Global Data Center Colocation Market - Forecasts from 2019 to 2024

As the data requirement keeps growing so is there increasing demand for efficient Information Technology (IT) infrastructure. Data center colocation plays a major role in providing much-needed benefit to companies willing to reduce their operating costs and remain competitive. Enterprises (small, medium and large) which are facing challenges related to burgeoning data and moving their services onto the cloud, colocation has become one of the preferred options. This has led to a movement towards leasing of colocation facilities which was traditionally dominated by owning data centers and having a dedicated team of IT professionals for maintaining and troubleshooting the issues. The global data center colocation market is estimated to witness a compound annual growth rate of 15.81% over the period to reach US$85,605.260 million in 2024 from US$35,481.250 million in 2018. Retail and wholesale colocation are the major type of solutions, the lines have started blurring between the two over the period. A new form of colocation solution “Hybrid Colocation” is slowly being adopted by enterprises, which are looking to get the best of the retail and wholesale solutions.

The demand for data center colocation is being mainly driven by North America and Europe on account of the early adoption of technology and the presence of major market players. Increasing IoT expenditure in the region will further boost the demand for this market in these regions. The Asia Pacific region is projected to witness impressive growth in the coming years owing to favorable government policies promoting SME businesses and technological upgradation by businesses over the forecast period.

By the colocation model, the global data center colocation market is segmented as wholesale and retail. As soon as an enterprise decides to opt for colocation spaces, it has two options: retail colocation or wholesale colocation. In retail colocation, the enterprise's leases required space within a data center, while in wholesale colocation, the enterprise leases the complete data center while it may or may not be managing the IT operations. Retail colocation is witnessing increased adoption across different regions on account of the benefits it offers and the changing market dynamics. The wholesale colocation providers have also started to lease out retail spaces within their existing facilities, leading to a blurring of lines between these two types of solutions. Enterprises are now considering those solutions for implementation which offer the best of these types and thus a new form of the hybrid solution is gaining momentum.

By enterprise size, the market is segmented as small, medium and large enterprises. The requirements of these enterprises can vary from a small rack space to the leasing of complete data centers. As more enterprises are moving towards cloud solutions, demand for colocation spaces will continue to grow during the forecast period. SMBs will be using colocation services on account of a lack of IT budget to build and manage their own data centers, growing adoption of the BYOD program, and increasingly using cloud computing solutions. Even though large enterprises are using their own data centers due to privacy and security concerns supported by availability of capital, growing volume of data is attracting them to opt for colocation data centers in order to reduce excess operational budgets.

By industry vertical, the global data center colocation market is segmented as BFSI, manufacturing, communication and technology, healthcare, government, media and entertainment, and others. The steady improvement in the proportion of the banked population along with the growing digital data in the financial institutions is leading to growth of the global data center colocation market for BFSI. Similarly, the continuous growth in the healthcare data is supplementing the growth of the market. Furthermore, the focus on reducing the cost of operations is leading to the growth of global data center colocation market for manufacturing industry.

By geography, the global data center colocation market is segmented as North America, South America, Europe, Middle East and Africa, and Asia Pacific. Furthermore, country level analysis is also provided within each region. North America is dominating the data center colocation market on account of presence of large number of data centers in the region. Simultaneously, Asia Pacific is projected to grow at a highest CAGR as a result of growing digitalization in the developing part of the region and presence of fast growing economies as well.

Segmentation

The global data center colocation market has been analyzed through the following segments:

By Colocation Model

• Wholesale
• Retail

By Enterprise Size

• Small
• Medium
• Large

By Industry Vertical

• BFSI
• Manufacturing
• Communication and Technology
• Healthcare
• Government
• Media and Entertainment
• Others

By Geography

North America

• USA
• Canada
• Mexico

South America

• Brazil
• Others

Europe

• United Kingdom
• Germany
• France
• Others

Middle East and Africa

• Saudi Arabia
• United Arab Emirates
• Israel
• Others

Asia Pacific

• Japan
• China
• India
• Australia
• Others