Colocation Facilities in the US - Industry Market Research Report

Colocation Facilities in the US - Industry Market Research Report

Colocation Facilities in the US

The industry has experienced impressive growth over the past five years as companies shifted operations online during the pandemic. Acting as an intermediate step between internal server hosting and leasing space from a cloud provider, colocation services offer a middle ground. Operators of colocation services build a space conducive to computing, with massive electrical infrastructure, cooling capacity and high security, but clients will fill the racks they rent on a yearly basis with their own servers. This business model is most attractive to moderately sized businesses located within physical proximity of the colocation center to enable moderate oversight of the hardware. As a result, IBISWorld estimates that industry revenue will increase at a CAGR of 6.7% over the five years to 2023, reaching $55.4 billion, including growth of 6.9% in that year.

Operators own and operate data centers that primarily lease equipment space to customers. Companies in the industry also offer auxiliary services including power management, security and network neutrality. Customers generally use industry services as off-site data storage to back up their data or to enable them to focus on other parts of their business without paying for these operations.

This report covers the scope, size, disposition and growth of the industry including the key sensitivities and success factors. Also included are five year industry forecasts, growth rates and an analysis of the industry key players and their market shares.