Data Center Colocation Market Size By Type (Retail Colocation, Wholesale Colocation), By End-Use (SMEs, Large Enterprises), By Application (BFSI, Energy, Government & Defense, Healthcare, Manufacturing, IT & Telecom, Retail), COVID-19 Impact Analysis, Regional Outlook, Growth Potential, Competitive Market Share & Forecast, 2021 – 2027

Industry Trends

Data Center Colocation Market size exceeded USD 55 billion in 2020 and is anticipated to expand at over 15% CAGR from 2021 to 2027. The growth in digitalization across several sectors, such as retail, manufacturing, and healthcare, will support the market expansion.

Get more details on this report - Request Free Sample PDF
 

The rising adoption of digital services, such as online retailing, video-on-demand, and digital payments, has increased data traffic. The escalation in data has encouraged businesses in different markets to develop the necessary infrastructure to maintain, store, and process the data at a faster rate. Many companies are facing challenges due to the huge investment and lack of expertise required to build an IT facility in-house. With high initial investments, several companies opt to adopt data center colocation services that ensure data security and high-quality network connectivity to maximize profitability.
 

The outbreak of the coronavirus pandemic supported the market growth in 2020 credited to the increasing dependency on digital mediums owing to the lockdown measures imposed by government bodies. The market witnessed a sudden rise in automation, digital transactions, and remote software utilization, thus generating more data. High use of technologies, such as e-learning and video-on-demand, has resulted in a surging amount of data. This factor fueled the demand for data center colocation services that ensure efficient data traffic management. The rising usage of technologies, such as contactless payments and digital wallets, in the wake of the pandemic has fostered the demand for data management solutions from the IT & telecom industry.

Expanding e-commerce sector in the U.S. is offering strong growth opportunities to the market

The U.S. retail data center colocation market will showcase 12% growth rate through 2027 led by the growing acceptance of online retailing solutions, particularly since the outbreak of the pandemic. With the sudden increase in online orders, retailers in the region are upgrading their websites to meet the new market trends. Small retailers are focusing on transitioning from traditional brick & mortar shops to online stores, impelling the demand for cost-effective retail colocation services for their limited IT requirements. Several software providers, system integrators, and data center colocation providers in the market are offering the necessary platform for these developments. In retail colocation, a customer leases space within a data center facility instead of leasing the entire IT facility. Retail data center colocation is ideal for businesses that have a limited colocation budget or require a small amount of IT space. Small retailers with budgetary constraints will increasingly adopt retail colocation services to leverage the advantages of high-quality data center services at affordable prices.

Expansion of IT infrastructure by large enterprises for data processing will propel the demand for colocation services

The global demand for colocation services from large enterprises is estimated to attain a CAGR of 14% till 2027 driven by the high demand for advanced IT services for data management in large enterprises. For large businesses, providers offer easy scalability, physical & virtual security, cost-saving by offering specified sections of the data center, depending upon the requirement. Sectors including healthcare, IT & telecom are investing in digital transformation and the modernization of their entire operational processes. Large enterprises are increasingly adopting cloud computing technologies to streamline operations and ensure scalability. This factor is encouraging them to adopt colocation services that ensure efficient data storage and networking capabilities while also ensuring data security. The adopting of colocation services enables them to focus on their core businesses rather than allocating resources to manage in-house data centers.
 

Robust BFSI market in Germany to support the demand for high-quality data center colocation

Get more details on this report - Request Free Sample PDF

Germany data center colocation market will expand steadily over the forecast timeframe attributed to digital transformation across the BFSI sector. Market trends including contactless payments and online banking will also boost the demand for data center colocation services from the BFSI sector. Banks are transforming their traditional formats and are offering their customers services such as mobile banking, e-passbook, online transactions, etc. The surging amount of data contributes to the growing demand for better IT infrastructure, supporting the industry growth.
 

Increasing demand for IT services in the APAC to support the market demand

Get more details on this report - Request Free Sample PDF

Asia Pacific data center colocation market accounted for over 35% of revenue share in 2020. With a rising number of SMEs and start-ups in the market, the adoption of cloud computing solutions and the requirement for IT services have increased. Companies are increasingly accepting digital services to ensure maximum productivity and profitability, thus contributing to the rising data. The increasing internet penetration in several countries including India, China, South Korea, and Japan is also accelerating the demand for data center colocation services from the telecom sector. Furthermore, the rise in data generation has also resulted in a growing need for an upgraded IT infrastructure, which will stimulate the demand for data center colocation facilities.
 

International business expansion forms a key strategy amongst the market players

Key companies operating in the market include China Telecom Corporation Limited, China Unicom, Cogent Communications, Inc., Cologix, Inc., CyrusOne, Cyxtera Technologies, Inc., eStruxture Data Centers, Equinix, Inc., Internap Corporation, Interxion Holding NV, Digital Realty, KDDI Corporation, NTT Communications Corporation, Ltd., Rackspace Inc., Singapore Telecommunications Limited, Sungard Availability Services, Telstra Corporation Limited, TeraGo Networks, Verizon Communications Inc., and Zayo Group, LLC. These market leaders are focusing on expanding their global footprints through the acquisition of new data center locations to increase their reach and strengthen their industry position.
 

The data center colocation market research report includes in-depth coverage of the industry, with estimates & forecast in terms of revenue in USD from 2017 to 2027, for the following segments:

Market, By Type

• Retail colocation
• Wholesale colocation

Market, By End-Use

• SMEs
• Large enterprises

Market, By Application

• BFSI
• Energy
• Government & defense
• Healthcare
• IT & telecom
• Manufacturing
• Retail
• Others

The above information is provided on a regional and country basis for the following:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Spain
  • Italy
  • Poland
  • Benelux
• Asia Pacific
  • China
  • India
  • Japan
  • Singapore
  • Australia
• Latin America
  • Brazil
  • Mexico
  • Chile
  • Colombia
  • Argentina
• Middle East & Africa (MEA)
  • GCC
  • South Africa