Data Center Colocation Market To Grow At Over 14.0% CAGR during 2020-2030

The global data center colocation market value stood at $42.1 billion in 2019, and it is predicted to rise at a CAGR of 14.8% from 2020 to 2030 (forecast period). The market is being propelled by the creation of large volumes of data, growing use of cloud on-ramp, the financial and disaster mitigation benefits associated with data colocation, and extremely high maintenance costs of private data centers. Moreover, the data colocation model enables enterprises to rent the space and bandwidth of a data center for storing its information technology (IT) hardware, servers, and data.

The high maintenance costs of private data centers is one of the major data center colocation market growth drivers. With rapid digitization and surging adoption of internet of things (IoT) and artificial intelligence (AI), large volumes of data are being generated, which must be cost-effectively and efficiently managed and securely stored. The construction of a private storage facility can cost $200 per square foot excluding the $10,000 per mile expenditure on fiber cabling.

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Unlike large companies, small and medium enterprises (SMEs) generally can't afford such facilities and hence, they are increasingly preferring to adopt data colocation center services over developing private data centers. Apart from these factors, the growing need for edge data centers is also creating immense growth opportunities for the players operating in the data center colocation market. Edge data centers are basically small data colocation facilities located near the enterprises they cater to with cloud computing and cached content resources.

These centers are connected to several bigger facilities or establishments that centrally process the data with the help pf analytics and machine learning and offer cloud computing services. Depending on type, the market is divided into wholesale colocation and retail colocation categories. Of these, the wholesale colocation category is predicted to demonstrate faster growth in the market in the coming years. This is credited to the burgeoning need for cloud and large storage space among large companies for efficient data management and storage.

Higher bandwidth, strategic colocation, higher power capacity, and reduced total cost of ownership (TCO) are the various benefits offered by these facilities. Additionally, wholesale data colocation services assist companies in meeting the strict regulatory requirements pertaining to data privacy and security. Geographically, North America will contribute the highest revenue to the data center colocation market in the forthcoming years, as per the estimates of the market research company, P&S Intelligence.

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This is attributed to the surging number of data centers and data center colocation service providing companies in the region. Moreover, many leading technology firms, such as Amazon.com Inc., Facebook Inc., and Google LLC, are located and expanding their operations in the region, which is further augmenting the generation of large volumes of data that require efficient storage. This is subsequently boosting the need for colocation services, as these services will aid companies in managing their business operations and IT infrastructure.

Thus, the demand for data center colocation services will soar in the coming years, primarily because of the generation of large volumes of data and rapid digitization of business operations across the world.

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This release was published on openPR.