Emerging Trends to Reshape the Colocation Edge Data Center Market: Driving Efficiency With High-Density Colocation For AI Workloads as a Key Influencer

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Colocation Edge Data Center Market Size Valuation Forecast: What Will the Market Be Worth by 2025?
In recent times, there has been a significant surge in the size of the colocation edge data center market. Its projected growth is from $9.88 billion in 2024 to $12.44 billion in 2025, following a compound annual growth rate (CAGR) of 26.0%. Factors such as increased investment in digital transformation, augmented usage of cloud-based solutions, broadening of the IT and telecom industries, establishment of new data center infrastructures, and a rise in the use of online services have all contributed to this growth during the historic period.

Colocation Edge Data Center Market Size Forecast: What's the Projected Valuation by 2029?
The market for colocation edge data centers is set to experience significant expansion in the coming years, with projections suggesting it will reach $31 billion by 2029, growing at a Compound Annual Growth Rate (CAGR) of 25.6%. This predicted growth within the forecast period can be linked to the increasing adoption of 5G networks, the growing demand for edge data centers as a service, the need for more sophisticated technologies, a surge in the utilization of cloud services, and an enlargement in data centers and edge computing solutions. Within this period, the main trends to watch include the necessity for enhanced data management and customer services, the application of edge solutions, the development of hybrid cloud infrastructures, the rising incorporation of cloud-based solutions, and the integration of advanced technologies into existing systems.

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What Are the Drivers Transforming the Colocation Edge Data Center Market?
The escalating use of 5G networks is anticipated to stimulate the expansion of the colocation edge data center market in the coming years. 5G network technology symbolizes a crucial improvement over its antecedents, such as 2G, 3G, and 4G/LTE or Long-Term Evolution. The uptake of 5G is fueled by the compulsions for swifter data speeds, reduced latency, and heightened network capacity to cater to the escalating requisites of IoT, streaming services, and budding technologies like autonomous vehicles and smart cities. Colocation edge data centers facilitate the extensive application of 5G technology by proffering low-latency, high-performance computing resources at the network edge. These facilities furnish edge computing, scalability, reliability, and IoT deployments, offering the foundational structures needed to take full advantage of 5G networks. For instance, in April 2023, as per 5G Americas, a trade organization based in the US, the global 5G wireless connections witnessed a surge of 76% from the culmination of 2021 till the end of 2022, amassing a total of 1.05 billion connections. Hence, the escalating uptake of 5G networks is spurring the expansion of the colocation edge data center market.

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What Long-Term Trends Will Define the Future of the Colocation Edge Data Center Market?
Leading corporations in the colocation edge data center market are intensifying their efforts to create cutting-edge solutions customized for specific uses, such as high-density colocation developed for AI workloads, to gain a competitive advantage. These specialized services cater to the high computing and storage demands of AI applications through scalable infrastructure and advanced power management. For instance, DCX, a newcomer in the data center industry from the US, launched a new brand dedicated to high-density colocation for AI workloads in October 2022. DCX is dedicated to meeting the evolving needs of digital infrastructure. Their premier location, DCX Goodyear 1, situated in the Greater Phoenix region, is designed to facilitate AI and machine learning applications. The facility, positioned in Goodyear, an emerging data center hotspot in Phoenix, is sprawled over a six-acre campus and operates two active suites capable of handling up to six megawatts of power, with a possible expansion to 12 megawatts. Each data suite, featuring critical infrastructure components like UPS systems and waterless cooling systems, has a capacity ranging from 700 kW to 1 megawatt.

Which Segments in the Colocation Edge Data Center Market Offer the Most Profit Potential?
The colocation edge data center market covered in this report is segmented -

1) By Type: Retail Colocation, Wholesale Colocation
2) By Application: Banking, Financial Services And Insurance (BFSI), Energy, Government And Defense, Healthcare, Information Technology And Telecom, Manufacturing, Retail, Other Applications
3) By End-Use: Small And Midsize Enterprise (SMEs), Large Enterprises

Subsegments:
1) By Retail Colocation: Single Rack Or Cabinet Leasing, Customized Space Solutions For Small To Medium Businesses, Managed Services With Colocation, Cloud Connectivity Solutions For Retail Colocation, Colocated Infrastructure For Enterprises And SMBs, Scalable And Flexible Rack Space Options
2) By Wholesale Colocation: Large-Scale Data Center Leasing, Dedicated Space For Large Enterprises And Service Providers, High-Density Colocation Solutions, Direct Connectivity To Cloud Providers, Customized Power, Cooling, And Rack Configurations, Cross-Connects And Interconnection Services For Wholesale Clients

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Which Firms Dominate the Colocation Edge Data Center Market by Market Share and Revenue in 2025?
Major companies operating in the colocation edge data center market are Verizon Communications Inc., Dell Inc., Huawei Technologies Co. Ltd., NTT Communications Corporation, Hitachi Ltd., China Telecom Global Limited, International Business Machines Corporation, Cisco Systems Inc., KDDI Corporation, Schneider Electric SE, Fujitsu Limited, Hewlett Packard Enterprise Company, NVIDIA Corporation, NEC Corporation, Eaton Corporation PLC, Inventec Corporation, ASUSTeK Computer Inc., Singapore Telecommunications Limited, Equinix Inc., Vertiv Group Corporation, Super Micro Computer Inc., Digital Realty Trust Inc., Rackspace Inc., Arm Ltd., Inspur Co. Ltd., Arrcus Inc.

Which Regions Offer the Highest Growth Potential in the Colocation Edge Data Center Market?
North America was the largest region in the colocation edge data center market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the colocation edge data center market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.

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