Global Data Center Colocation Market 2022-2028

Global Data Center Colocation Market 2022-2028

The data center colocation market was valued at nearly $47.1 billion in 2021 and is estimated to grow at a CAGR of 13.6% during the forecast period (2022-2028). The market is driven by a significant rise in big data and the increasing adoption of cloud-based services owing to its flexibility and cost-effectiveness. The companies are adopting colocation services to enhance the flexibility and scalability of their business efficiency and effectiveness. Moreover, major companies are managing their business data through data center colocation as the deployment of an infrastructure facility involves a high cost that propels enterprises to shift to data center colocation services. Data center colocation is considered as a secure platform with cost-saving potential and capability to enhance performance and security. Due to these benefits, data center colocation is being significantly preferred in several application sectors such as banking, financial services and insurance (BFSI), government, and aerospace and defense.

The market is segmented on the basis of solution type and vertical. Based on the solution type, the market is classified into retailer colocation and wholesale colocation. Among these, retailer colocation is estimated to witness significant growth during the forecast period. The demand for retail colocation is high owing to the growing technological advancements in colocation facilities and saturation of the internal data center.

Based on verticals, the market is classified into BFSI, healthcare, IT & telecom, government & defense and others which include media and entertainment. BFSI segment held a significant share, owing to the high adoption of data center colocation in the BFSI sector as a large amount of data is processed by banking and financial firms.

Geographically, the market is segmented on the basis of regions including North America, Europe, Asia-Pacific, and Rest of the World (RoW). North America held the major share of 35.3% in the market in 2021 owing to the presence of major players, such as IBM Corp., AT&T Inc., and SoftBank Group Corp. in the region. A high number of data servers in the US creates demand for data center colocation which is also contributing to the growth of the market. In addition, well-developed IT infrastructure in the region is strengthening the growth of the market in the region. However, Asia-Pacific is estimated to witness significant growth in the market during the forecast period owing to the increasing presence of multinational companies coupled with increasing government initiatives in the region. The market in Asia-Pacific is growing at the highest CAGR of 14.4% during the forecast period.