Global colocation market was estimated over USD 25.00 billion in 2014 and is projected to grow at a CAGR of above 12.0% from 2015 to 2022. Rising concern regarding operating data center expenses is expected to drive the market over the next seven years. Due to global expansion of the businesses, need for utilities and space has increased to unexceptional levels. Colocations are high quality managed data center services that help businesses reinforce operation in their specific sector. This helps consumers to focus on revenue generation by reforming workflows and reducing IT expenses.
Colocation demand is expected to increase over the next seven years on account of numerous vendors providing controlled scalability features to enterprises. Colocation providers associated with hardware vendors and cloud providers have been offering unique services to their clients. These data centers are highly flexible and provide solutions ranging from simple data warehousing to data analytics. These superior features allowing easy colocation use by reducing expenses is expected to have positive impact on the market over forecast period.
These data centers allow physical housing of their servers and devices in professional data centers. In addition, it provides advance infrastructure, high frequency bandwidth, special services & systems and continuous security. Various businesses rent land for locating servers and computing hardware in offices. These factors are expected to propel service demand and thus have a positive impact on the industry over the next seven year.
These centers provide connectivity at a reasonable rate and aid businesses to globally connect faster, and with enhanced security. It also provides enterprises with high level of risk management and an opportunity to use high quality equipment. It also helps enterprises to stop investments on storage bills.
These data facility services are fragmented into wholesale and retail data center types. In retail services, a business leases a committed land within facility and is usually caged. However, in wholesale, renter leases complete built space and is responsible for managing all IT operations.
These services include rental server cages and cabinets connected with ISP network and physical infrastructure. The cabinets and cages are locked and inaccessible to other clients. The client administers the hardware without ISP involvement and controls the servers.These services provide environmental control such as humidity maintenance, and constant temperature. In addition it also provides fire suppression systems, UPS backup, large capacity bandwidth, and video monitoring facilities.
Depending on end-user, the market is segmented into small & medium size enterprises and larger enterprises. Larger enterprises include sectors such as healthcare & life science, information technology and telecommunication. Larger enterprises are major contributors to the global market and dominate the service industry owing to increasing demand from IT and telecommunication sectors. However, SME’s are expected to witness a significant growth as their demand would depend on growth in retail services. Increasing application scope in banking & financial sectors, government & public sectors and energy sectors is expected to augment the industry over the forecast period.
North America dominates the market owing to rising focus in energy management and power consumption practices. In developing countries such as India and China, rising demand from the SME is expected to augment market over the forecast period. In Asia Pacific, growth of larger enterprises coupled with increasing demand from small & medium scale sectors is expected to propel industry growth over the next seven years.
Key players in the market include SunGuard Availability Services, Interxion Holding, Equinix, CenturyLINK Technology Solutions, Verizon Communication Limited, KDDI Telehouse, NTT Corporation, Global Switch, DuPont Fabros Technology, Rackscape and Digital Realty. In September, 2015 Equinix acquired Bit-isle, a service provider in Japan and in May, 2015 itacquired Telecity in order to expand its business.
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