Facts and Factors Market Research has published a new report titled “Data Center Colocation Market By Type (Retail and Wholesale) and By End-User (SMEs and Large Enterprises): Global Industry Perspective, Comprehensive Analysis, and Forecast, 2018–2027”.
According to the report, the global data center colocation market was valued approximately USD 36,329 million in 2018 and is expected to reach a value of around USD 1,19,842 million by 2027, at a CAGR of around 14.2% between 2019 and 2027.
There are two major types of data center colocation—retail and wholesale. Retail colocation centers are small spaces in large facilities with the option of installing IT equipment in racks and rows. Retail colocation center providers facilitate the management and distribution of space, physical power, cooling, support, and cabling services to SMEs. They also provide the management software to integrate cooling, IT rooms, and power for facilitating the management of data centers with ease. On the other hand, wholesale colocation centers are constructed colocation facilities for large enterprises, which generally range from 10,000 to 20,000 square feet and can even be larger. Enterprises bear the cost of network connectivity, capacity, internal staff, and power. Wholesale colocation users benefit from economies of scale, due to reduced power and cooling costs in comparison to retail colocation centers. Wholesale colocation services are used by customers who require complete control and autonomy over the infrastructure along with having their own resources.
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Need for security, scalability, and reliability of infrastructure majorly driving the data center colocation market
Data colocation escalated the business potential by lowering operational costs and maximizing the focus on the core business. Thus, the rising awareness regarding carbon footprints reduction is majorly driving the data center colocation market. Additionally, the cost-effective solution for enterprises, as compared to storing their server at the premises that save room space requirement and cost of cooling and heating along with the need for IT expertise, are also fueling the data center colocation market.
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Retail colocation centers are projected to dominate the type segment
Retail colocation centers are small spaces, in comparison to wholesale colocation centers, in large facilities that come with an installment option of IT equipment in racks and rows. The providers of the retail colocation center handle the management and distribution of space, physical power, cooling, support, and cabling services. The main user of these retail colocation centers is SMEs. They also provide the management software to integrate cooling, IT rooms, and power for facilitating the management of data centers with ease. Thus, the retail colocation centers are likely to dominate the type segment of the data center colocation market in the years ahead.
SMEs are likely to register the highest CAGR in the future
SMEs have fewer infrastructure autonomy requirements, as compared to large enterprises. Thus, they are increasingly adopting retail colocation services, as they provide SMEs with security and flexibility. This demand is likely to rise in the future, which will enable SMEs to register the highest CAGR in the data center colocation market over the estimated timeframe.
North America is anticipated to lead the data center colocation market globally over the forecast timeframe.
The market in these regions is mainly driven by the increase in modular data center deployments by government agencies, educational institutes, enterprises, and various vendors, such as NTT Communications, Equinix, Digital Realty, Interxion, Global Switch, and T-Systems. Moreover, the rise in the demand for interconnection services with various facilities and cloud connectivity services with several cloud platforms is attracting more customers. Besides, retail colocation centers provide more control to enterprises over IT infrastructural operations other than managed hosting services, which, in turn, is likely to act as an advantage for the customers.
The Asia Pacific is projected to showcase a high growth rate in the data center colocation market in the future. The region is a major hub for IT outsourcing across various industry verticals. IP transit, power, and space cost more in China, which, in turn, is increasing the difficulties in maintaining the country’s data centers. China has more internet users, which indicates the scope for immense development. China’s connectivity ecosystem is made of 53 cloud service providers and 75 colocation data centers. Japan has a high internet literacy rate in comparison to China apart from having a high density of colocation. Thus, these are some factors that are likely to drive this region’s data center colocation market in the future.
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The Middle Eastern and African and Latin American regions are likely to emerge as a potential market for data center colocation in the estimated time period. This can be attributed to the growing demand for data colocation services from organizations, especially in the Middle East and Africa and the rising demand for high computing capacity from big data, global enterprises, cloud providers, and IoT organizations in both the regions.
Key players operating in the data center colocation market are Atlantech Online, Coreix Limited, Digital Realty Trust, Equinix, First Colo, H5 DATA CENTERS, Interoute Communications, Linxdatacenter, NextraOne, NTT Corporation, North Shore, RACKSPACE US, Sentinel Data Centers, Viettel, Red Level Networks, IBSCY Ltd., Sabey Data Center Properties, CYRUSONE, CE Colo, and ANEXIO, among others.
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This report segments the data center colocation market into:
Global Data Center Colocation Market: By Type
Global Data Center Colocation Market: By End-User
- Large Enterprises
Global Data Center Colocation Market: By Region
- North America
- The U.S.
- Asia Pacific
- Latin America
- The Middle East and Africa
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