Top 10 Growth Opportunities in Data Center Colocation Services, 2024

Providers Must Concentrate on Scaling Up Space and Power Capacities to Satisfy Hyperscale Demand

The data center colocation industry has seen significant growth in recent years, driven by the increasing demand for data storage and processing requirements. Public cloud service providers, enterprises, and governments are increasingly reliant on best-in-class data centers and digital infrastructure. A growing trend among enterprises is to outsource their infrastructure operations to third-party colocation service providers, creating additional growth opportunities.

The hyperscale market segment continues to drive demand from customers beyond public cloud service providers to OTT content, gaming, and now even banking verticals in several countries. An estimated 28% of enterprises plan to use more than 2MW of IT load capacity within the next 24 months, indicating a significant increase in capacity requirements. In the retail segment, enterprises across industry verticals continue to invest in digital transformation and adopt robust and reliable colocation infrastructure to support the data computing and processing requirements. To meet the demand, colocation service providers need to focus on scaling up their space and power capacities while also implementing tools and technologies to differentiate themselves. Colocation service providers will prioritize sustainability targets, edge strategies, and a comprehensive digital ecosystem.