Dublin, Jan. 02, 2025 (GLOBE NEWSWIRE) -- The "Data Center Colocation Market Report by Type, Organization Size, End Use Industry, and Region 2024-2032" report has been added to ResearchAndMarkets.com's offering.
The global data center colocation market size reached US$ 65.0 Billion in 2023. Looking forward, the publisher expects the market to reach US$ 177.3 Billion by 2032, exhibiting a growth rate (CAGR) of 11.79% during 2023-2032.
The market is experiencing steady growth driven by the increasing demand for scalable, flexible IT infrastructure, the rising focus on energy efficiency and sustainability, and the continuous expansion of data-intensive industries such as IT and telecom, e-commerce, and content delivery networks. 
Rapid digitization across industries
The global market is growing due to the widespread shift to digital processes and the resulting demand for improved IT effectiveness in different sectors. Along with this, the growing reliance on Internet of Things (IoT) gadgets and the increasing consumption of digital content are contributing factors to the need for data center colocations, emphasizing their importance in the global digital landscape. On average, American households that subscribe spend $61 per month on four SVOD services. Moreover, 68% of respondents in the survey stated that they pay for a TV subscription or live-streaming TV to gain access to content that is not offered on streaming video platforms.
Energy efficiency and sustainability concerns
The accelerating focus on environmental sustainability and energy efficiency is significantly supporting the market. The data center colocation market 2021 reached a value of US$ 50.3 Billion. Data centers, recognized for their significant energy use, are transitioning to embrace more environmentally friendly measures. Colocation centers are at the forefront of this transition by using energy-saving cooling systems, integrating renewable energy sources, and constructing facilities that lower carbon emissions. This change addresses both the growing need for green practices from consumers and regulatory bodies, as well as providing long-term financial advantages in operations.
Increasing demand for hybrid cloud solutions
Hybrid cloud solutions play a major role in driving the data center colocation market growth. Companies are more and more interested in the flexibility provided by hybrid clouds, enabling them to adapt their IT infrastructure to changing needs. In December 2023, Lenovo announced that it has widened its hybrid cloud platform for AI by introducing new ThinkAgile hyperconverged solutions as well as ThinkSystem servers that enhance cloud deployment, hybrid connectivity, and AI capabilities, all powered by the latest Intel Xeon Scalable Processors. In addition, colocations facilitate companies in seamlessly integrating their cloud operations by providing sufficient bandwidth, reliability, and security.
Data Center Colocation Market Segmentation:
Retail colocation accounts for the majority of the market share
Retail colocation stands as the most prominent segment in the global market, chiefly as it caters effectively to the needs of small to medium-sized businesses (SMBs) with its accessibility and scalability. This colocation model allows businesses to rent space for their servers and computing hardware within a shared data center, offering the crucial benefits of physical security, power, cooling, and networking connectivity essential for their operations.
It's an attractive option for companies needing limited space and power, providing a cost-efficient alternative to the significant investments required for wholesale colocation or constructing a private data center. The flexibility to scale operations as necessary, combined with the perks of superior connectivity and managed services, keeps retail colocation in high demand among SMBs looking to enhance their IT infrastructure. Therefore, this is significantly influencing the data center colocation market price.
Large enterprises hold the largest share of the industry
Large enterprises form the most significant portion of the market by organization size, driven largely by their extensive requirements for IT infrastructure and the crucial need for data security, compliance, and business continuity. The need for vast spaces and considerable power to accommodate their large server farms and networking gear positions these organizations as ideal candidates for colocation services.
Furthermore, the opportunity for large organizations to utilize advanced technologies and services offered by colocation providers allows them to concentrate their resources on core business functions, thereby sharpening their competitive edge in a digital-dominated market landscape.
IT and telecom represent the leading market segment
The IT and Telecom sector, which has extensive data management and computational requirements, is the biggest user segment in the market. The sector is mainly driven by the constant need for data storage, processing power, and fast, dependable connectivity to support a range of services such as cloud computing, mobile broadband, VoIP, and different streaming options. Colocation centers offer IT and Telecom companies the ability to scale, ensure reliability, and maintain security for delivering uninterrupted services worldwide.
Additionally, these organizations have the opportunity to connect through a wide range of connectivity choices and interact within a diverse environment that includes network, cloud, and content providers. Collaborative efforts greatly improve how well operations are done, reduce costs, and importantly, cut down the time needed for developing and launching new services.
North America leads the market, accounting for the largest data center colocation market share
North America is the largest market region in the data center colocation market as the biggest region because of its advanced technology infrastructure, extensive regulatory framework, and significant number of colocation service providers and users. In the US, many top global tech companies are needing reliable, top-notch, and expandable data center solutions for their large digital activities.
The high level of development in IT and telecommunications industries in North America, along with strict focus on cybersecurity and data privacy legislation, drives the need for secure colocation services. Moreover, data center colocation market trends, such as increasing use of cloud computing, the Internet of Things (IoT), and big data analytics by companies in North America continues to fuel the expansion of the colocation market, solidifying the region's position as a prominent player in this industry.
Competitive Landscape:
Key players in the industry are actively seeking to increase their global footprint and improve their services to meet the growing needs of digital innovation. Data center colocation market recent developments include increasing significant funds towards building eco-friendly and energy-efficient data centers, integrating renewable energy sources and innovative cooling techniques to reduce their environmental impact.
Moreover, partnerships and purchases are important tactics, designed to enhance their range of services and improve connectivity choices for their customers. Additionally, colocation providers are integrating advanced interconnection services and cloud on-ramps to meet the increasing need for hybrid and multi-cloud environments. This method guarantees continuous access to leading cloud services, enabling customers to create resilient and flexible IT infrastructures.
Data Center Colocation Market Analysis:
- Major Market Drivers: The increasing focus on energy efficiency and sustainability, along with the rapidly rising need for hybrid cloud solutions, continues to drive market expansion.
- Key Market Trends: The accelerating focus on sustainability and energy efficiency acts as a key factor, prompting providers to integrate green technologies. With businesses looking for colocation services that can meet these requirements, the shift towards hybrid cloud setups and the need for intricate cloud deployments are driving data center colocation market demand.
- Geographical Trends: The rise in developing regions is driven by quickly growing digital economies and increased internet accessibility. At the same time, North America and Europe continue to lead in established markets due to their advanced technological infrastructure and strict regulations.
- Competitive Landscape: Established companies and newcomers are offering more advanced, environmentally friendly, and affordable colocation services. Businesses that choose to invest in renewable energy and advanced cooling methods are creating data center colocation market opportunities to outshine their competitors.
- Opportunities and Challenges: Despite the significant challenges of high costs at the beginning and during operation, moving towards digital platforms, the escalating use of IoT, and the need for data compliance is increasing data center colocation market revenue.
Some of the major market players in the data center colocation industry include
- AT&T Inc.
- CenturyLink Inc.
- China Telecom Corporation Limited
- Coresite Realty Corporation
- Cyrusone Inc.
- Cyxtera Technologies Inc.
- Digital Realty Trust Inc.
- Equinix Inc.
- Global Switch Limited
- Internap Corporation
- KDDI Corporation
- NTT Communications Corporation (Nippon Telegraph and Telephone Corporation)
- Verizon Enterprise Solutions Inc.
Key Attributes:
| Report Attribute | Details |
| No. of Pages | 139 |
| Forecast Period | 2023 - 2032 |
| Estimated Market Value (USD) in 2023 | $65 Billion |
| Forecasted Market Value (USD) by 2032 | $177.3 Billion |
| Compound Annual Growth Rate | 11.8% |
| Regions Covered | Global |
Key Topics Covered:
1 Preface
2 Scope and Methodology
3 Executive Summary
4 Introduction
4.1 Overview
4.2 Key Industry Trends
5 Global Data Center Colocation Market
5.1 Market Overview
5.2 Market Performance
5.3 Impact of COVID-19
5.4 Market Forecast
6 Market Breakup by Type
6.1 Retail Colocation
6.2 Wholesale Colocation
7 Market Breakup by Organization Size
7.1 Small and Medium Enterprises
7.2 Large Enterprises
8 Market Breakup by End Use Industry
8.1 BFSI
8.2 Manufacturing
8.3 IT and Telecom
8.4 Energy
8.5 Healthcare
8.6 Government
8.7 Retail
8.8 Education
8.9 Entertainment and Media
9 Market Breakup by Region
10 SWOT Analysis
10.1 Overview
10.2 Strengths
10.3 Weaknesses
10.4 Opportunities
10.5 Threats
11 Value Chain Analysis
12 Porters Five Forces Analysis
13 Price Analysis
14 Competitive Landscape
14.1 Market Structure
14.2 Key Players
14.3 Profiles of Key Players
For more information about this report visit https://www.researchandmarkets.com/r/9duq0r
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