Data Center Colocation Market worth over $130bn by 2026
Published Date: December 8, 2020 Authors: Preeti Wadhwani, Saloni Gankar
Data Center Colocation Market size is set to exceed USD 130 billion by 2026, according to a new research report by Global Market Insights, Inc.
Online shopping is gaining traction in several regions and traditional brick & mortar stores are increasingly being replaced by online stores. Online activities tend to generate large amounts of customer-related information, such as financial data and historical preferences, encouraging companies to invest in the construction and modernization of data centers. The growing need to expand, move, or consolidate data centers is encouraging companies to shift toward data center colocation services for reducing cost and increasing operational reliability & security.
Increasing investments in upgrading and transforming traditional or small IT facilities to mega facilities is a major factor driving the data center colocation market growth. The construction of new projects and facility modernization are transforming the IT infrastructure framework into highly automated facilities. This has led to a rise in the size & number of electrical devices in an IT environment and in the overall expenses involved in the maintenance, management, and installation of large-scale facilities. Companies are dependent on data center colocation service providers for reducing such expenses.
The ongoing coronavirus (COVID-19) pandemic is projected to surge the market demand for data center colocation services among corporates to maintain business continuity. Owing to the disruptions caused by the pandemic, several businesses have been forced to enforce remote working policies to protect their workforce and minimize the spread of the virus. As businesses shifted toward remote work culture, the internet consumption grew drastically. This led to an increased demand for colocation data centers to efficiently store and process data. However, widespread disruptions in the supply chain due to COVID-19 will impact the market value.
Rising demand for retail colocation services propelled by the increasing requirement for scalability and need to reduce total cost of ownership in the data center colocation market
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Colocation 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. The services are experiencing a steady adoption on account of the effective management of the information and devices with the use of limited or small amounts of space. These providers enable easy management and distribution of physical space, cabling, cooling, power, and support services to SMEs.
SMEs are opting for colocation services for reducing infrastructure & maintenance costs of data centers
Colocation services help small enterprises to reduce infrastructure costs by renting hardware and services from third-party companies. The cost of building a telecom infrastructure in countries including Nigeria, Morocco, and the Philippines is critical. Constructing a new data center drains a company’s vital resources such as time, labor, and money. Data center colocation providers offer enhanced services, such as power, cooling, and maintenance of infrastructure & connectivity solutions, encouraging SMEs to shift toward data center colocation providers.
Browse key industry insights spread across 300 pages with 248 market data tables and 32 figures & charts from the report, “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” in detail along with the table of contents:
Increasing need to store and process massive data generated in the IT & telecom sector globally will drive the need for data center colocation services
The development of 5G and high-speed networks across several countries will create future growth prospects for the data center colocation market in the IT & telecom sector. The massive volume of data generated by 5G technology needs to be stored and processed in a secure environment to reduce the chances of data theft or loss. Data center facilities also require regular monitoring and maintenance operations to reduce system downtime. Some of the major service providers in the market are offering their services specifically to the telecom sector.
Improving economic conditions, a strong industrial sector, and growing government initiatives for digitization will boost the APAC market revenue
The Asia Pacific data center colocation market is estimated to witness a strong demand for cloud-based deployment led by the increasing number of businesses in recent years. Various government initiatives, such as Smart Cities, Made in China, and Digital India, are further boosting the implementation of IoT and cloud computing in the region. Australia, Taiwan, Singapore, and South Korea have developed markets with governments in these regions investing in IT infrastructure facilities.
Partnership and product launches remain key growth strategies
Key players operating in the data center colocation market are Singapore Telecommunications Limited, NTT Communications, KDDI Corporation, Interxion N.V., Global Switch Corporation, Equinix, Inc., Digital Realty, CyrusOne, China Unicom, and China Telecommunications Corporation. The companies are engaged in developing long-term partnerships with clients to offer personalized services based on their requirements and business needs. The colocation companies are also offering innovative services to match the requirement of their clients. Some major innovations fueling the market expansion include hyper-converged infrastructure, hyper-scale storage, and software-defined networks.
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