The Increasing Expansion of Data Centers in the World Is Boosting the Growth of the Global Data Center Colocation Market

Data Center Colocation Market

Data Center Colocation Market, By Type (Retail Colocation, Wholesale Colocation), By Enterprise Size (Small and medium size enterprise, Large scale enterprise), By Industry Vertical (BFSI, IT and Telecommunication, Manufacturing, Energy & utilities, Retail & E-commerce, Healthcare, Media & Entertainment, Government & Defense, and Others), By Region (North America, Latin America, Europe, Asia Pacific, Middle East & Africa) - Size, Share, Outlook, and Opportunity Analysis, 2022 - 2030.

 

The Global Data Center Colocation Market size was valued at USD 54.65 million in 2021 and is anticipated to witness a compound annual growth rate (CAGR) of 15.6% from 2022 to 2030. 

 

Market Overview:

Data center colocation, often referred to simply as colocation, is a service provided by data center facilities where businesses and organizations can rent space, power, cooling, and network connectivity to house their IT infrastructure and servers. In other words, it involves leasing a portion of a data center's physical space to house and operate a company's servers and other computing equipment.

 

Competitive Landscape:

Major players operating in the global Data Center Colocation Market include Flexential, Global Switch, Lumen, Cyxtera, 21Vianet, CoreSite, GDS, KDDI Telehouse, Cyrusone, China Mobile, China Unicom, NTT GDC, China Telecom, Digital Realty Trust, and Equinix.

Key Market Drivers:

The exponential growth of data generated by businesses and consumers necessitates robust and scalable data storage solutions. Data center colocation offers a cost-effective way to manage large volumes of data securely. Businesses are increasingly outsourcing their IT infrastructure to specialized colocation providers to focus on core competencies, reduce operational costs, and enhance business agility. This is expected to augment the growth of the global data center colocation market. For instance, according to Techjury, there are around 8000 data centers in the world.

Data center colocation provides scalable solutions that allow businesses to expand or downsize their IT resources according to their changing needs, enabling efficient resource allocation. Reputable data center colocation facilities are equipped with state-of-the-art security measures, redundant power, and backup systems, ensuring high levels of uptime and data protection. The rapid adoption of cloud services has bolstered the demand for data center colocation, as colocation providers offer direct connections to leading cloud platforms, improving network performance and reducing latency.  This is estimated to enhance the growth of the global data center colocation market.

Covid-19 Impact Analysis:

The COVID-19 pandemic had a dual impact on the global data center colocation market. On one hand, the increased reliance on remote work, online services, and digital communication drove higher demand for data storage and processing capabilities, boosting the need for colocation services. On the other hand, the pandemic disrupted supply chains and delayed data center expansion plans in some regions. For instance, in March 2020, Cyxtera’s 62 and Zadara Storage partnered in order to modify the storage, which is going to aid in increasing cost efficiency and decreasing operational risks in the whole system.

Key Takeaways:

·   North America is expected to dominate the growth of the global data center colocation market, owing to the presence of major technology hubs, high cloud adoption rates, and robust internet infrastructure. For instance, according to Dgtl Infra, there are more than 2500 data centers in the United States currently.

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       The Asia-Pacific is estimated to witness high growth in the global data center colocation market, led by China, India, and Singapore. The region's expanding digital economy, increasing data traffic, and supportive government initiatives fuel the market's growth. For instance, in July 2020, Yotta Infrastructure launched the world's second-largest and Asia's largest data center, in Navi Mumbai, India.