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 (U.S., Canada, UK, Germany, France, Spain, Italy, Benelux, Poland, China, India, Japan, Singapore, Australia, Brazil, Mexico, Colombia, Chile, Argentina, GCC, South Africa), Growth Potential, Competitive Market Share & Forecast, 2018 – 2024
Published Date: Nov 2018 | 200 Pages | Report ID: GMI2419 | Authors: Ankita Bhutani, Pallavi Bhardwaj Report Format: PDF
Data Center Colocation Market size valued at USD 35 billion in 2017 and will grow at a CAGR of over 14% to 2024.
China Data Center Colocation Market, by application, 2017 & 2024 (USD Million)
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High costs involved in installing infrastructure facility are encouraging SMEs and large enterprises to manage their business data through colocation hosting, thereby driving the data center colocation market growth. These services allow enterprises to hire a server on rent or install their servers at the service providers’ location and help in increasing the business potential by maximizing the focus on core business and reducing operational expenditure and capital. Moreover, with the rising trends of IoT and big data, a large amount of data that needs to be processed and analyzed in the real-time will be generated. To manage this data, the expansion of existing facilities will be witnessed, which may take ample space on the premises. Building a new facility can drain the company’s vital resources such as financial funds, labor, and time owing to which, companies are using the colocation services, thereby driving the market demand.
The utilization of IT infrastructure has expanded with the emergence of virtualization and cloud computing. Cloud computing is a major driver for the data center colocation market and has been flourishing over the last few years. The cloud market consists of several multinational companies such as Amazon, IBM, Microsoft, and SAP SE, among others. Combining cloud with the colocation helps in increasing security, reducing latency, and creating cloud interconnection opportunities. Moreover, the global companies are depending on hyperscale facilities and are renting out large spaces at service providers for enhancing the data management operations. The growing need for High Performance Computing (HPC) is encouraging the adoption of hyperscale computing. These hyperscale cloud providers are generating massive volumes of customer data, which needs to be stored in large facilities, accelerating the market growth.
Data Center Colocation Market, By Type
In 2017, the retail data center colocation market accounted for over 70% of the overall industry share. These services are offered based on individual cages or racks/cabinets and range from 500 to 10,000 sq. feet. They are the most preferred services by SMEs for their IT infrastructure requirements as they offer enhanced scalability. Moreover, these services are experiencing a steady adoption owing to the effective management of the information and devices with the use of a limited or small amounts of space. These providers enable the ease in management and the distribution of physical space, cabling, cooling, power, and support services to SMEs. Factors such as data center saturation in organizations, high in-house IT costs, and technological developments in IT facilities are propelling the retail market demand. Major vendors operating in this segment include NTT Communications, China Telecom, Equinix, and Internap, among others.
Data Center Colocation Market, By End-Use
The data center colocation market is expected to witness a substantial growth with the rise in demand for these services from large enterprises. The rising expenses incurred by these companies to manage, maintain, and install in-house infrastructure facilities are driving the adoption of such services. Moreover, with the rapid expansion of the business, the need for data storage facilities has also increased, which has forced the companies to select the cost-efficient methods for data management and processing. These services are also helping companies reduce their IT expenses such as replacement of disk drives, cabling, OS updating, rebooting, and patching. These tasks require IT experts and high investments to manage in-house facilities. Moreover, the major services that are offered by the players in the market are disaster recovery and incident management.
Data Center Colocation Market, By Application
The IT & telecom sector is the most flourishing industry in the market and is anticipated to grow at a CAGR of around 15% from 2018 to 2024 owing to the rising demand for large facilities and innovative solutions to improve the security of the corporate data. The massive volume of data generated by the sector needs to be stored and processed in a secure environment to reduce the chances of data theft or loss. Moreover, the service providers are also engaged in performing regular monitoring and maintenance operations to reduce the system downtime. Some of the major service providers in the market are offering their services specifically to the telecom sector. For instance, the China Telecom Americas Corporation offers several such services including disaster recovery and website hosting for managing the massive data generated in the telecom industry.
Data Center Colocation Market, By Region
The Asia Pacific data center colocation market accounted for over 30% of the industry share in 2017 and is predicted to experience a substantial growth over the forecast timespan owing to the rising expansion of the global businesses in several industrial segments. Singapore is the most attractive data center market in the Asia Pacific region. The country has over 45 service providers that are operating around 60 infrastructure facilities. The country being a global transportation, commercial, and financial hub, several organizations/businesses based across North America, Europe, and Asia Pacific are setting up regional headquarters in Singapore. This has generated multiple opportunities for infrastructure and network expansion.
Moreover, in 2017, Equinix and Singtel accounted for over 45% of the market share in Singapore. The industry comprised telecommunications providers, established players, local operators, and other international organizations. Real estate entities, technology companies, and startups are exploring the market. These players are investing highly to establish infrastructure facilities and to offer colocation services to several industrial verticals. For instance, in October 2015, Singtel invested around USD 300 million to build their facilities to cater to the needs of public sectors, financial services, and internet service providers. Such factors are anticipated to positively impact the market growth over the coming years.
Competitive Market Share
Key players operating in the data center colocation market are Equinix, Inc., Centurylink Technology Solutions, Interxion Holding NV, NTT Data Corporation, Global Switch Corporation, Internap Corporation, Cyxtera Technologies, Inc., Verizon Communication Ltd., China Unicom, China Telecom Corporation Limited, CyrusOne. Inc., Digital Realty Trust, Inc., KDDI Corporation, and Rackspace, Inc., among others. The players are offering data center solutions and services based on the specific industrial requirements. Such solutions are widely used for several applications such as asset management, device discovery, and incident management. The players in the market are also installing DCIM and AIM solutions in their client’s facility for managing the IT infrastructure and its devices.
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The data center colocation industry is experiencing a rapid growth owing to the increasing number of service providers engaged in offering diversified services to its clients. The players are engaged in developing long-term partnerships with their clients to offer personalized services based on their requirements and business needs. For instance, in December 2017, QTS Realty Trust announced the launch of a new service that provides direct connectivity with the Amazon Web Services (AWS) with the help of a data center space. Moreover, the service providers are focused on implementing several innovative technologies to enhance the service offerings. These technologies include hyper converged infrastructure, hyper-scale storage, software-defined networks and big data analytics. Such factors are accelerating the market demand.
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