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) Industry Analysis Report, Regional Outlook, Growth Potential, Competitive Market Share & Forecast, 2020 – 2026

Industry Trends

Data Center Colocation Market size surpassed USD 45 billion in 2019 and is poised to grow at a CAGR of over 15% between 2020 and 2026. Large upfront costs associated with constructing, operating, and maintaining in-house data centers will drive the market growth.
 

Get more details on this report - Request Free Sample PDF
 

The demand for data processing to support greater rack densities and scalability & flexibility is increasing among enterprises. Expansion of racks, cabinets, and cooling equipment incur huge costs to the company. The other costs involved are cost of fire suppression tools and labor cost of security personnel to maintain & repair data centers. The high cost of owning a data center is driving the demand for data center colocation services.
 

A rise in the number of SMEs adopting advanced technologies to sustain in the growing competition will propel the data center colocation market revenue. Large amount of data generated by advanced technologies require expansive data center infrastructure. As businesses evolve, their IT requirements grow, in turn, stressing the need for enhanced data management solutions. Monetary and space constraints restrict these businesses from establishing data centers. Space constraints also pose a major problem in housing additional IT equipment such as racks, enclosures, and power & cooling. Data center colocation offers SMEs the scalability and flexibility needed for expanding data storage and processing requirements.
 

The coronavirus pandemic has pushed the internet usage to 70%, straining the internet’s underlying infrastructure. Colocation services enable companies to synchronize their existing on-premises data centers with colocation facilities for quickly onboarding workloads & applications, reducing risks and minimizing costs. A rise in the consumption of digital data with educational institutions using online learning techniques to ensure social distancing will also boost the market expansion.
 

Get more details on this report - Request Free Sample PDF
 

A sharp rise in the number of SMEs over recent years will spur the demand for retail data center colocation services

The U.S. retail data center colocation services will witness over 12% growth rate during the forecast timeframe. The growth can be attributed to the ongoing trend of startups utilizing the latest technologies to efficiently manage their IT infrastructure. According to the State of California report, as of April 2019, there are around four million small businesses in California. Small and medium-sized businesses do not require a dedicated data center space due to limited IT requirements. Retail colocation provides them the required resources for a stipulated period, thereby offering a cost-effective data handling solution.
 

Large enterprises leveraging advanced technologies, such as AI and IoT, to enhance operations

Get more details on this report - Request Free Sample PDF
 

The data center colocation market revenue in Germany was around USD 1 billion in 2019 and is projected to observe growth of 14.5% through 2026 led by the rise in the amount of digital data accumulated owing to the adoption of advanced technologies by renowned automotive manufacturers. Global automotive manufacturers, such as BMW and Mercedes-Benz, are incorporating advanced technologies, such as IoT and AI, resulting in a high demand for sophisticated data center colocation services for efficient data management. The advent of Industry 4.0 in the manufacturing process in Germany will also fuel the market demand.
 

Growing trend of retail automation to surge demand for data center colocation solutions for handling digital data traffic

Retailers are incorporating advanced solutions, such as Point of Sale (POS) systems and electronic shelf labels, to enhance customer satisfaction and streamline store operations. For instance, ALDO Group, a Canadian retailer, uses big data analytics to target the right customers and predict emerging trends to increase sales. The use of digital technologies by the retail sector will further contribute to the rising amount of data, propelling the demand for effective data management solutions.
 

Growing popularity of social media platforms in several countries in Asia Pacific

Get more details on this report - Request Free Sample PDF
 

The Asia Pacific data center colocation market accounted for over 30% revenue share in 2019. People use social media platforms such as Instagram and Facebook to upload content online. Growing internet penetration has enabled seamless streaming of videos online, in turn, leading to huge data storage requirements. According to Linkinfluence, a social media intelligence company, as of January 2019, South Korea has had the third-highest rate of active social media users globally. Around 65% of the total population in Japan used social media services at the beginning of 2020. A surge in the amount of data traffic will fuel the demand for sophisticated data center colocation services.
 

Strengthening market reach globally is a key strategy of companies

Key companies in the market include China Telecom Corporation Limited, Equinix, Inc., Digital Realty Trust, Inc., Zayo Group Holdings, Inc., Cyxtera Technologies, Inc., CyrusOne, Inc., and NTT Communications Corporation Limited.
 

Industry players are focusing on strengthening their reach to cater to the growing demand for efficient colocation services across the globe. For instance, in March 2020, Equinix, Inc. launched its fourth data center in Singapore by investing USD 74 million, providing around 4,000 square meters of colocation space. The fourth International Business Exchange (IBX) aims to support the increasing interconnectivity and growing digital transformation efforts amongst businesses in the country. The increasing penetration of digitalization globally will boost the demand for data center colocation services.
 

The data center colocation market research report includes in-depth coverage of the industry, with estimates & forecast in terms of revenue in USD from 2016 to 2026, 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