The data center colocation market by investment is expected to grow at a CAGR of 4.40% during the period 2020-2026, according to ResearchAndMarkets.com
The colocation market is attractive, with data centers offering a higher return on investment (ROI) than other commercial and industrial properties. In 2021, the increase in digitalization is due to the pandemic, several initiatives taken by different countries, and the deployment of technology such as IoT, big data, 5G, and edge. The rising investment by cloud service providers across various geographies is accelerating the colocation industry globally.
GEOGRAPHY ANALYSIS
North America is among the top locations in terms of colocation facility market growth. In Canada, cloud providers are seeing volatile growth over the past 2-3 years, resulting in significant growth for wholesale data center providers. In the US, Virginia, Texas, and California are the major markets for colocation operations, followed by Illinois, Georgia, Nevada, and Oregon. Canada is an upcoming market owing to its accessibility to renewable energy sources and low power costs.
KEY HIGHLIGHTS
COVID-19 has been a catalyst to digitalization initiatives and a solid boost to colocation market growth. An increase in digitalization across businesses will continue to grow the data center investment from colocation services.
The rack power density is expected to grow from an average of 4-6 kW in 2020 to about 10-12 kW in 2026 due to the increased high-performance infrastructure deployment.
MARKET SHARES & SEGMENTS
Colocation services in data centers are offered through retail and wholesale colocation. In terms of market share, the retail segment continues to dominate the market with around 70% of the market share.
Retail colocation services are likely to grow as several enterprises in developing countries are shifting from traditional server room infrastructure to data centers.
