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Global Data Center Colocation Market Set to Grow USD 60 Billion 2026 – Facts & Factors

Global Data Center Colocation Market Growing On the Back Of Increasing Network Complexities In The Data Center Facilities and Also Due to the Growth in Demand for IoT

The procedure of renting the physical office spaces, bandwidth, and other available resources by an organization within the existing data center is termed as data center collocation. It can be used in retail or wholesale collocation. Datacenter collocation is used by various industries like IT & Telecom, BFSI, manufacturing, energy, retail, etc.

The global data center colocation market was at approximately 39 billion USD in 2019 and is expected to be valued at around USD 60 billion by the end of 2026. The analysts and industry players predict the global data center colocation market growth of around 10% in terms of CAGR.

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The rising demand for hybrid cloud technology, virtualization, and increasing network complexities in the data center facilities are majorly driving the demand for the data center colocation market globally. Large enterprises from various domains generate large volumes of data, due to which they require infrastructure with high storage capacities. But, as SMEs have budget restrictions on IT infrastructure, they are adopting colocation services for reducing costs associated with building infrastructure and other related services. Thereby, the rise in the number of small firms in developing economies is throwing ample opportunities to industry players to improve their market share. Furthermore, the rise in the omnichannel approach among retailers has boosted their IT infrastructure investments for storing customer data, for assessing customer buying patterns and product demand based on various demographic categories, including gender, region, and age group.

This is due to the high demand for social media and OTT platforms through which a high volume of data is expected. The active users on the various social media platforms are growing day by day and thus contributing to the growth of the data center collocation market globally. For example, the number of daily active Facebook users was 1.22 billion in the year 2016 which rose to 1.58 billion approximately in the year 2018. However, high startup costs and maintenance can hinder the growth of the data center collocation market in the forecast period.

Some of the leading players in the data center collocation market include China Telecommunications Corporation, NTT Communications, China Unicom, Interxion N.V., Digital Realty, Singapore Telecommunications Limited, Global Switch Corporation, and CyrusOneamong others. The players in the colocation providing innovative services that will satisfy the need of their clients. These factors provide the benefit of bargaining to colocation providers.

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On the basis of type, the global data center colocation market can be segmented into retail, wholesale, and among these the wholesale collocation is expected to have the highest market share owing to the growth of data centers for enterprises that are operating in multiple regions and that has a huge customer base with them. These enterprises have a high volume of data and also require a huge commercial space for the accumulation of their servers. In terms of end-user, the market is bifurcated into SMEs and large enterprises. Large enterprises have to manage and maintain the data at a larger volume which further requires high storage capacity infrastructures due to which large enterprises hold the highest market share. Further, in terms of geography, the market is segmented as North America, Europe, Asia Pacific, Latin America, Middle East, and Africa. North America will dominate the market for data center collocation in the forecast period because of the presence of some of the giant players in this region and also the online sales is increasing especially in the U.S. region.

Frequently Asked Questions

What is Data Center Colocation?

The procedure of renting the physical office spaces, bandwidth, and other available resources by an organization within the existing data center is termed as data center collocation. It can be used in retail or wholesale collocation. Data center collocation is used by various industries like IT & Telecom, BFSI, manufacturing, energy, retail, etc.

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What are the key factors driving Data Center Colocation Market expansion?

The surge in the adoption of cloud and virtualization technology and increased IT infrastructure budget issues from several industries and enterprises significantly influencing the demand for the data center colocation market.

Which region will make notable contributions towards global Data Center Colocation Market revenue?

Asia Pacific data center colocation market is anticipated to contribute remarkably towards the overall data center colocation market size in the coming years owing to immense development and the connectivity ecosystem in this region.

Which are the key players leveraging Data Center Colocation Market growth?

Some of the leading players in the data center collocation market include China Telecommunications Corporation, NTT Communications, China Unicom, Interxion N.V., Digital Realty, Singapore Telecommunications Limited, Global Switch Corporation, and CyrusOne among others.

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