Global Data Centre Colocation Market - 2023-2030

Market Overview

Global Data Centre Colocation Market size reached US$ 39.9 billion in 2022 and is expected to reach US$ 58.8 billion by 2030, growing with a CAGR of 6.3% during the forecast period 2023-2030.

The global data center colocation market is witnessing significant upward market trend as organizations seek secure, scalable, and cost-effective solutions for their data storage and management needs. Factors such as growing data generation, increasing focus on data security and compliance, scalability and cost-effectiveness, cloud adoption and the rise of edge computing and IoT are driving the demand for data center colocation services.

With the ongoing digital transformation and the continuous evolution of technology, the data center colocation market is expected to experience sustained growth and provide lucrative opportunities for providers and stakeholders in the industry. As organizations experience fluctuating data storage needs, colocation providers offer flexible solutions that can easily scale up or down based on demand.

The retail colocation segment emerges as the most rapidly expanding sector within the data center colocation market, capturing more than one-third of the market share. The significant growth can be attributed to the escalating demand for flexible and highly secure infrastructure that can accommodate the expanding digital landscape. As businesses strive to meet the evolving needs of their customers and navigate the complexities of the digital world, retail colocation provides a viable solution for accessing scalable and reliable data center services. Furthermore, North America stands out as the leading region in the data center colocation market, commanding more than one-fourth of the market share. The dominance and growth of this region can be primarily attributed to the surging demand for cost-effective and scalable data storage solutions.

Market Dynamics

Growing Data Generation and Increasing Focus on Data Security

As organizations grapple with the challenge of managing and storing vast amounts of data, data center colocation has emerged as a viable solution. Colocation providers offer secure and scalable infrastructure, including power, cooling, and connectivity, enabling organizations to offload their data storage and management needs and focus on their core business operations. By sharing resources in a colocation facility, businesses can also benefit from economies of scale, reducing operational costs associated with data storage and management. Further, data security and compliance have become paramount concerns for businesses globally.

With stricter regulations, such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA), organizations are required to adhere to rigorous data protection standards. Data center colocation facilities provide advanced security measures, including physical security, fire protection systems, and access controls, to safeguard sensitive data. Furthermore, colocation providers adhere to industry-specific compliance standards, ensuring that data is stored in a secure and compliant environment. The focus on data security and compliance is driving the adoption of data center colocation services.

Edge Computing, IoT, Cloud Adoption and Hybrid IT Environments

The adoption of cloud computing has revolutionized the IT landscape, with organizations increasingly leveraging cloud services for data storage, software applications, and infrastructure. Data center colocation providers play a crucial role in supporting cloud adoption by offering direct connectivity to major cloud service providers. The respective fact enables organizations to build hybrid IT environments, combining private and public cloud resources with their colocation infrastructure. Hybrid IT provides organizations with the flexibility to choose the best infrastructure for their specific workloads, optimizing performance, security, and cost-efficiency.

The rise of edge computing and the Internet of Things (IoT) has further fueled the growth of the data center colocation market. Edge computing involves processing data closer to its source, reducing latency and enabling real-time decision-making. As IoT devices generate massive amounts of data, edge data centers located near the point of data generation are crucial for efficient data processing. Data center colocation providers are strategically establishing edge data centers to support the growing demand for low-latency applications and IoT deployments.

Limited Availability, High Initial Capital Investment and Operational Costs

The location of data center facilities is crucial for efficient and reliable data storage and delivery. However, finding suitable locations for establishing data centers can be challenging due to various factors, such as limited availability of land, high real estate costs, and strict zoning regulations. Additionally, data center colocation providers need to consider factors like proximity to network connectivity, power availability, and disaster resilience.

The scarcity of suitable locations can hinder the expansion of data center colocation services, limiting market growth in certain regions.Setting up and operating data center colocation facilities require significant capital investment. The construction and maintenance of data centers involve substantial costs related to infrastructure, power supply, cooling systems, and network connectivity.

Moreover, data center colocation providers need to continually upgrade their facilities to keep up with technological advancements and increasing customer demands. The high capital and operational costs can act as barriers for new entrants and small-scale players, limiting the overall market growth.

COVID-19 Impact Analysis

The COVID-19 pandemic has had a transformative impact on the global data center colocation market. The increased demand for remote work solutions accelerated digital transformation initiatives and heightened focus on business continuity and disaster recovery have driven the growth of the market. Data center colocation providers have played a pivotal role in supporting businesses during these challenging times, providing a secure and scalable infrastructure to meet evolving data management and storage needs. The pandemic highlighted the importance of robust business continuity and disaster recovery strategies.

Organizations recognized the need for redundant data storage and backup solutions to safeguard their critical data and ensure uninterrupted operations. For instance, data indicates a 25% increase in the adoption of disaster recovery and business continuity services in 2020. Data center colocation providers offered businesses the opportunity to establish geographically diverse data centers, ensuring data redundancy and minimizing the risk of downtime. The pandemic acted as a wake-up call for businesses to reevaluate their disaster recovery plans, leading to increased demand for data center colocation services. As the world navigates the post-pandemic era, the data center colocation market is expected to continue growing as businesses prioritize resilient and flexible data management solutions.

Segment Analysis

The global automotive oem coatings market is segmented based on type, end-user and region.

Edge Computing and Latency Optimization along with Cost Optimization and Operational Efficiency

The proliferation of Internet of Things (IoT) devices, artificial intelligence (AI), and real-time applications has driven the need for edge computing capabilities. Edge data centers, strategically located closer to end-users, enable low-latency data processing and improved user experiences. Retail colocation providers have recognized the demand for edge computing and are establishing edge data centers to cater to this growing market. The adoption of retail colocation for edge computing purposes has propelled the growth of the respective segment in the global data center colocation market.

Similarly, the retail colocation enables businesses to optimize their IT costs and improve operational efficiency. Instead of investing in building and maintaining their own data centers, organizations can leverage shared infrastructure provided by colocation service providers. The respective fact eliminates the need for upfront capital expenditure and ongoing maintenance costs, allowing businesses to allocate their resources more strategically. Retail colocation also offers scalable solutions, allowing businesses to easily expand or downsize their IT infrastructure based on their changing needs. The cost savings and operational flexibility offered by retail colocation have contributed to its growth in the global data center colocation market.

Geographical Analysis

Robust Digital Infrastructure and Business Continuity and Disaster Recovery

North America boasts a robust digital infrastructure, making it an attractive destination for data center colocation services. The region has a mature telecommunications network, advanced connectivity options, and a reliable power supply, creating a favorable environment for hosting data centers. Additionally, North America has a strong presence of major technology companies and multinational corporations that require high-capacity data storage and processing capabilities. According to the U.S. Census Bureau, as of 2020, the total value of communication equipment manufacturing shipments in the United States reached US$ 169 billion, indicating the presence of a robust digital infrastructure. Thee respective factors contribute to the growth of the data center colocation market in the region.

Moreover, business continuity and disaster recovery are critical considerations for organizations, particularly in light of the growing frequency and impact of cyber threats and natural disasters. Data center colocation provides a secure and redundant infrastructure that ensures the continuous operation of critical business systems. North America, being prone to natural disasters such as hurricanes and earthquakes, has witnessed an increased focus on business continuity and disaster recovery planning. Many organizations in the region leverage data center colocation services to ensure data backup, redundancy, and rapid recovery in the event of a disruption.

Competitive Landscape

The major global players in the market include Equinix, Inc., CenturyLink, CyrusOne, China Telecom Corporation Limited, Digital Realty Trust (DuPont Fabros Technology), Telehouse (KDDI), NTT Communications, China Unicom, Global Switch Corporation and Teraco Data Environments.

Why Purchase the Report?

• To visualize the global data centre colocation market segmentation based on type, end-user and region, as well as understand key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development.
• Excel data sheet with numerous data points of data centre colocation market-level with all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as excel consisting of key products of all the major players.

The global data centre colocation market report would provide approximately 53 tables, 47 figures and 182 Pages.

Target Audience 2023

• Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies