Global Data Center Colocation Market Size, Share, Growth Analysis, By Type(Wholesale Colocation and Retail Colocation), By End-User(IT and Telecom, and BFSI) - Industry Forecast 2024-2031

Global Data Center Colocation Market size was valued at USD 46.10 billion in 2022 and is poised to grow from USD 53.15 billion in 2023 to USD 166.02 billion by 2031, growing at a CAGR of 15.3% during the forecast period (2024-2031).

The industry is expanding due to the high cost of owning and operating a data center, particularly for businesses that produce irregular volumes of data. According to research, the cost of building or owning a data center facility can exceed $300 USD per square foot, not including the cost of installing the necessary fiber cabling. For SMEs, managing a whole data center facility in-house is an expensive component; larger companies can afford this expense. During the course of the forecast period, data center colocation is anticipated to propel market growth as it provides a feasible and cost-effective substitute for leasing data center space. The demand for data centers and colocation services has surged due to the increasing volume of data originating from social media and Over-The-Top (OTT) platforms. The rise in technologies such as Internet of Things, cloud computing, advanced robotics, and autonomous cars has led to a greater need for faster data processing and larger bandwidths. Colocation data centers can meet these needs since their operators can put their facilities close to the users, providing better networking and storage options. But because they are less expensive, cloud data centers are becoming more and more popular, which is predicted to restrain industry expansion. Cloud services are becoming more and more popular among smaller businesses since they are less expensive, scalable, and require fewer overhead resources than traditional IT staffing. Colocation centers are a desirable alternative for businesses because they provide long-term cost advantages and complete server control flexibility.

Top-down and bottom-up approaches were used to estimate and validate the size of the Global Data Center Colocation Market and to estimate the size of various other dependent submarkets. The research methodology used to estimate the market size includes the following details: The key players in the market were identified through secondary research, and their market shares in the respective regions were determined through primary and secondary research. This entire procedure includes the study of the annual and financial reports of the top market players and extensive interviews for key insights from industry leaders such as CEOs, VPs, directors, and marketing executives. All percentage shares split, and breakdowns were determined using secondary sources and verified through Primary sources. All possible parameters that affect the markets covered in this research study have been accounted for, viewed in extensive detail, verified through primary research, and analyzed to get the final quantitative and qualitative data.

Global Data Center Colocation Market Segmental Analysis

Worldwide Data Center Segments of the colocation market include type, end-user, and region. The market can be divided into wholesale and retail colocation segments based on type. The market is divided into BFSI, telecom, and IT segments based on the end-user. The market is divided into North America, Europe, Asia Pacific, Middle East and Africa, and Latin America based on geographic factors.

Drivers of the Global Data Center Colocation Market

The growing need for scalable and reasonably priced data processing and storage solutions is one of the main factors propelling the global data center colocation industry. Many companies, especially small and medium-sized ones, cannot afford the hefty maintenance and construction expenses associated with owning and operating their own data centers. By letting these companies rent space in a data center, data center colocation offers an inexpensive alternative that also gives them flexibility over server control and the capacity to grow as needed.

Restraints in the Global Data Center Colocation Market

A significant impediment to the worldwide data center colocation industry is the growing utilisation of cloud computing services, which provide economical and scalable data storage options. There might be less of a need for colocation services as more companies go to the cloud, especially smaller ones. The demand for data center colocation may also be impacted by the growth of edge computing and decentralized data storage, as companies may decide to store data closer to their end customers in order to lower latency and enhance network connectivity.

Market Trends of the Global Data Center Colocation Market

The increasing use of edge computing solutions is one significant trend in the global data center colocation industry. By processing data closer to the source, edge computing helps to enhance network connectivity and lower latency. The need for edge computing solutions is predicted to grow as companies depend more and more on real-time data processing for mission-critical applications. Hybrid cloud solutions, which combine the advantages of on-premises data storage with public and private cloud infrastructure, are also becoming more and more popular.