The global colocation market is expected to register growth over the forecast period. Rising concern regarding operating data center expenses is expected to drive the market over the next seven years. Due to the global expansion of businesses, the need for utilities and space has increased to unexceptional levels. Colocations are high-quality managed data center services that help businesses reinforce operations 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 are expected to have a positive impact on the colocation market over the forecast period.
These data centers allow the physical housing of their servers and devices in professional data centers. In addition, it provides advanced 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 colocation 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 a high level of risk management and an opportunity to use high-quality equipment. It also helps enterprises to stop investments in 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 the facility and is usually caged. However, in wholesale, the renter leases complete built space and is responsible for managing all IT operations.
These services include rental server cages and cabinets connected with the 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 the end-user, the colocation 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 the IT and telecommunication sectors. However, SMEs are expected to witness 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 colocation industry over the forecast period.
North America dominates the market owing to the rising focus on energy management and power consumption practices. In developing countries such as India and China, rising demand from the SME is expected to augment the colocation market over the forecast period. In the Asia Pacific, the 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 it acquired Telecity in order to expand its business.
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Artificial Intelligence (AI), Virtual Reality (VR), and Augmented Reality (AR) solutions are anticipated to substantially contribute while responding to the COVID-19 pandemic and address continuously evolving challenges. The existing situation owing to the outbreak of the epidemic will inspire pharmaceutical vendors and healthcare establishments to improve their R&D investments in AI, acting as a core technology for enabling various initiatives. The insurance industry is expected to confront the pressure associated with cost-efficiency. Usage of AI can help in reducing operating costs, and at the same time, can increase customer satisfaction during the renewal process, claims, and other services. VR/AR can assist in e-learning, for which the demand will surge owing to the closure of many schools and universities. Further, VR/AR can also prove to be a valuable solution in providing remote assistance as it can support in avoiding unnecessary travel. The report will account for Covid19 as a key market contributor.