USD 46.10 billion
Data Center Colocation Market Size, Share, Growth Analysis, By Type (Wholesale Colocation, Retail Colocation), By Industry (BFSI, IT & telecom), By End-User (SMEs, Large Enterprises), By Region-Industry Forecast 2024-2031
Report ID:
SQMIG45C2036 |
Region:
Global |
Published Date: August, 2024
Pages:
157
|Tables:
60
|Figures:
75
Data Center Colocation Market Insights
Data Center Colocation Market size was valued at USD 54.17 Billion in 2022 and is poised to grow from USD 62.46 Billion in 2023 to USD 195.09 Billion by 2031, growing at a CAGR of 15.3 % in the forecast period (2024-2031).
Today, data centers have become a vital part of modern corporate practices responsible for monitoring business applications. The requirement for IT infrastructure for operating a business has increased immensely as businesses are relying more on data, increasing the adoption of cloud services. Colocation data centers have allowed rapid scaling up of IT needs of businesses. The demand of data center colocation is increasing more because of the high expense of owning and maintaining data centers, especially for organizations that generate inconsistent data volumes. The advent of technologies like cloud computing, autonomous vehicles, internet of things (IoT), and advanced robotics have boosted the demand for faster data processing and higher bandwidth. To efficiently make use of these technologies needs less latency and faster network connectivity. Furthermore, the colocation data centers are also ideal for meeting low latency and faster network connectivity. This is because the operators can identify their data center facilities that are near to the user, enabling them to provide better storage and networking. The advent of 5G technology is also increasing the implementation of colocation providers that offer services in remote locations.
Market Snapshot - 2024-2031
Global Market Size
Largest Segment
Wholesale Colocation
Fastest Growth
Wholesale Colocation
Growth Rate
15.3% CAGR
Global Data Center Colocation Market ($ Bn)
Country Share for North America Region (%)
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Data Center Colocation Market Segmental Analysis
The global data center colocation market is segmented by type, industry, end-user, and region. Based on type, the market can be segmented into wholesale colocation and retail colocation. Based on industry, the market is segmented into Banking, Financial Services, & Insurance (BFSI), IT & telecom, Government & Defense, Healthcare, Research & Academics, Retail, Energy, Manufacturing, and Others. Based on end-user, the market is segmented into Small and Medium-Sized Enterprises (SMEs) and Large Enterprises. Based on region, the market is segmented into North America, Europe, Asia Pacific, Middle East and Africa, and Latin America.
Analysis by Type
Based on type, the retail segment is dominating the market with the largest share. The retail colocation allows businesses to rent smaller spaces in a data center. With this, companies must manage smaller volumes of data and need limited infrastructure. This is one of the major factors that us boosting the adoption of retail colocation among SMEs. Along with this low-budget requirement has also been appealing SMEs towards retail colocation. Retail colocation providers also help their clients individualize IT systems to fulfil requirements. This is done by offering them dedicated space, power, and connectivity within the shared data center. Retail colocation is also experiencing immense advancements with the increasing requirement for data processing and storage capability. This is making them more cost-efficient and flexible for the customers.
Based on type, the wholesale segment is witnessing the fastest growth in the market as wholesale colocation data centers are still preferred by large businesses. This is because they can accommodate massive amount of data volume configurations. Nowadays more cloud service providers are investing in wholesale colocation space because of the integration of GDPR. Companies are making such investments because customers nowadays have become more aware about their data storage while minutely monitoring the data storage process. Furthermore, wholesale data colocation enables cloud service providers to localize their large data centers while maintaining GDPR and acquiring customer trust. Today, wholesale colocation provides economies of scale, making it more cost-efficient for large-scale operations.
Analysis by Industry
Based on industry, the IT and Telecom sectors dominate the market with maximum share. This is primarily because they have huge amount of computational and data management requirements. This sector is mostly driven by continuous requirement for data storage, processing power, and fast and reliable connectivity. It is required for supporting a wide range of services like cloud computing, mobile broadband, VoIP, and various other streaming options. Colocation centers provide IT and Telecom organizations with the ability to scale, ensure dependability, and maintain security for providing constant services globally. Furthermore, these companies can even connect through a vast range of connectivity choices and interact within a diverse setting that consists of cloud, network, and content providers. These factors are successfully progressing the growth of data center colocation in this segment.
The healthcare segment is witnessing the fastest growth in the data center colocation market. The development of colocation data centers in the healthcare sector is mainly due to advantages like reduced OPEX, better resource allocation, varied connectivity options, and high uptime records. Furthermore, improved security compliance is also minimizing the risk in the network, which is also driving the market growth. The prominent market players are also contributing to the development of the healthcare sector by providing medical solutions like Digital Realty Trust and Iron Mountain Incorporated. These solutions help healthcare centers manage confidential health data, enhance patient care with data analysis, and ensure compliance with regulations like HIPAA.
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Data Center Colocation Market Regional Insights
North America is dominating the data center colocation market with the highest market share. In recent times, many governments are encouraging growth by taking many initiatives and offering incentives, which is boosting the data center colocation market in this region. Other factors like industrialization, improving speed of submarine cable connectivity, and investments by cloud service providers are also progressing the market further. Furthermore, the presence of major tech giants like Google, AWS, IBM, Microsoft, have also established their data centers, driving the expansion of the market. Rapid digitalization and growing dependency on cloud-based solutions among business is also increasing the demand for data center colocation market.
The Asia Pacific region is witnessing the fastest growth globally led by China and India. Several factors like rising demand for smartphones, internet penetration, increasing adoption of cloud, and foreign investments in the technology sectors are boosting the growth of the market. This is because it has increased online activities and data usage, increasing the demand for data center infrastructure like colocation facilities. Many operators are investing heavily in these regions to build hyperscale data centers and capture the colocation opportunities in various countries. Furthermore, the cost-efficiency of real estate, power, and skilled labor in comparison with developed economies are also attracting global operators to expand their presence in Asia Pacific regions.
Global Data Colocation Market By Geography
- Largest
- Fastest
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Data Center Colocation Market Dynamics
Drivers
Increasing Data Volume
- The rapid expansion of data generated by IoT devices, big data analytics, and digital content fuels the demand for colocation services. For instance, companies such as Amazon and Google use colocation to handle vast amounts of data efficiently. As data grows exponentially, businesses seek colocation to scale their storage and management capabilities without investing in costly infrastructure. This surge in data volume drives the colocation market forward.
Focus on Core Competencies
- Outsourcing data center management to colocation providers allows businesses to concentrate on their core activities rather than IT infrastructure. For instance, a fintech company can focus on developing innovative financial products and services while leaving data management and security to a colocation provider. This shift enhances operational efficiency and strategic focus, driving growth in the data colocation market as more companies seek to optimize their resources.
Restraints
High Initial Costs
- High initial costs are a significant barrier in the data colocation market. Establishing data colocation services requires substantial investment in infrastructure such as servers, cooling systems, and security measures. This financial burden is particularly challenging for small and medium-sized enterprises, hindering their ability to enter the market and limiting overall data colocation market growth.
Dependence on Third-Party Providers
- Dependence on third-party providers in the data colocation market poses risks of service disruptions and outages, which can significantly impact business continuity. Organizations relying on external data centers may face downtime and reduced operational efficiency, leading to potential financial losses and operational setbacks. Such risks can deter businesses from adopting colocation services, hindering market growth and adoption.
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Data Center Colocation Market Competitive Landscape
The data center colocation market is a highly competitive and versatile space. It is characterized by a wide range of players who are trying to obtain more market share. These companies are constantly striving to mark their presence by adopting various strategic tactics like launching new solutions that will improve customer satisfaction and the security of the network. Theu are also emphasizing on innovating their product lines for serving the diverse customer base in various regions. They are also going through collaboration, mergers, and acquisitions to expand their company and increase the demand for data center colocation in various regions. These factors are immensely contributing to the growth of the global data center colocation market.
Data Center Colocation Market Top Player’s Company Profiles
- Equinix, Inc. (US)
- Digital Realty Trust, Inc. (US)
- NTT Communications Corporation (Japan)
- China Telecom Corporation Limited (China)
- Verizon Communications Inc. (US)
- Telehouse (UK)
- China Unicom (China)
- AT&T Inc. (US)
- KDDI Corporation (Japan)
- Deutsche Telekom AG (Germany)
- Colt Technology Services Group Limited (UK)
- Digital Bridge Holdings, LLC (US)
- Corespace, Inc. (US)
- Digital Realty Trust, Inc. (US)
Data Center Colocation Market Recent Developments
- In May 2024, Google highlighted its investment of USD 2 billion in data centers and cloud services in Malaysia. The object is to support the country's digital goals and Al abilities for improving local industry and global competitiveness.
- In August 2023, Digital Realty introduced high-density colocation services in their PlatformDIGITAL global data center platform. This will support workloads of up to 70 kilowatts per rack and utilize innovative Air-Assisted Liquid Cooling (AALC) technologies.
- In February 2023, Onix Data Centres Ltd, launched their new data center colocation services in Senegal. The strategic step will increase internet connectivity and economic growth in West Africa.
Data Center Colocation Key Market Trends
Sustainability and Green Data Centers
- In the data center colocation market sustainability is extremely vital as organizations are trying to minimize environmental impact. Green data centers are being developed to increase energy efficiency. Their popularity is increasing as they are powered by renewable energy sources. Colocation providers are investing in eco-friendly technologies like innovative cooling systems, energy-efficient hardware, and renewable power sources. This is helping them to create sustainable data center solutions.
Hybrid and Multi-Cloud Deployments
- Companies are employing hybrid and multi-cloud strategies to improve their IT structures. This trend is contributing to the growth of the data center colocation market as providers are launching solutions that smoothly integrate with public and private cloud environments. Furthermore, the colocation centers have become strategic spots for implementing hybrid and multi-cloud offering better connectivity and flexibility. This is necessary for an organization to use a combination of on-premises, cloud, and colocation resources.
Data Center Colocation Market SkyQuest Analysis
SkyQuest’s ABIRAW (Advanced Business Intelligence, Research & Analysis Wing) is our Business Information Services team that Collects, Collates, Correlates, and Analyses the Data collected by means of Primary Exploratory Research backed by robust Secondary Desk research.
As per SkyQuest analysis, the global data center colocation market is in the path of transformation, driven by the shifting requirements of businesses, technological developments, and rising focus on sustainability. The trends that are forming the future of colocation services are edge computing, hyperscale facilities, sustainable data center, and better interconnectivity. With businesses navigating the digital setting and preferring scalable, secure, and eco-friendly IT solutions, staying informed has become vital. The data center colocation market is gradually becoming more interconnected, resilient, and responsive towards the increasing demands of businesses
| Report Metric | Details |
|---|---|
| Market size value in 2022 | USD 54.17 Billion |
| Market size value in 2031 | USD 195.09 Billion |
| Growth Rate | 15.3% |
| Base year | 2023 |
| Forecast period | 2024-2031 |
| Forecast Unit (Value) | USD Billion |
| Segments covered |
|
| Regions covered | North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA) |
| Companies covered |
|
| Customization scope | Free report customization with purchase. Customization includes:-
|
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Table Of Content
Executive Summary
Market overview
- Exhibit: Executive Summary – Chart on Market Overview
- Exhibit: Executive Summary – Data Table on Market Overview
- Exhibit: Executive Summary – Chart on Data Center Colocation Market Characteristics
- Exhibit: Executive Summary – Chart on Market by Geography
- Exhibit: Executive Summary – Chart on Market Segmentation
- Exhibit: Executive Summary – Chart on Incremental Growth
- Exhibit: Executive Summary – Data Table on Incremental Growth
- Exhibit: Executive Summary – Chart on Vendor Market Positioning
Parent Market Analysis
Market overview
Market size
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- SWOT Analysis
KEY MARKET INSIGHTS
- Technology Analysis
- (Exhibit: Data Table: Name of technology and details)
- Pricing Analysis
- (Exhibit: Data Table: Name of technology and pricing details)
- Supply Chain Analysis
- (Exhibit: Detailed Supply Chain Presentation)
- Value Chain Analysis
- (Exhibit: Detailed Value Chain Presentation)
- Ecosystem Of the Market
- Exhibit: Parent Market Ecosystem Market Analysis
- Exhibit: Market Characteristics of Parent Market
- IP Analysis
- (Exhibit: Data Table: Name of product/technology, patents filed, inventor/company name, acquiring firm)
- Trade Analysis
- (Exhibit: Data Table: Import and Export data details)
- Startup Analysis
- (Exhibit: Data Table: Emerging startups details)
- Raw Material Analysis
- (Exhibit: Data Table: Mapping of key raw materials)
- Innovation Matrix
- (Exhibit: Positioning Matrix: Mapping of new and existing technologies)
- Pipeline product Analysis
- (Exhibit: Data Table: Name of companies and pipeline products, regional mapping)
- Macroeconomic Indicators
COVID IMPACT
- Introduction
- Impact On Economy—scenario Assessment
- Exhibit: Data on GDP - Year-over-year growth 2016-2022 (%)
- Revised Market Size
- Exhibit: Data Table on Data Center Colocation Market size and forecast 2021-2027 ($ million)
- Impact Of COVID On Key Segments
- Exhibit: Data Table on Segment Market size and forecast 2021-2027 ($ million)
- COVID Strategies By Company
- Exhibit: Analysis on key strategies adopted by companies
MARKET DYNAMICS & OUTLOOK
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- Regulatory Landscape
- Exhibit: Data Table on regulation from different region
- SWOT Analysis
- Porters Analysis
- Competitive rivalry
- Exhibit: Competitive rivalry Impact of key factors, 2021
- Threat of substitute products
- Exhibit: Threat of Substitute Products Impact of key factors, 2021
- Bargaining power of buyers
- Exhibit: buyers bargaining power Impact of key factors, 2021
- Threat of new entrants
- Exhibit: Threat of new entrants Impact of key factors, 2021
- Bargaining power of suppliers
- Exhibit: Threat of suppliers bargaining power Impact of key factors, 2021
- Competitive rivalry
- Skyquest special insights on future disruptions
- Political Impact
- Economic impact
- Social Impact
- Technical Impact
- Environmental Impact
- Legal Impact
Market Size by Region
- Chart on Market share by geography 2021-2027 (%)
- Data Table on Market share by geography 2021-2027(%)
- North America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- USA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Canada
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Europe
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Germany
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Spain
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- France
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- UK
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Europe
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Asia Pacific
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- China
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- India
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Japan
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Korea
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Asia Pacific
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Latin America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Brazil
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of South America
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Middle East & Africa (MEA)
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- GCC Countries
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Africa
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of MEA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
KEY COMPANY PROFILES
- Competitive Landscape
- Total number of companies covered
- Exhibit: companies covered in the report, 2021
- Top companies market positioning
- Exhibit: company positioning matrix, 2021
- Top companies market Share
- Exhibit: Pie chart analysis on company market share, 2021(%)
- Total number of companies covered
Methodology
For the Data Center Colocation Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:
1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.
2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Data Center Colocation Market.
3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.
4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.
Analyst Support
Customization Options
With the given market data, our dedicated team of analysts can offer you the following customization options are available for the Data Center Colocation Market:
Product Analysis: Product matrix, which offers a detailed comparison of the product portfolio of companies.
Regional Analysis: Further analysis of the Data Center Colocation Market for additional countries.
Competitive Analysis: Detailed analysis and profiling of additional Market players & comparative analysis of competitive products.
Go to Market Strategy: Find the high-growth channels to invest your marketing efforts and increase your customer base.
Innovation Mapping: Identify racial solutions and innovation, connected to deep ecosystems of innovators, start-ups, academics, and strategic partners.
Category Intelligence: Customized intelligence that is relevant to their supply Markets will enable them to make smarter sourcing decisions and improve their category management.
Public Company Transcript Analysis: To improve the investment performance by generating new alpha and making better-informed decisions.
Social Media Listening: To analyze the conversations and trends happening not just around your brand, but around your industry as a whole, and use those insights to make better Marketing decisions.
Data Center Colocation Market Report Snapshots
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