Changing Trends in the Data Center Colocation Market

Changing Trends in the Data Center Colocation Market

By Knowledge Sourcing Intelligence Blog

The Data Center Colocation market is worth $43,838.252 million for the year 2019 and is expected to grow at 13.84% CAGR to reach a market volume of US$108,612.767 million by 2026.

Datacenter colocation is the method of co-housing privately owned servers and networking equipment in a third-party data center. Instead of housing servers within the premises of the organization, colocation allows organizations to co-locate by renting spaces in a colocation data center. The central difference between colocation data centers and cloud computing is the way data is stored and managed. The primary outlining difference is of having physical assets versus virtual ones. Moreover, services provided by colocation data centers include physical space, storage, power, cooling, and physical security for servers. Further, networking equipment of other third-party orgasmatron assists in connecting to a variety of telecommunications and network service providers efficiently and at a cost-effective rate. Colocation providers offer services to a wide range of customers from small-scale enterprises to large multinational companies. A colocation data center can be classified into two categories, retail and wholesale. However, a new third type of colocation facility has garnered significance, a hybrid cloud-based colocation center.

data center colocation market

Data Center colocation proves to be useful for any enterprise, of any size and any type. The main driver in the data center colocation market is the uptime facility provided by the data colocation centers. It guarantees an enterprise percentage if uptie without charging any significant maintenance charges. Furthermore, it assists in mitigating risk in the event of a disaster by offering complex layers of redundancy offered at data center colocation. Besides, data colocations centers have superior security measures such as cameras, biometric readers, and check-in desks to ensure absolute security at the centers. Additionally, one of the most significant advantages of using a colocation data center is that they offer cost-effective data center solutions in comparison to managing an in-house data center. Additionally, the colocation data center provides significant benefits such as bandwidth solutions, support and certification, and scalability which aids in augmenting demand for such types of data center solutions. Overall these benefits aid in propelling growth in the data center colocation market. However, fluctuating monthly and trouble finding a colocation data center in the vicinity can hamper the growth in the market. Moreover, data colocation centers are not suitable for businesses with a large quantum of expanding data.

Prominent players in the Machine Condition Monitoring market are Equinix Inc., Telehouse, Rackspace US Inc., Colt Technology, Services Group Ltd., CenturyLink, Internap Corporation, Anexio Inc., and Zayo Group LLC among others.

The Growing Need for Data Center Colocation Solutions for SME's Will Drive the Market Growth

The key developer in the market is the increasing demand for data colocation solutions for Small-medium enterprises. Moreover, the rising adoption of technology in small-medium enterprises is driving demand for the data colocation market. The rising numbers of operations of SMEs are further bolstering growth in the market and are making a significant economic impact. SMEs are restoring to collocated data centers for saving cost, as it allows them to outsource the data center operations without incurring any significant cost of setting up a data center. Furthermore, Data colocation centers provide SMEs with several benefits including lower power requirements, availability of data floor space, cooling, and others, thereby reducing the cost of operations for SMEs. Additionally, data colocation centers provide physical protection along with absolute command over their equipment. Hence, SMEs with financial constraints can opt for these cost-effective collocated alternatives.

Trends in Data Center Security Market by Region:

Key market players around the world have adopted various business strategies to sustain, grow and develop in the data center colocation market. Various business strategies such as partnerships, acquisitions, mergers, and other related commercial agreements have been employed by organizations with the aim to develop and provide services to a large section of consumers worldwide. Through such collaborative agreements, the North American region has resulted in the notable development of the market on the whole.

The North American region endures a significant market share and is anticipated to grow at a decent CAGR over the forecasted period. The growth in the North American region is majorly driven by the large presence of data centers and owing to the rapid adoption of advanced data center comprehensive solutions. For instance, Telehouse America recently announced best in class physical security layer upgrade for its New york-based data centers. Similarly, Evoque, a mid-size data center provider announced plans to enter into Hybrid cloud-based colocation centers.

However, the APAC region is estimated to grow at the fastest rate and dominate the market over the forecasted period. The major driving factor is the increasing adoption of technology and mushrooming of small and medium-sized enterprises. Besides, increasing data traffic in countries like China, India, Japan is estimated to further propel growth in the market. For instance, NTT announced data center expansion and aims to spread its operations across 160 countries. Similarly, Equinix extended its digital edge with the launch of its Equinix Fabric at the CA1 Canberra data center.

COVID Insights

The outbreak of the novel coronavirus disease positively impacted the data center colocation market. Owing to financial slowdown globally, the companies intend to outsource operations to minimize their financial constraints. The imposed lockdown severely impacted businesses around the world, thereby negatively impacting their financial outlook. Hence, instead of installing in-house data centers, which require huge costs, businesses are looking at third-party vendors for data center solutions. Thus, increasing demand for colocation data centers and further propelling growth in the data center colocation market. For instance, DuPont announced the acquisition of immediate, a provider of colocation and management services.