Colocation Market Share, Size & Trends 2031
The global colocation market size was USD 61.68 Billion in 2022 and is anticipated to reach USD 229.16 Billion by 2031 register a considerable CAGR 15.7% during the forecast period, 2023-2031. The growth of the market is attributed to the rising concern regarding operating data center expenses.
Colocation data center, often known as colo is any big facility of data center, which provides rack space, room, cage, or cabinet to third parties on the rent for their network equipment or servers. This data centers is mainly used by businesses that may not have the capital required to maintain their own data center.
This service provides facility to users, such as network bandwidth, cooling component, data center space, physical security, infrastructure, and power on the basis of requirements of end-users. Colocation centers addresses the limitations of existing data centers. It offers several benefits to the organization, including higher scalability & flexibility, risk management, reduced expenses, improved security, interconnection, and connectivity with cloud.
The COVID-19 pandemic outbreak had positive impact on the market. During the pandemic, the colocation services are helping organizations to address the extensive capacity demand of internet traffic. Additionally, the amount of data generation was high due to digitalization, automation, remote software management, and digital transaction, which created the need of effective data storage and management solutions.
Colocation Market Trends, Drivers, Restraints, and Opportunities
- Growing digitalization across the industry verticals especially in developing economies is one of the key factors driving the market growth.
- Increasing data center complexities is projected to boost the market during the forecast period.
- High initial and set-up cost of these centers acts as a major challenge that can restrict the market growth in the coming years.
- Rising concern regarding network bandwidth issue is expected to hamper the market growth during the projected timeline.
- Escalating need of disaster management solution is anticipated to create significant growth opportunities for the market.
Scope of Colocation Market Report
The report on the global colocation market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.
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Attributes
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Details
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Report Title
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Colocation Market - Global Industry Analysis, Growth, Share, Size, Trends, and Forecast
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Base Year
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2022
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Historic Data
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2016–2021
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Forecast Period
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2023–2031
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Segmentation
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Types (Wholesale Colocation and Retail Colocation), Organization Sizes (Large Enterprises and Small & Medium Enterprises), and End-Users (BFSI, IT & Telecom, Energy Sector, Healthcare & Life Sciences, and Government & Public Sectors)
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Regional Scope
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Asia Pacific, North America, Latin America, Europe, and Middle East & Africa
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Report Coverage
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Company Share, Market Analysis and Size, Competitive Landscape, Growth Factors, and Trends, and Revenue Forecast
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Key Players Covered in the Report
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Interxion Holding; CenturyLINK Technology Solutions; KDDI Telehouse; Global Switch Ltd.; Rackscape Technology, Inc.; SunGuard Availability Services; Equinix Inc.; Verizon Communication Ltd.; NTT Corp.; Digital Realty Trust, Inc.; and DuPont Fabros Technology, Inc.
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Colocation Market Segment Insights
Retail Colocation Segment to Register a High CAGR
On the basis of types, the market is bifurcated into wholesale colocation and retail colocation. The retail colocation segment is projected to register at high CAGR in the projected timeline attributed to benefits offered by it, such as enhanced security, lower cost of maintenance, and flexibility to IT infrastructure.
However, the wholesale colocation segment is anticipated to register a substantial CAGR during the forecast period owing to it provides high density computing and enables organization for deployment of thousands of servers at one location.
Increasing Demand Drives the Large Enterprises Segment
Based on organization sizes, the global colocation market is divided into large enterprises and small & medium enterprises. The large enterprise segment is estimated to expand at robust growth rate during the forecast period due to growing demand of heavy data storage from enterprises.
Furthermore, colocation services helps large enterprises to have complete control over the data center infrastructure, which is driving the segment growth further. However, the small & medium enterprises segment is anticipated to expand at a substantial CAGR during the forecast period owing to increasing digitalization and implementation of internet of things technology in their operation, which generates large volume of data.
BFSI Segment to Grow at Rapid Pace
On the basis of end-users, the market is segmented into BFSI, IT & telecom, energy sector, healthcare & life sciences, and government & public sectors. The BFSI segment is expected to grow at a rapid pace during the forecast period due to data generated by the sector is critical and require efficient and secure data storage facility.
Additionally, the segment growth is further accelerated as large volume of data generating through online banking and contactless payment, which need to be store and manage. On the other hand, the IT & telecom segment is anticipated to expand at a substantial CAGR in the coming years attributed to the growing need of reducing IT expenditure as well as these centers provides high level of risk management and disaster recovery solutions.
North America to Constitute a Key Market Share
In terms of region, the global colocation market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America is anticipated to constitute a key share of the market during the projected period owing to the presence of large scale IT companies in the region, which needs more space to data storage and increases the need of colocation data centers.
However, the market of Asia Pacific is anticipated to grow at a rapid pace during the forecast period due to expanding IT & telecom sector, strong economic growth, and rapid digitalization across organizations in the region.
Segments
The global colocation market has been segmented on the basis of
Types
- Wholesale Colocation
- Retail Colocation
Organization Sizes
- Large Enterprises
- Small & Medium Enterprises
End-Users
- BFSI
- IT & Telecom
- Energy Sector
- Healthcare & Life Sciences
- Government & Public Sectors
Regions
- Asia Pacific
- North America
- Latin America
- Europe
- Middle East & Africa
Key Players
Competitive Landscape
Key players competing in the global colocation market are Interxion Holding; CenturyLINK Technology Solutions; KDDI Telehouse; Global Switch Ltd.; Rackscape Technology, Inc.; SunGuard Availability Services; Equinix Inc.; Verizon Communication Ltd.; NTT Corp.; Digital Realty Trust, Inc.; and DuPont Fabros Technology, Inc.
Companies are focusing on investments in R&D sector for advancements in colocation data center market to maintain their competitive position in the market. Companies have been widely engaged in strategic partnership, merger & acquisition, new product launch, and collaborations to boost their market share and acquiring new buyers.
For instance, in June 2017, NTT Corp. Japan based Telecommunication Company announced a launch of 10Gbps large volume network to extend its network of data center. The recently launched product was to connect NTT’s Business Cloud for organizations collocated at more than 30 data centers around the globe.
In April 2021, Equinix, Inc. a US based digital infrastructure providers, declared the completion of an extension of Equinix's AM7 International Business Exchange in Amsterdam, AM7 phase 3. The AM7 phase 3 will rise the capability of international and local customers to be digitized. Equinix also capitalized more than USD 1 billion in data centers located in Amsterdam to date.
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