Global Data Center Colocation Market

Global Data Center Colocation Market Size More Than Triples at 15.6% CAGR to Touch USD 195.3 Billion by 2029

Published | 13 April 2023

Global data center colocation market is flourishing because of rapidly growing volumes of data from social media and over-the-top (OTT) platforms and reduction in overall it costs.

BlueWeave Consulting, a leading strategic consulting and market research firm, in its recent study, estimated global data center colocation market size at USD 51.25 billion in 2022. During the forecast period between 2023 and 2029, BlueWeave expects the global data center colocation market size to grow at a significant CAGR of 15.65% reaching a value of USD 195.25 billion by 2029. Major growth drivers for global data center colocation market include the rising high demand for flexible data centers, which result in reduced IT costs and greater data center complexity. Automation and robotics are also playing a crucial role in installing servers, overseeing disk storage, and managing connectivity. The market is benefiting from the widespread adoption of hybrid cloud computing and virtualization systems, which have made remote maintenance of data centers more secure and reliable. The need for scalable and dependable infrastructure to ensure business continuity and data recovery is also driving the market. Voluminous data generated by social media and over-the-top (OTT) platforms is another significant factor contributing to the increase in data center and colocation services demand. This trend is expected to continue in the future. However, high startup and maintenance cost is anticipated to restrain the overall market growth.

Global Data Center Colocation Market – Overview

The demand for data center colocation services has been increasing due to the many benefits they offer to businesses. They provide companies and organizations with space to rent for servers and other computing equipment, and have become more affordable, reliable, scalable, and require fewer technical staff than traditional data centers. Colocation data centers are used in various fields, including banking, insurance, healthcare, manufacturing, energy, and government. Data center colocation service providers are placing a strong emphasis on innovation and energy-efficient solutions to meet every client and regulatory demand. One of the main advantages of colocation is significant cost savings compared to managing a data center internally. Colocation eliminates the need to budget for capital costs, such as UPS, backup generators, strength grids, and HVAC systems. Furthermore, colocation data centers offer completely redundant network connections, excellent security practices, and the ability to burst to higher bandwidth levels to meet traffic demands. As a result, bandwidth costs are significantly reduced. With these benefits, the demand for data center colocation services is expected to continue to grow in the coming years.

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Impact of COVID-19 on Global Data Center Colocation Market

COVID-19 had a detrimental impact on the data center colocation market. It posed challenges to the market, such as delays in construction and installation due to restrictions on physical access to facilities, supply chain disruptions, and reduced demand from certain industries that have been adversely affected by the pandemic. However, with the shift towards remote work and the increasing reliance on digital infrastructure, the demand for data center services has increased. This has led to an acceleration in the adoption of cloud-based solutions and a rise in the need for secure and reliable data center colocation services. Moreover, the pandemic highlighted the need for resilient and agile data center infrastructure to support the increased demand for digital services. This has led to a greater focus on energy-efficient and sustainable data center solutions to reduce the carbon footprint of data centers and ensure business continuity in times of crisis.

Global Data Center Colocation Market – By End Use

Based on end use, the global data center colocation market is bifurcated into SMEs (small and medium-sized enter) and Large Enterprises segments. The large enterprises segment held the highest market share 2020, owing to their high demand for efficient data management and maintenance. As these organizations generate massive volumes of data, they require high-capacity infrastructure for storage, which is provided by data center colocation. Large enterprises can lease substantial floor space close to their users and scale up their infrastructure based on regional demand. On the other hand, the SMEs segment is projected to grow at the fastest CAGR during the forecast period. This is due to the increasing number of SMEs and startups in major developing countries like India. SMEs have financial constraints, so cost reduction is critical for their growth. Colocation data centers deployment helps small organizations save on fixed expenses and operational costs. As a result, SMEs find it more feasible to adopt colocation data center facilities than to build and manage their own data centers, thereby driving segment growth.

Competitive Landscape

Major players operating in global data center colocation market include China Telecom Corp. Ltd., CoreSite Realty Corp., CyrusOne, Inc., Cyxtera Technologies, Inc., Digital Realty Trust, Inc., Equinix, Inc., Global Switch, NaviSite, NTT Communications Corp., Telehouse, AT & T Inc., Interxion Holdings NV, and Verizon Enterprise Solutions Inc. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

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The in-depth analysis of the report provides information about growth potential, upcoming trends, and statistics of Global Data Center Colocation Market. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends in Global Data Center Colocation Market and industry insights to help decision-makers make sound strategic decisions. Furthermore, the report also analyzes the growth drivers, challenges, and competitive dynamics of the market.

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