Data Center Colocation Market: Healthcare Segment Is Expected To Register The Highest CAGR Over The Forecast Period

 Data Center Colocation Industry Overview

The global data center colocation market size is expected to reach USD 117.82 billion by 2028, recording a CAGR of 13.3% from 2021 to 2028, according to a study conducted by Grand View Research, Inc. Several businesses and cloud service providers are shifting toward colocation or multi-tenant data centers, which is a key factor contributing to the market growth. Colocation is the preferred choice among numerous enterprises as it offers increased cost benefits compared to building and maintaining their own data center facility. Colocation data centers also offer operational flexibility while scaling up infrastructure to accommodate larger data volumes. With the rising costs of land, property, and IT infrastructure, these data centers are a viable option for SMEs due to limited IT spending.

 

The proliferation of online shopping worldwide is anticipated to upkeep the market growth over the next seven years. An increase in the number of online shoppers translates to the generation of increased data volumes in the retail sector. This has led to increased investments in the IT infrastructure sector, especially in data centers. Several retailers are opting for colocation centers to save IT costs, which is further expected to drive market growth.

Countries, such as India, China, and the U.S., have strict data localization laws to prevent cross-border data transfers. The European Union implemented General Data Protection Regulation (GDPR) in 2018, which laid down the norms related to personal data transfer and usage. Such protection laws have propelled several enterprises to locate their data centers within the country borders and localize data storage. Colocation data centers have presented businesses with an opportunity of leasing the infrastructure at affordable rates in proximity to the user, while also scaling the infrastructure to accommodate data volumes. These factors are expected to increase the deployment of colocation facilities, thereby driving the market growth.

Data Center Colocation Market Segmentation

Grand View Research has segmented the global data center colocation market on the basis of colocation type, enterprise size, end-use, and region:

Based on the Type Insights, the market is segmented into Retail, and Wholesale.

• The retail type segment dominated the market with a share of over 72% in 2020 and is estimated to retain the leading position throughout the forecast period. Retail colocation enables enterprises to rent a part of space within a data center.

 

• The wholesale type segment is expected to register the highest growth rate over the forecast period owing to several major cloud service providers and hyperscalers moving toward wholesale colocation. Large enterprises have a wide customer base, which leads to the generation of substantial volumes of data and the need for large commercial space for accumulating their servers, in turn, creating a demand for wholesale colocation.

 

Based on the Size Insights, the market is segmented into SMEs, and Large Enterprises.

• The large enterprises segment dominated the market in 2020 with a share of over 62%. This high share is attributable to the high product demand among large organizations to manage and maintain data efficiently. 

 

• The SMEs segment is estimated to record the fastest CAGR over the forecast period due to the increasing number of SMEs and startups in developing countries, such as India and China. SMEs have financial limitations, due to which, cost reduction becomes a major factor for the organization’s growth.

 

Based on the End-use Insights, the market is segmented into Retail, BFSI, IT & Telecom, Healthcare, Media & Entertainment, and Others.

• The IT & telecom segment led the global market with a revenue share of more than 27% in 2020. The high share of this segment is attributed to the increased number of mobile internet users and the continued development of new applications and software in the industry.

 

• This number is bound to rise due to the increasing adoption of smartphones with advanced features. Meanwhile, the emergence of 5G is further expected to boost the IT & telecom sector growth, thereby creating large data volumes and driving the market growth.

 

• The healthcare segment is expected to register the highest CAGR over the forecast period owing to the increasing technological advancements in the hospital industry. 

 

Data Center Colocation Regional Outlook

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East & Africa (MEA)

 

Key Companies Profile & Market Share Insights

The market is fragmented and characterized by a high degree of competition. Major companies are focusing on enhancing their market share by adopting inorganic growth strategies, such as partnerships, acquisitions & mergers, and collaboration. For instance, in March 2020, Digital Realty Trust, Inc. announced the acquisition of InterXion with an aim to meet the demands for colocation and hyperscale requirements in the Americas, EMEA, and Asia Pacific regions.

Companies are also focusing on the geographical expansion of their business. For instance, in February 2020, Equinix, Inc. announced the launch of its data center in Melbourne, Australia, to support the demand from the government’s smart city development plans and the interconnection requirements of local customers. In October 2019, Cyxtera Technologies, Inc. partnered with CyrusOne Inc. to launch a facility in Amsterdam. Some of the key companies operating in the data center colocation market are:

• China Telecom Corp. Ltd.
• CoreSite Realty Corp.
• CyrusOne, Inc.
• Cyxtera Technologies, Inc.
• Digital Realty Trust, Inc.
• Equinix, Inc.
• Global Switch
• NaviSite
• NTT Communications Corp.
• Telehouse

 

Order a free sample PDF of the Data Center Colocation Market Intelligence Study, published by Grand View Research.

 

About Grand View Research

Grand View Research, U.S.-based market research and consulting company, provides syndicated as well as customized research reports and consulting services. Registered in California and headquartered in San Francisco, the company comprises over 425 analysts and consultants, adding more than 1200 market research reports to its vast database each year. These reports offer in-depth analysis on 46 industries across 25 major countries worldwide. With the help of an interactive market intelligence platform, Grand View Research Helps Fortune 500 companies and renowned academic institutes understand the global and regional business environment and gauge the opportunities that lie ahead.

 

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