Data center is a cluster of networking hardware resources for the purpose of storage and management of huge data. Data center colocation is a shared facility provided by the companies that offer to expand or consolidate the data center of the businesses for daily operations, situated outside the organization premises. The colocation companies provide safe and secure environment to the server and necessary hardware, related to data storage owing to its capacity to efficiently manage complexity and scalability of businesses. With the ability of data center to provide data management solutions within the regulations and increase IT operational efficiency, they are gaining acceptability across numerous business verticals around the globe, thereby driving the growth of the data center colocation market. Moreover, external data center support businesses with increased uptime and solutions, along with managing risks in a cost-effective manner. These are some of the factors that are leading to increased adoption of data center colocation, which are further anticipated to boost the growth of the global data center colocation market.
Data center colocation market is anticipated to witness significant opportunities and is estimated to grow at a CAGR of around 13 % over the forecast period i.e. 2019-2027. Data center colocation market is segmented by type and industry. On the basis of type, it is segmented into retail and wholesale colocation, out of which, the retail colocation segment is anticipated to hold the major share during the forecast period on account of increased data center outsourcing among small businesses due to increased costs and space constraints to set up their own servers with their expanding businesses. Moreover, retail data centers are also increasingly adopted among large scale businesses on the back of their ability to provide small setup at multiple geographical regions. On the basis of industry, healthcare sector is expected to account for highest growth rate over the forecast period. Rising need for standardized and secure digital infrastructure to keep records of the patients in an effective storage facility, is anticipated to drive the adoption of datacenter colocations in healthcare sector.
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With an increase in adoption of data center colocation across numerous business verticals across the globe, on account of, the scalability and flexibility provided by the data centers to ensure data security along with the ability to recover data in case of any unseen adversities, the market is anticipated to observe significant growth over the forecast period. Further, data center colocation provides cost effectiveness and energy efficiencies to all the organizations as it reduces the implementation and maintenance cost of information technology infrastructure. These are some of the notable factors that are predicted to boost the growth of the market in upcoming years.
Mergers of small and medium colocation centers in order to save costs and raise the security levels by adhering to compliances, are anticipated to drive the growth of the market in near future. Additionally, data center colocation provides an efficient, effective and high bandwidth connectivity at significantly lower price. These factors are estimated to support the growth of the market.
Security concerns pertaining to damage of hardware or loss of data, coupled with, the concerns related to inability of service providers to resolve IT issues in a timely manner are estimated to hamper the adoption of data center colocations, thereby negatively impacting the growth of the data center colocation market.
Our in-depth analysis of the data center colocation market includes the following segments:
On the basis of regional analysis, the data center colocation market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America and Middle East & Africa region, out of which, the market in North America is anticipated to hold significant share over the forecast period owing to presence of key players along with growing technological advancements leading to rise in number of data centers in the region. Further, the market in Europe is expected to witness growth at an incremental rate owing to implementation of strict regulations coupled with increasing investments in the data center colocation market. Furthermore, the market in Asia Pacific is expected to project highest growth rate on account of increased penetration of data centers across numerous sectors, combined with, rising investments in research and development of the market in the region.
The data center colocation market is further classified on the basis of region as follows:
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