Colocation Edge Data Center Market Size & Share, by Type (Retail, Wholesale); End-use (SMEs, Large Enterprises); Application (BFSI, Energy, Government & Defense, Healthcare, IT & Telecom, Manufacturing, Retail) - Global Supply & Demand Analysis, Growth Forecasts, Statistics Report 2024-2036

  • Report ID: 5503
  • Published Date: Jan 05, 2024
  • Report Format: PDF, PPT

Global Market Size, Forecast, and Trend Highlights Over 2024-2036

Colocation Edge Data Center Market size is anticipated to reach USD 77 Billion by the end of 2036, growing at a CAGR of 20% during the forecast period, i.e., 2024-2036. In the year 2023, the industry size of colocation edge data center was over USD  7 Billion. Businesses ought to consider edge data center consolidation initiatives for a variety of reasons, the primary one being cost savings. It is anticipated that increased OPEX brought on by high carbon emissions and power consumption would result in further consolidation in the future. Furthermore, the increasing utilization of novel approaches such as server and storage virtualization and high-density storage solutions is contributing to the growth of edge data center consolidation.

Furthermore, the expansion of the healthcare sector is also propelling the growth of the colocation edge data center market. Market players through investments in infrastructural expansion are catering to the changes in the pharmaceutical sector. The healthcare sector generates about thirty percent of the world's data volume, and by 2025, it is expected that the compound annual growth rate of healthcare data will reach three quarters.


Colocation Edge Data Center Market
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Colocation Edge Data Center Market: Key Insights

Base Year

2023

Forecast Year

2024-2036

CAGR

~ 20%

Base Year Market Size (2023)

~ USD 7 Billion

Forecast Year Market Size (2036)

~ USD 77 Billion

Regional Scope

  • North America (U.S., and Canada)
  • Latin America (Mexico, Argentina, Rest of Latin America)
  • Asia-Pacific (Japan, China, India, Indonesia, Malaysia, Australia, Rest of Asia-Pacific)
  • Europe (U.K., Germany, France, Italy, Spain, Russia, NORDIC, Rest of Europe)
  • Middle East and Africa (Israel, GCC North Africa, South Africa, Rest of the Middle East and Africa)
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Colocation Edge Data Center Market: Growth Drivers and Challenges

Market-Growth-Drivers

Growth Drivers

  • Growing Adoption of 5G Networks - The deployment of 5G networks would drive the demand for edge data centers. 5G technology requires low latency and higher bandwidth to deliver its full potential. Edge data centers are essential to support 5G applications, as they can process data locally and reduce the backhaul traffic to the core data centers. The integration of 5G and the colocation edge data center market is a symbiotic relationship that enhances the capabilities and potential of both technologies. 5G and edge data centers complement each other to address the demands of modern applications and services. 5G technology’s ultra-low latency perfectly matches edge data centers. The combination allows quick data transfer from connected devices to nearby edge data centers, enabling real-time processing and responses.
  • Rising Demand for Edge Data Center as a Service - Edge data center as a service is a model that offers businesses and organizations the option to leverage edge data centers and their capabilities without needing to build and manage their dedicated edge infrastructure. EDCaaS providers offer edge computing resources and services on a subscription or pay-as-you-go basis, making it easier for companies to access the benefits of edge data centers without significant upfront investments. EDCaaS eliminates the need for businesses to invest in building and maintaining their edge data centers, which can be capital-intensive. Instead, companies can subscribe to EDCaaS offerings and pay for the edge computing resources they consume. This pay-as-you-go model allows organizations to manage their IT infrastructure costs more efficiently. Setting up a dedicated edge data center can be time-consuming, involving various stages such as site selection, construction, and configuration.
  • Growing Adoption of Advanced Technologies - Over the past few years, the adoption of cutting-edge technologies like cloud computing and data analytics has increased demand for data centre colocation services. Players in the colocation edge data center market are utilizing edge solutions to enhance customer support and data management. For instance, the cloud houses 60% of all corporate data worldwide. Global energy consumption is accounted by cloud data centers at 3%. The annual revenue from cloud infrastructure services is $178 billion. Ninety percent of major businesses have implemented a multi-cloud infrastructure. Therefore, the BFSI industry's growing integration of cloud-based solutions will increase demand for colocation edge data centers that guarantee quick and instantaneous data transfers.

Challenges

  • High-speed Network Connection in Remote Areas - As edge data centers are situated close to end-users, data sources, and network access points, there is less distance for data to travel, which lowers the latency between the generation and processing of data. Nevertheless, the absence of a strong network infrastructure in rural areas makes it challenging to build fast connections. As a result, this element can restrict the market for colocation edge data centres' expansion.
  • High Start-up and Maintenance Costs may Hamper the Growth of the Colocation Edge Data Center Market.
  • Concerns Over Carbon Emissions from Data Centers may Hinder the Growth of the Market.


Colocation Edge Data Center Segmentation

Type (Retail, Wholesale)

The retail segment in the colocation edge data center market is expected to hold a share of 54% during the forecast period. Retail colocation allows businesses to scale their infrastructure as needed, without having to invest in and manage their data centers. Also, retail colocation facilities are typically well-connected to various network providers, enabling businesses to access high-speed internet connectivity and interconnect with other organizations. Moreover, the increasing demand for scalable and flexible IT infrastructure solutions. For instance, with a 41% market share in 2022, Cisco maintained its position as the top manufacturer of enterprise network infrastructure. Retail colocation allows businesses to rent space in a shared data center, giving them the ability to easily scale up or down as their needs change. Another reason for the growth of retail colocation is cost efficiency. By opting for retail colocation, businesses can avoid these expenses and instead pay for the space and services they need. Therefore, altogether these factors are propelling the growth of the segment.

End-use (SMEs, Large Enterprises)

The SMEs segment in the colocation edge data center market is anticipated to hold a significant share of 52% during the forecast period. Colocation-edge data centres are advantageous to SMEs because they offer an affordable way to outsource IT infrastructure, which lowers operating costs and improves scalability. Additionally, advancements in technology have leveled the playing field for SMEs, allowing them to compete with larger companies. Digital tools, online platforms, and e-commerce have made it easier for SMEs to reach customers, market their products or services, and streamline their operations. Moreover, the changing consumer preferences and demands have created opportunities for SMEs. Consumers are increasingly seeking personalized and niche products or services; which SMEs are often well-positioned to provide. Therefore, these factors are accelerating the growth of the segment.

Our in-depth analysis of the global colocation edge data center market includes the following segments:

          Type

  • Retail
  • Wholesale

          End-use

  • SMEs
  • Large Enterprises

          Application

  • BFSI
  • Energy
  • Government & Defense
  •  Healthcare
  • IT & Telecom
  • Manufacturing
  • Retail

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Colocation Edge Data Center Industry - Regional Synopsis

North American Market Forecast

Colocation edge data center market in North America is anticipated to hold the largest share of 35% by 2036. The growing use of cloud services by US and Canadian businesses in a variety of industries is the main driver of the colocation edge data center market. Businesses are choosing cloud solutions to lower the construction and running costs associated with on-site data centers. Cloud solutions from hyper-scale providers like AWS, Microsoft, and Oracle are being used by enterprises more frequently to meet their computing capacity requirements with the least amount of money. Additionally, several data centers have already been developed by businesses in the region. Therefore, these factors are accelerating the growth of the market in the region.

APAC Market Statistics

Asia Pacific colocation edge data center market is anticipated to hold a substantial share of 28% during the forecast period. There has been a significant increase in the data centers and edge computing solutions in countries like China, India, and Singapore, which is escalating the growth of the market in the region. The rapid digital transformation in the region is propelling the growth of the market. Additionally, the deployment of 5G networks in the region is expected to further drive the growth of colocation edge data centers, as they can support the low-latency requirements of emerging technologies like autonomous vehicles and smart cities. For instance, in 2021, the combined income of Asia Pacific-based enterprises producing smart city technologies, goods, and services reached USD 42.96 billion.

Research Nester
Colocation Edge Data Center Market Size
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Companies Dominating the Colocation Edge Data Center Market

top-features-companies
    • DataBank
      • Company Overview
      • Business Strategy
      • Key Product Offerings
      • Financial Performance
      • Key Performance Indicators
      • Risk Analysis
      • Recent Development
      • Regional Presence
      • SWOT Analysis
    • Colt Data Centre Services
    • Eurazeo
    • H5 Data Centres
    • IBM Corporation

In-the-news

In The News

  • Through the Eurazeo Transition Infrastructure FundTM, Eurazeo announces its investment in Etix Everywhere, a regional provider of data centres. The two companies will collaborate to promote Etix Everywhere's carbon emission reduction trajectory. Etix is a well-known French business that runs a network of edge data centres in rural areas and offers colocation services to its clients.
  • The expansion of its edge data center, situated at 100 Taylor Street in downtown San Antonio, was recently announced by H5 Data Centres, a nationwide supplier of wholesale and colocation data centres. Up to 340 more cabinets and 1.5 MWs of additional UPS capacity will be possible with the Tier III extension of turn-key colocation space. In 2023 alone, five new communications providers installed infrastructure at the data centre campus, fostering the network-rich ecosystem's continuous expansion.

Author Credits:  Abhishek Verma, Hetal Singh


  • Report ID: 5503
  • Published Date: Jan 05, 2024
  • Report Format: PDF, PPT

Frequently Asked Questions (FAQ)

Growing adoption of 5G networks, rising demand for edge data center as a service, and growing adoption of advanced technologies are the major factors driving the growth of the colocation edge data center market

The market size of colocation edge data center is anticipated to attain a CAGR of 20% over the forecast period, i.e., 2024-2036.

The major players in the market are DataBank, Colt Data Centre Services, Eurazeo, H5 Data Centres, IBM Corporation, Internet Initiative Japan Inc., NTT Data, Panasonic Corporation, Toshiba Corporation, Fujitsu Limited and others.

The retail segment is anticipated to garner the largest market size by the end of 2036 and display significant growth opportunities.

The market in the North America region is projected to hold the largest market share by the end of 2036 and provide more business opportunities in the future.
Colocation Edge Data Center Market Report Scope
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