Data Center Colocation Market Size, Share & Trends Analysis Report By Colocation Type (Retail, Wholesale), By Enterprise Size (Large, SMEs), By Tier Level (Tier 1, Tier 2), By End-use (BFSI, Retail), By Region, And Segment Forecasts, 2023 - 2030

Data Center Colocation Market Size, Share & Trends Analysis Report By Colocation Type (Retail, Wholesale), By Enterprise Size (Large, SMEs), By Tier Level (Tier 1, Tier 2), By End-use (BFSI, Retail), By Region, And Segment Forecasts, 2023 - 2030

Data Center Colocation Market Growth & Trends

The global data center colocation market size is anticipated to reach USD 155.40 billion by 2030, growing at a CAGR of 14.2% from 2023 to 2030, according to a recent study by Grand View Research, Inc. Various CSPs and businesses are opting for multi-tenant or colocation data centers, which has been a significant factor driving the growth of the market. Colocation is among the most preferred choices among businesses, owing to cost benefits compared to building and managing a private data center facility. Moreover, a colocation data center offers better operational flexibility when scaling up infrastructure to accommodate large data volumes. Considering the increasing cost of property, land, and IT infrastructure, colocation data centers are the best options for SMEs owing to limited capital expenditure capability.

The increasing use of e-commerce shopping has been anticipated to drive market growth in the coming years. The data centers offer various benefits in the e-commerce industry, including better scalability, data reliability, enhanced security, improved customer experience, and reduced cost. The benefits offered by the data centers in the e-commerce industry have increased the IT expenditure of e-commerce companies. Moreover, opting for data center colocation would help in reducing costs when compared to setting up and maintaining a private data center, which smaller e-commerce companies are highly adopting. Thus, the growth of data center colocation in the e-commerce industry is expected to rise, thereby driving industry growth.

Several countries, such as the U.S., China, and India, have strict data location laws, preventing cross-border data transfer. The EU also implemented the GDPR in 2018, laying the foundation norms for personal data transfer and usage. Implementing such laws has resulted in the increased setting up of data centers within those countries and localized data storage. Furthermore, the colocation data centers offer businesses leasing spaces within data centers at reasonable costs, proximity to the business, and, the best part, the opportunity to scale up to accommodate larger data volumes. These aspects have contributed to the growth of the market and are expected to continue supporting this growth in the years to come.

Data Center Colocation Market Report Highlights

• The wholesale segment is projected to grow at a CAGR of more than 17% over the forecast period. Large enterprises have a stronger customer base, which has led to the generation of large volumes of data, which has resulted in the increased demand for data centers among large enterprises
• The SMEs segment is projected to witness the fastest CAGR of over 16% from 2023 to 2030. The growth of the SMEs segment can be attributed to the increasing IT expenditure and lower costs of renting spaces in the colocation data center, among others
• The healthcare end-use segment is projected to witness the fastest CAGR of more than 19% from 2023 to 2030. Cloud computing in the healthcare industry offers benefits, such as reliability & scalability, remote care opportunities, better patient engagement, and improved operational efficiencies
• The key market players have a wider sales channel, thereby driving the market’s growth

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