Data Center Colocation Market Size, Industry Share, Report 2028

Data Center Colocation Market: Industry Perspective

The global data center colocation market size was worth around USD 56291.70 million in 2021 and is predicted to grow to around USD 1350315.73 million by 2028 with a compound annual growth rate (CAGR) of roughly 15.7% between 2022 and 2028.

The report analyzes the global data center colocation market's drivers, restraints/challenges, and the effect they have on the demands during the projection period. In addition, the report explores emerging opportunities in the data center colocation industry.

Request Free Sample

Data Center Colocation Market: Overview

The data center colocation market is expected to see an exponential increase in demand over the coming years owing to rising demand for digital solutions and increasing digital infrastructure on a global level. The data center colocation market is expected to be driven by rising demand for data centers owing to increasing demand for large volumes of data that are to be managed. Data center colocation enables cost-cutting and reduction of expenses instead of rising IT spending for organizations.

Rapid urbanization and digitization, increasing technological proliferation, rising adoption of cloud solutions,and increasing investments in data center establishment are some of the other factors that will influence the data center colocation market potential through 2028.

COVID-19 Impact Analysis:

The COVID-19 pandemic provided a boost for the data center colocation market as the world moved towards the digital technology trend to manage life during the situation of a worldwide pandemic. Lockdown restrictions prohibited outdoor activity and shuttered multiple office spaces which affected businesses on a large scale and these organizations then shifted to a digital approach to work to keep operations running in these times.  

Increasing adoption of cloud-based technology and more organizations shifting to a cloud infrastructure resulted in a sudden surge of increase in data volumes and hence boosted the data center colocation market potential. However, the market did not attain its full growth due to restrictions in 2020.

In the post-pandemic era, the data center colocation market is expected to grow at exceptional CAGR through 2028. Increasing digitization and rising volume of data are predicted to be prominent trends driving data center colocation market potential.

Request Free Sample

Data Center Colocation Market: Growth Drivers

Increasing Digitization and Adoption of Cloud Technology

Digitization has substantially increased over the past few years and this is anticipated to be a major trend driving the data center colocation market growth through 2028. Increasing adoption of cloud technology by large enterprises and SMEs is also expected to further cement the data center colocation market potential over the forecast period.

Increasing focus on managing IT expenditure and efforts of SMEs to mitigate the cost of data center operations and manage spending to maximize profits and minimize risks.

Data Center Colocation Market: Opportunities

Increasing Popularity of OTT  

Streaming services have become immensely popular in recent times and this trend has substantially increased the demand for data centers and data management services across the world. The increasing penetration of OTT platforms on a global scale is also expected to boost the data center colocation market growth over the forecast period.

These platforms will be increasing their streaming capacities by deploying new data centers across the world and increasing the scope of their offerings on a global scale through 2028.

Global Data Center Colocation Market: Segmentation

The global data center colocation market is segmented based on type, end-user, industry, and region.

Based on type, the global data center colocation market is divided into retail colocation and wholesale colocation.

By end-user, the data center colocation market is segmented into small and medium-sized enterprises (SMEs) and large enterprises. Large enterprises are expected to hold a dominant market share over the forecast period and adoption colocation is increasing in these enterprises to decrease IT spending and maximize profit margins.

By industry, the market is divided into Banking, Financial Services, and Insurance (BFSI), IT and telecom, government and defense, healthcare, research and academics, retail, energy, manufacturing, and others. The IT and telecom industry is expected to account for a major market share over the forecast period. Increasing technological proliferation and rising digitization are expected to be prominent trends propelling the growth of the data center colocation market via this segment.

Data Center Colocation Market: Report Scope

Data Center Colocation Market: Regional Landscape

North America region leads the global Data Center Colocation market in terms of revenue and volume share and is anticipated to maintain this stance over the forecast period. The presence of key data center colocation companies and the rapid adoption of novel technologies in this region are anticipated to be major factors driving the growth of the data center colocation market in this region.

The United States is anticipated to be the most lucrative market in this region owing to the presence of key data center colocation companies and rising demand for cloud technology and platforms from organizations as they move to digital infrastructure. The rapid technological proliferation will play a crucial role in propelling the data center colocation market potential through 2028.

Recent Developments

• In May 2020 – Zadara Storage Inc. and Cyxtera announced their collaborative effort to provide progressive capacity for data and power centers by establishing server farms all over the world.

Data Center Colocation Market: Competitive Landscape

Some of the main competitors dominating the global data center colocation market include -  

• NTT Communication Corporation (Japan)
• Digital Realty Trust, Inc. (US)
• Cyxtera Technologies, Inc. (US)
• CyrusOne Inc. (US)
• Equinix, Inc. (US)
• Global Switch (UK)
• AT&T, Inc. (US)
• CoreSite Realty Corporation (US)
• China Telecom Corporation Limited (China)
• Verizon Enterprise Solutions, Inc. (US)

The global data center colocation market is segmented as follows:

By Type

• Retail Colocation
• Wholesale Colocation

By End-User

• Small and Medium-Sized Enterprises (SMEs)
• Large Enterprises

By Industry

• Banking, Financial Services, and Insurance (BFSI)
• IT and Telecom
• Government And Defense
• Healthcare
• Research And Academics
• Retail
• Energy
• Manufacturing
• Others (Media and Entertainment, and Transportation and Logistics)

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France 
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa