributes | Details |
| Market Size in 2021 | USD 50.1 Billion |
| Revenue Forecast by 2028 | USD 105.4 Billion |
| CAGR | 13.2% from 2022 to 2028 |
| Base Year | 2021 |
| Forecast Year | 2022 to 2028 |
| Key Players | China Telecom Corporation Limited, Coresite Realty Corporation, Cyrusone Inc., Cyxtera Technologies Inc., Digital Realty Trust Inc., Equinix Inc., Global Switch, KDDI Corporation, NTT Communications Corporation, Verizon Enterprise Solutions Inc. |
| Customization Options | Customized purchase options are available to meet any research needs. Explore customized purchase options |
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