U.S. Data Center Colocation Market Size, Share, Opportunities, COVID-19 Impact, And Trends By Colocation Model (Wholesale, Retail), By Enterprise Size (Small, Medium, Large), And By Industry Vertical (Communication And Technology, BFSI, Government, Healthcare, Manufacturing, Media And Entertainment, Others) - Forecasts From 2022 To 2027

Published:  Sep 2022 Report Code: KSI061613243 Pages: 90

The U.S. data center colocation market is projected to grow at a CAGR of 13.19% to reach a value of US$30.824 billion by 2027, from US$12.722 billion in 2020.

The U.S. is a leading market for data center colocation. The data center colocation market is being driven by the rapid growth of industries and the increasing focus of enterprises towards cost reduction. advanced information technology (IT) infrastructure available in the US is also supporting the growth of the market. Datacenter colocation helps in reducing both capital and operating costs, thus aiding companies in remaining competitive. Exponential growth in data generated per day from business functions across industries is driving with it the need for more data center space to efficiently store it. Since the total cost of ownership of a data center is high and maintenance of these facilities accounts for a significantly large chunk of the total cost, colocation is continuously gaining popularity among them. Although the cloud is also an option, colocation is witnessing a continuous increase in demand from end-users who have huge volumes of classified or sensitive data with very high value attached to it. The increasing focus of companies on migrating most of their workloads to off-premise servers without giving third-party vendors access to their data is also increasing the adoption of colocation among end-users. Furthermore, stringent regulations regarding data protection in many countries like China are pushing enterprises to store data within a specified political boundary. China’s data law, for instance, requires enterprises operating in China to keep customers’ data within the boundaries of China. This has led many technology companies to store their data within the country. Since owning a data center is very expensive and other options are available, colocation being one of them, is gaining popularity, which is driving its market growth.

The wholesale colocation model holds a significantly large share

By the colocation model, the U.S. data center colocation market has been segmented into wholesale and retail. In retail colocation, enterprises lease required space with a data center, while in wholesale colocation, the company leases a large portion of the entire data center space while it may not be managing it. The wholesale model holds a significantly large share in the U.S. market on account of the presence of a large number of companies that require large amounts of data center space for storing huge volumes of data. Many companies across industries like communication, technology, and retail hold large spaces in colocation data centers on account of huge volumes of data travelling through their networks every day. The popularity of the retail colocation model is rising in the U.S. market on account of growing small and medium-sized enterprises that usually operate with a limited budget. Most small and medium-sized enterprises with an increasing number of digitized business functions are focusing on leveraging retail colocation spaces for their businesses. The presence of a good number of players in this market is making wholesale colocation affordable even for small and medium-sized enterprises. Companies are looking for types of colocation centers that offer them both colocation models, as this will help them to maintain a good blend of both of these types, thus aiding the companies in business expansion.

The communication and technology industries hold a notable market share

By industry, the U.S. data center colocation market has been segmented into communication and technology, BFSI, government, healthcare, manufacturing, media and entertainment, and others. The communication and technology industries hold a significantly large share of this market on account of the presence of a large number of companies in this country. A favorable business environment for this industry in this country is bringing many new start-ups, which are expected to contribute to the market’s growth over the projected period. The market growth in other industries is expected to remain solid over the forecast period.

Recent development and expansions

  • Equinix purchased Bare Metal Leader Packet in January 2020 in order to accelerate the Equinix strategy of assisting enterprises in more seamlessly deploying hybrid multi-cloud architecture on Platform Equinix and extracting greater value from the platform's rich ecosystems and global interconnection fabric.
  • Rackspace and Alert Logic collaborated in January 2020 to improve cybersecurity for small and mid-sized Amazon Web Services (AWS) customers. The companies goal is to provide a consulting engagement that provides a window into the state of security in their environment.
  • Rackspace acquired Onica, an Amazon Web Services (AWS) Partner Network (APN) Premier Consulting Partner and AWS Managed Service Provider, in November 2019.

COVID-19 impact

The pandemic has had a significant impact on the US data centre colocation market, with many people working from home due to lockdown and restrictions. It is expected that the market will grow faster than predicted, given the pressing need to improve IT performance, flexibility, and security.

Market Segmentation

  • By Colocation Model
    • Wholesale
    • Retail
  • By Enterprise Size
    • Small
    • Medium
    • Large
  • By Industry Vertical
    • Communication and Technology
    • BFSI
    • Government
    • Healthcare
    • Manufacturing
    • Media and Entertainment
    • Others

1. Introduction
1.1. Market Overview
1.2. Covid 19 Scenario
1.3. Market Definition
1.4. Market Segmentation

2. Research Methodology
2.1. Research Data
2.2. Assumptions

3. Executive Summary
3.1. Research Highlights

4. Market Dynamics
4.1. Market Drivers
4.2. Market Restraints
4.3. Porters Five Forces Analysis
4.4. Industry Value Chain Analysis

5. U.S. Data Center Colocation Market Analysis, By Colocation Model
5.1. Introduction
5.2. Wholesale
5.3. Retail

6. U.S. Data Center Colocation Market Analysis, By Enterprise Size
6.1. Introduction
6.2. Small
6.3. Medium
6.4. Large

7. U.S. Data Center Colocation Market Analysis, By Industry Vertical
7.1. Introduction
7.2. Communication and Technology
7.3. BFSI
7.4. Government
7.5. Healthcare
7.6. Manufacturing
7.7. Media and Entertainment
7.8. Others

8. Competitive Environment and Analysis
8.1. Major Players and Strategy Analysis
8.2. Emerging Players and Market Lucrativeness
8.3. Mergers, Acquisitions, Agreements, and Collaborations
8.4. Vendor Competitiveness Matrix

9. Company Profiles 
9.1. Equinix, Inc.
9.2. Digital Realty
9.3. Telehouse
9.4. CoreSite
9.5. CenturyLink

Equinix, Inc.

Digital Realty

Telehouse

CoreSite

CenturyLink

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