Published Date : 11 May 2023
The global data center colocation market value will hit at USD 64.95 billion in 2023 and is projected to touch around USD 144 billion by 2030, growing at a CAGR of 12.05% from 2022 to 2030.
The rising adoption of data centers across all industry verticals is a positive sign for the data center colocation market. The industry offers flexibility in terms of meeting each organization's capacity needs thanks to the availability of options like retail colocation and wholesale colocation. Data center colocation is the process of a service provider renting out vast amounts of floor space, internet bandwidth, and network within an existing data center to create its own data center to install huge amounts of data and handle server operations of large businesses. For data center colocation, it enables sharing of the currently available infrastructure and resources. Green hydrogen is produced exclusively from sustainable resources.
Companies often employ data center colocation as an outsourced data center option to grow past the limits of their own data center. Because it is less expensive, smaller businesses with fewer IT resources frequently select this option over creating their own data center.
With colocation, numerous businesses rent servers from the same physical colocation data center provider and deploy them there. Colocation frequently includes actual offices, backup power, cooling, and network connections with the corresponding bandwidth.
The past several years have seen a global expansion of cloud provider operations due to factors like increased internet usage, stricter data protection regulations, and increased service demand. With COVID-19, the market for data center colocation also saw an increase in cloud use. In response to the COVID-19 epidemic, 90% of workers across all industries shifted to remote work. As businesses look to implement cloud services like PaaS and IaaS, the need for colocation, managed, and cloud connection services will increase.
The demand for facilities will increase as big data and IoT technologies become more widely used in industries including BFSI, healthcare, government, entertainment & media, education, and others.
With a sales share of more than 50% in 2022, North America was the dominating regional market. Cloud service providers and social media businesses are the main consumers of colocation data centers. Yet, new demand generators like blockchain technology, virtual reality communities, 5G infrastructure, and driverless vehicles are on the horizon. Additionally, rising e-commerce sales in the United States are fostering regional market expansion.
The deep hyperscale demand and the billions of dollars in ongoing development to support these key tenants make the future of the data center industry in the Asia Pacific region "exceptionally bright," according to Kevin Imboden, director of research for the data center advisory group at Cushman & Wakefield. The 1.3 gigawatts now under development in the APAC areas under consideration represent a tiny portion of the regional planned for action and expansion over the next ten years.
Data Center Colocation Market Report Scope:
|Market Revenue in 2023||USD 64.95 Billion|
|Projected Forecast Revenue in 2030||USD 144 Billion|
|Growth Rate from 2022 to 2030||CAGR of 12.05%|
|Largest Market||North America|
|Forecast Period||2022 to 2030|
|Regions Covered||North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa|
Reliable power, cooling, and communication are provided via colocation facilities, ensuring stable connectivity. It is possible for businesses to invest in the processes and technologies required to create equivalent systems internally, but doing so may be expensive, particularly when it comes to paying workers and providing suitable office space. Electronics work best in a clean, regulated environment. Professional data centers have better cooling and air filtration systems than even the most hygienic workplaces. The purpose of data centers is to protect your systems from theft and other dangers that can threaten the security of your data and systems. They impose stringent data center security regulations as well as increased levels of physical security, including cameras, private rooms, and fire suppression equipment.
The initial setup costs for IT equipment in the data center facilities are incredibly costly. Businesses that choose to lease colocation facilities are required to buy their own IT hardware. The businesses must also transport the equipment to the colocation facilities. The cost of delivering the equipment is determined by its weight and size. Additionally, the initial implementation of data infrastructure solutions is substantially more expensive and difficult. However, the customers must pay an additional fee for these services. The expansion of the global data center colocation market is anticipated to be restricted by these additional setup and maintenance costs.
For users of data centers everywhere, disaster recovery is a top priority. Disasters including earthquakes, security breaches, fire breaks, and other unanticipated incidents are common at IT infrastructure installations. There must be adequate disaster recovery strategies in place for businesses to avoid suffering severe losses as a result of such calamities. Colocation data centers are less vulnerable to disasters because they are situated away from the users' homes or businesses. These facilities can be managed remotely, which increases their dependability for disaster recovery plans. Because colocation facilities allow companies to store important data in a remote place, they are therefore expected to become an attractive backup and recovery alternative.
Colocation Type Insights:
The retail type category dominated the market in terms of revenue in 2022 with a share of over 78%, and it is anticipated that it will continue to hold the top spot throughout the forecast period. Additionally, the retail kind is ideal for businesses who want to take advantage of colocation services but have a tight budget. Due to numerous significant cloud service providers and hyper scalers shifting toward wholesale colocation, the wholesale type sector is anticipated to experience the fastest growth rate over the projected period. Due to their enormous customer bases, large businesses produce significant amounts of data and need large commercial spaces to house their servers, which in turn fuels the need for wholesale colocation.
Enterprise Size Insights:
With a revenue share of more than 70% in 2022, the big enterprises' segment dominated the market. This significant proportion can be attributed to the considerable product demand for effective data management and maintenance among major enterprises. Huge volumes of data are produced by large businesses from a variety of industries around the world, necessitating infrastructure with large storage capacities. Large businesses have the opportunity to rent expansive floor space close to the users while also scaling up the infrastructure in response to demand from that specific region thanks to data center colocation. Due to the growing number of SMEs and startups in developing nations like China and India, the SMEs category is anticipated to see the quickest CAGR throughout the forecast period. Cost reduction becomes a crucial component for the expansion of the company because SMEs often have limited resources.
With a revenue share of more than 30% in 2022, the IT & telecom category dominated the global market. The increase in mobile internet users and the industry's continual development of new software and apps both have a substantial impact on this sector.
The GSM Association (GSMA) estimates that over 3.8 billion individuals worldwide connected to mobile internet in 2019, an increase of 250 million users from the previous year. Because of the growing popularity of smartphones with complex functions, this figure is certain to increase. Moreover, it is projected that the development of 5G would considerably support the expansion of the IT and telecom sectors, generating large volumes of data and driving market growth.
Major Key Players:
Buy this Research Report@ https://www.precedenceresearch.com/checkout/2459
You can place an order or ask any questions, please feel free to contact at email@example.com | +1 9197 992 333