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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

  • Report ID: GMI2419
  • Published Date: Sep 2021
  • Report Format: PDF

Industry Trends

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

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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 for data center colocation market services that ensure data security and high-quality network connectivity to maximize profitability.

The outbreak of the coronavirus pandemic supported the industry growth in 2020 credited to the increasing dependency on digital mediums owing to the lockdown measures imposed by government bodies. The data center colocation market witnessed a sudden rise in automation, digital transactions, and remote software utilization, thus generating more data.

The high usage of technologies, such as e-learning and video-on-demand, has resulted in a surging amount of data. This factor fuelled the acceptance these services that ensure efficient data traffic management. The rising use of technologies, such as contactless payments and digital wallets, in the wake of the pandemic has fostered the data management solutions demand from the IT & telecom industry.

Expanding e-commerce sector in the U.S.

The retail data center colocation market in the U.S. will showcase 12% growth rate through 2027 led by the growing espousal 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 business 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 vendors in the market landscape are offering the necessary platform for these developments. Small retailers with budgetary constraints will increasingly promote of retail colocation services to leverage the advantages of high-quality data center facilities at affordable prices.

Expansion of IT infrastructure by large enterprises for data processing

The global demand for data center colocation market services from large enterprises is estimated to attain 14% gains between 2021 and 2027 driven by the growing adoption of advanced IT services. For these 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.

The Large enterprises are increasingly upsurging cloud computing technologies to streamline operations and ensure scalability. This factor is encouraging them to embrace colocation services that ensure efficient data storage and networking capabilities while also ensuring data security.

Rising demand for high-quality data center colocation in German BFSI sector

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The data center colocation market in Germany will expand steadily by 2026 attributed to digital transformation along with the industry trends including contactless payments and online banking across 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 rising demand for better IT infrastructure, supporting the market growth.

Increasing demand for IT services in the APAC

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The data center colocation in Asia Pacific accounted for nearly 35% of market revenue share in 2020. With a rising number of SMEs and start-ups in the landscape, the implementation 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 data center colocation market demand.

Key players strategize to expand their business internationally

Major companies operating in the data center colocation scenario 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 leaders in data center colocation market are focusing on expanding their global footprints through the acquisition of new data center locations to increase their reach and strengthen their industry position.

This market research report on data center colocation 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


Authors: Preeti Wadhwani, Saloni Gankar

Frequently Asked Questions (FAQ) :

Global industry size of data center colocation surpassed USD 55 billion in 2020 and will expand at a CAGR of 15% between 2021 and 2027 with rising digitalization in manufacturing, retail, and healthcare sectors.
The U.S. retail data center colocation market will grow at CAGR of 12% up to 2027 propelled by the surging adoption of online retailing solutions, especially since the outbreak of COVID-19.
The colocation services demand from large enterprises will register a CAGR of 14% from 2021 to 2027 due to the higher volume and advanced IT services requirement for data management.
Asia Pacific region held more than 35% of the market share in 2020 and will grow with the increasing adoption of cloud computing solutions along with the rising number of start-ups and SMEs in the region.
Major players in the data center colocation market comprise CyrusOne, China Telecom Corporation Limited, Cogent Communication, Equinix, Inc., Interxion Holding NV, and others.

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  • Base Year: 2020
  • Companies covered: 20
  • Tables & Figures: 280
  • Countries covered: 21
  • Pages: 300
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