The managed data center services market is projected to grow at a CAGR of 13.45% to reach US$ 408.684 billion by 2025, from US$ 191.673 billion in 2019. Managed data center services comprises of managed hosting, managed colocation, and managed storage services among others. Other services comprise disaster recovery, network security, compliance, network connectivity to name a few. Managed data center services are expected to witness rapid growth over the next five years due to the growing number of data centers worldwide. Complexities are involved in setting up and operation of data centers, hence, enterprises are looking towards outsourcing as a primary option which helps them to optimize business processes while keeping the control over critical IT infrastructure. North America is expected to be the major market for managed data center services constituting the maximum share, followed by Europe, while the Asia Pacific region is expected to witness maximum expansion over the forecast period on account of high growth being observed in data center market, favourable government policies, economic growth and increasing investment towards IT infrastructure.
Enterprises are looking forward to the adoption of managed data center services due to its cost-efficiency.
There is an increasing trend towards large and medium enterprises opting for managed data centers owing to its cost-efficiency, flexibility and improvement in organizational efficiency it offers. The cost of setting up an in-house data center involves high capital expenditure, along with maintenance expenditure on a periodic basis. In addition, an enterprise has to incur high wages for hiring technical staff for upgrading, maintenance, and compliance with stringent government regulations. The space in an in-house data center is also limited and it can be scaled by increasing the capital expenditure on IT infrastructure. Resultantly, enterprises are opting for managed data centers as it saves on huge capital expenditure on IT infrastructure. In addition, managed data centers offer flexibility and scalability by offering pay-per-use model and any enterprise can increase their use as per their convenience without the need for incurring any substantial expenditure. This is one of the major factors driving the demand for managed data center services worldwide. Furthermore, increasing investment towards the adoption of automation solutions and big data across industry verticals coupled with state-of-the-art services offered by vendors so as to comply with standard government regulations will further propel the demand for managed data center services over the forecast period.
On the basis of enterprise size, large-enterprises are expected to hold a major share in the global managed data center services.
Large enterprises are projected to hold a major share in this market on account of a major share of global data center space held by them. Huge volumes of data added to these data centers and huge costs associated with running and managing these data centers are steering the business owners towards managed data center services. Small and medium enterprises also hold a significant share in this market. The growth of this market among small and medium enterprises is being driven by the increasing popularity of data center colocation among them. Furthermore, the growth of this market among large enterprises is being driven by the rapidly increasing digitization of business processes and continuously increasing traffic on the internet, both of which are adding to huge volumes of data at data centers every day. Currently, large enterprises hold a lion’s share in the total data center space owned by enterprises worldwide and thus hold a major share of data generated worldwide. As cost reduction continues to be at the forefront of the enterprises’ growth strategies and the cost of running and maintaining data centers continue to surge exponentially on account of increasing data volumes. Therefore, enterprises are cutting back on their investments in the IT workforce and moving towards managed data center services, thus boosting the market growth.
Frequently Asked Questions (FAQs)