Data Center Colocation Market Introduction

Data center colocation refers to the practice of housing privately-owned servers and networking equipment in a third-party data center facility. The market for data center colocation has grown rapidly in recent years as companies seek to outsource their data center operations to reduce costs and increase efficiency.The data center colocation market is driven by the increasing demand for data storage and processing capabilities, as well as the need for disaster recovery and business continuity solutions. Additionally, the trend towards cloud computing and the adoption of new technologies such as the Internet of Things (IoT) and artificial intelligence (AI) are further fueling the growth of the data center colocation market.The market for data center colocation services is highly competitive, with a range of players offering a variety of services including space, power, cooling, connectivity, and security. Major players in the market include Equinix, Digital Realty Trust, NTT Communications, CenturyLink, and Verizon.Data center colocation services can be used by a wide range of industries, including healthcare, finance, telecommunications, and technology. The benefits of using colocation services include reduced capital expenditures, improved security, access to advanced networking technologies, and the ability to scale resources on demand.Overall, the data center colocation market is expected to continue growing in the coming years, driven by increasing demand for cloud computing and data storage, as well as the need for disaster recovery and business continuity solutions.

Data Center Colocation Market Size

The global data center colocation market size was valued at $31.2 billion in 2020 and is projected to reach $85.5 billion by 2027, growing at a CAGR of 14.5% from 2020 to 2027.The Asia-Pacific region is expected to dominate the data center colocation market, followed by North America and Europe. The growth of the market in Asia-Pacific can be attributed to the increasing adoption of cloud computing and the growth of digitalization in the region.In terms of verticals, the IT and telecom segment is expected to hold the largest market share in the data center colocation market, due to the increasing demand for cloud-based services and the growth of the internet of things (IoT) in the IT industry.Overall, the data center colocation market is expected to see continued growth in the coming years, driven by the increasing demand for cloud computing, the need for disaster recovery and business continuity solutions, and the adoption of new technologies such as IoT and artificial intelligence.

Data Center Colocation Market Share

The data center colocation market is highly competitive, with several key players holding significant market share. According to a report by MarketsandMarkets, the top players in the global data center colocation market include:

1. Equinix Inc.
2. Digital Realty Trust
3. NTT Communications
4. CenturyLink
5. Verizon Communications
6. AT&T Inc.
7. China Telecom Corporation Limited
8. Global Switch
9. CyrusOne
10. CoreSite Realty Corporation

Equinix is currently the largest player in the data center colocation market, holding a significant market share due to its extensive global network of data centers and advanced interconnection capabilities.Digital Realty Trust is the second largest player in the market, with a strong presence in North America and Europe. NTT Communications, CenturyLink, and Verizon Communications are also major players in the market, with a focus on providing global data center colocation services to enterprise customers.Overall, these top players are expected to continue dominating the data center colocation market in the coming years, due to their established presence, extensive infrastructure, and advanced service offerings. However, there is also room for smaller players to enter the market and compete on a regional or specialized basis.

Data Center Colocation Market Trends

Here are some recent trends in the Data Center Colocation market:

1. Increased demand for edge computing: As more data is generated at the edge of networks, there is an increased need for data center colocation facilities that are closer to end-users. This has led to the development of smaller, regional colocation centers that can provide lower-latency connectivity.
2. Growing demand for hybrid and multi-cloud solutions: Many companies are adopting a hybrid cloud strategy that combines public and private clouds. This has led to increased demand for colocation providers that can offer connectivity to multiple cloud platforms.
3. Adoption of renewable energy: Data center colocation providers are under increasing pressure to reduce their carbon footprint. Many providers are investing in renewable energy sources, such as solar and wind power, to power their facilities.
4. Expansion in emerging markets: There is growing demand for data center colocation services in emerging markets, such as India, China, and Southeast Asia. This has led to the expansion of colocation providers into these regions.
5. Increased focus on security: With the increasing threat of cyber attacks, data center colocation providers are placing a greater emphasis on security. This includes implementing multi-layered security measures, such as biometric access controls and 24/7 monitoring.

Data Center Colocation Market Driving Factors

The Data Center Colocation market is driven by several factors, including:

1. Rapidly growing demand for digital services: The increasing use of cloud computing, big data analytics, IoT, and other digital services is driving demand for data center colocation facilities. Companies need reliable, secure, and scalable data center infrastructure to support their digital operations.
2. Cost savings: Colocation providers offer significant cost savings compared to building and maintaining an in-house data center. By outsourcing their data center needs, companies can reduce capital expenditures, lower operating costs, and avoid the need for ongoing hardware upgrades and maintenance.
3. Scalability: Data center colocation providers offer flexible, scalable solutions that can easily accommodate changing business needs. Companies can easily increase or decrease their IT infrastructure as needed, without having to worry about the costs and complexities of building and maintaining their own data center.
4. Disaster recovery and business continuity: Colocation providers offer reliable backup power, redundant connectivity, and disaster recovery services, which are critical for ensuring business continuity in the event of a natural disaster, power outage, or other disruptions.
5. Compliance and security: Data center colocation providers are often certified to comply with various security and compliance standards, such as SOC 2, HIPAA, and PCI DSS. By outsourcing their data center needs to a reputable provider, companies can ensure that their data is secure and compliant with industry regulations.

Data Center Colocation Market Regional Analysis

The data center colocation market is growing globally, with significant growth expected across various regions.North America is currently the largest market for data center colocation services, with the United States leading the region in terms of market share. The region's dominance can be attributed to the presence of several large enterprises and cloud service providers, as well as the adoption of advanced technologies such as 5G, IoT, and artificial intelligence.Europe is another major market for data center colocation services, driven by the growth of cloud computing and the increasing adoption of digitalization across various industries. The region is expected to see continued growth in the coming years, with major players such as Equinix, Digital Realty Trust, and Interxion holding significant market share.The Asia-Pacific region is expected to see the highest growth in the data center colocation market, due to the increasing adoption of cloud computing and the growth of digitalization in the region. China, Japan, India, and Australia are among the key countries contributing to the growth of the data center colocation market in the Asia-Pacific region.Latin America and the Middle East & Africa are also expected to see growth in the data center colocation market, driven by the adoption of new technologies and the increasing demand for data storage and processing capabilities in these regions.Overall, the data center colocation market is growing globally, with each region presenting unique opportunities and challenges for players in the market.

Data Center Colocation Market Forecasts 2030

The global data center colocation market size is expected to grow from USD 31.52 billion in 2020 to USD 62.30 billion by 2025, at a compound annual growth rate (CAGR) of 14.5% during the forecast period.Factors driving the growth of the data center colocation market include increasing demand for digital services, cost savings, scalability, disaster recovery and business continuity, and compliance and security requirements. Additionally, the market is expected to benefit from the growth of edge computing, the adoption of hybrid and multi-cloud solutions, and increasing investment in renewable energy. The report also suggests that the Asia Pacific region is expected to grow at the highest CAGR during the forecast period, due to factors such as increasing data center construction and rising demand for cloud services.

Data Center Colocation Market Key Industry Players

The data center colocation market has several key industry players, including:

1. Equinix Inc.: Equinix is a leading provider of data center colocation services, with over 220 data centers across five continents. The company offers a range of services, including interconnection solutions, cloud connectivity, and managed services.
2. Digital Realty Trust: Digital Realty Trust is another major player in the data center colocation market, with a global network of over 280 data centers in 48 markets. The company provides a range of services, including colocation, interconnection, and managed services.
3. NTT Communications: NTT Communications is a subsidiary of Nippon Telegraph and Telephone Corporation (NTT), a Japanese telecommunications company. The company provides data center colocation services across the globe, with a focus on Asia-Pacific.
4. CenturyLink: CenturyLink is a US-based telecommunications company that provides a range of services, including data center colocation, cloud computing, and managed services. The company has a global network of data centers and provides services to enterprise customers.
5. Verizon Communications: Verizon Communications is another US-based telecommunications company that provides data center colocation services. The company has a global network of data centers and provides services to enterprise customers.
6. AT&T Inc.: AT&T is a US-based telecommunications company that provides data center colocation services to enterprise customers. The company has a global network of data centers and provides a range of services, including interconnection and managed services.
7. China Telecom Corporation Limited: China Telecom is a state-owned telecommunications company in China that provides data center colocation services to enterprise customers. The company has a large network of data centers across China and provides a range of services, including cloud computing and managed services.
8. Global Switch: Global Switch is a UK-based data center provider that operates data centers in Europe and Asia-Pacific. The company provides data center colocation services to enterprise customers, as well as cloud and managed services.
9. CyrusOne: CyrusOne is a US-based data center provider that operates data centers in the United States, Europe, and Asia. The company provides data center colocation services to enterprise customers, as well as cloud and managed services.
10. CoreSite Realty Corporation: CoreSite is a US-based data center provider that operates data centers in major metropolitan areas across the United States. The company provides data center colocation services to enterprise customers, as well as interconnection and managed services.