Who are the Key Players in The Data Center Colocation Market?

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.

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.
• 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.

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.

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. 
• According to the GSM Association (GSMA), in 2019, about 3.8 people connected to the mobile internet, an increase of 250 million users from 2018.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.
• In addition, certain government regulations, such as the American Recovery and Reinvestment Act in 2014, have made it essential for public and private healthcare service providers in the U.S. to maintain Electronic Health Records (EHRs) of patients. This has led to the need for data storage solutions among healthcare service providers.
• The growing volumes of patient data across the globe are anticipated to increase product adoption in the healthcare sector. Moreover, the global pandemic is expected to increase the need for data storage in the healthcare sector for research purposes.

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. Companies are also focusing on the geographical expansion of their business.

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.