Americas Data Center Colocation Market Size, Share, Opportunities, COVID-19 Impact, And Trends By Colocation Model (Wholesale, Retail), By End Users (Small, Medium, Large), By Industry Vertical (Banking And Financial Services, Manufacturing, Communication And Technology, Healthcare, Energy, Government, Media And Entertainment, Others), And By Country - Forecasts From 2022 To 2027

America's data center colocation market is expected to grow at a CAGR of 10.35%, reaching a market size of US$ 35.704 billion in 2027 from US$ 17.922 billion in 2020.

Information and communications technology are at the heart of the digital economy. It is estimated that increasing investments in information and communications technology will positively impact the colocation market during the forecasted period. The major growth drivers of America's data center colocation market are the presence of a large number of small and big players, increasing adoption of cloud computing solutions, and rising demand from service providers.

The other major factor augmenting the growth of the colocation market is the increasing focus on data privacy and regulation in the country. Enterprises operating in the entertainment and media, healthcare, communication, and government sectors are increasingly outsourcing their IT infrastructure needs as well as opting for colocation space to focus on their core business operations and reduce operating costs.

Major players like CyrusOne, Digital Realty, Equinix, and others have been rapidly expanding their existing product portfolios to cater to a wide range of customers. In fact, in June 2018, Rackspace Inc. launched Rackspace Colocation to support organizations seeking to reduce the total cost of ownership while simultaneously improving their scalability and strengthening their disaster recovery capabilities. Similarly, in May 2018, Ascenty announced plans of investing over US$276 million in various projects which include setting up its second data center facility in Brazil by the first half of 2019, which is likely to bring 80,700 sqft of colocation space to the market.

 Additionally, 5G technology is expected to be launched during the forecast period, which is further anticipated to increase the volume of internet traffic and the requirement for the storage of digital data. This is expected to supplement the growth of the data center colocation market with an increasing amount of data that will be required to be stored in the cloud, and firms with a limited capacity will demand colocation services to meet the growing demand effectively.

Furthermore, Mexico is slowly becoming a hub for Data Centers in the North American region, with major companies like IBM, Reddit, and others have opened new Data Centers in the country. With more companies expanding their operations in the country, the demand for colocation space will grow, creating significant opportunities for colocation service providers. In fact, in January 2018, McAllen Data Center completed the acquisition of Verizon Data Center to expand its data center service offering in Mexico.

By industry vertical, data security compliance and the requirement for huge data storage are the key aspects of technology deployment in the banking and financial services industry. The industry requires analyzing huge volumes of customer data gathered from different sources to provide efficient and customer-centric services. The BFSI sector is witnessing growth across the world and enterprises are constantly upgrading their existing IT infrastructure while moving on to the latest solutions. In developing economies such as Brazil and Mexico, there is a renewed focus on social integration.

By the colocation model, the market is segmented into retail and wholesale colocation models, which are offered by different colocation service providers. Retail colocation accounts for the major market, while wholesale colocation providers have started focusing on short-term deals to remain competitive. The retail colocation service providers have modified their existing strategy to meet the challenge arising from wholesale colocation solution providers. To cater to a different segment of small customers, retail colocation service providers are buying out a large chunk of space from the wholesale colocation providers and are then reselling the space too small and medium enterprises, while catering to the additional requirements of large enterprises.

Key Developments:

• January 2022: Equinix, Inc. a data center colocation company has announced the execution of a contract to form a US$525 million limited liability partnership joint venture with GIC, the sovereign wealth fund of SINGAPORE, to build and run two xScale data centres in SEOUL, KOREA. The new joint venture is expected to increase the worldwide xScale data centre portfolio to more than US$8 billion across 36 sites and an anticipated higher than 720 MW of power capacity.
• March 2022: The colocation business Telehouse has opened its sixth data center in London Docklands, stating that once it is fully operational, it will be the largest facility in the world. The company has spent £223 million renovating the structure, which was originally the location of a Thomson Reuters data center. This has a 2MW power capacity and can accommodate up to 668 racks; an expansion to 2.7MW for an extra data hall is planned for the end of 2023.

Product Offerings:

• Rackspace Cloud DNS by Rackspace: The Rackspace Cloud DNS infrastructure is a distributed Anycast network that encompasses many regions across the world. Texas, Illinois, Virginia, and London are among the states where Rackspace has DNS servers. It divides up its name servers within each data centre to prevent a single point of failure in the vicinity of DNS servers.
• Telehouse Enhanced Connect by Telehouse: The most advanced Cloud Acceleration solution is enabled by Telehouse Enhanced Connect. The Cloud Acceleration solution offers businesses an optimized, intelligent, private network that enables expedited access to software hosted in public, private, or hybrid clouds. The global and private cloud overlay network is within 1–5ms of most cloud service providers.

Americas Data Center Colocation Market Scope:

Segmentation:

• By Colocation Model
  • Retail Colocation
  • Wholesale Colocation
• By End Users
  • Small Enterprises
  • Medium Enterprises
  • Large Enterprises
• By Industry Vertical
  • Banking and Financial Services
  • Manufacturing
  • Communication and Technology
  • Healthcare
  • Energy
  • Government
  • Media and Entertainment
  • Others
• By Country
  • United States
  • Canada
  • Mexico
  • Brazil
  • Argentina
  • Others