The global data center colocation market is set to clock $51 billion by the end of 2020. This would be a Compounded Annual Growth Rate or CAGR of 12% computed over the period between 2015 and 2020. Of all the sectors, the energy sector will record the highest CAGR at 14% during this period. Colocation hosting is a boon for enterprises small and large as they can park their servers at convenient locations at moderate costs.
The benefits that accrue from opting for data center colocation include reduced operational expenses and a chance to focus on the core competency of each business. Data center colocation service providers also help reduce the carbon footprint. The major benefit though is the cost-effective solution that enterprises get as they would otherwise have to set up the data centers in-house. The cost incurred for cooling and heating as well as the expertise of IT personnel who need to be deployed is a burden on enterprises. The best solution for them is to turn to data center colocation service providers.
Segments in the Market
The various segments that the data center colocation market comprises depends largely on the type as also the industry vertical and geographical location. The types include retail as well as wholesale colocation, with the retail colocation having the lion’s share of the market. The demand for retail colocation is on the rise considering the latest technology adopted in these centers. The higher in-house data center costs are also pushing enterprises to look for data center colocation service providers.
The segments of the market are also divided into large as well as small and medium enterprises (SME). Here again, the lion’s share goes to the large enterprises with the SME segment settling for a smaller share. The colocation requirements of large organizations is on a very large scale. The industry verticals can be classified as IT, Telecom, Cellular services, BFSI and private and public sectors. Healthcare and energy form the other verticals. Of these, Telecom and IT are the major revenue-generating segments that data center colocation providers benefit from.
The Scenario in the Asia-Pacific Region
Today, the Asia-Pacific region is evolving as one of the major hubs for e-commerce activity and the e-trading takes place at global levels. Colocation service providers are already eyeing the Asia-Pacific market with India accounting for a high concentration of data centers based on the rising demand for Telecom and IT expansion.
The Asia-Pacific Data Center figures for 2013
The Tier Standards at Play
The data center colocation market is still dominated by Tier 3 facilities added to which adopting a flexible design pattern offers better redundancy as far as the global data center market is concerned.
Comprising Tier 1 and 2 , as well as Tier 3 and 4, the global data center saw a spurt in market share for Tier 3 the last couple of years (2017 and 2018), which grew at a CAGR of 5 percent during that period. Even the new centers coming up at new locations conform to Tier 3 standards featuring N +1 redundancy. As the competition heats up, operators are willing to reconfigure up to 2N +1 to keep up with their peers. Tier 4 facilities are expected to dominate the global markets in the future.
DataCenterandColocation is a free professional and non-bias service provided to clients for selecting the right data center, colocation, managed hosting or cloud facility for their requirements. DataCenterandColocation is one of the largest colocation site consulting firms in the United States. They represent approximately 3000 data centers and colocation centers in the United States and Canada. At no cost to clients, they identify specific space, location, power and security requirements, solicit proposals, professionally analyze the responses, compare the strengths and weaknesses of each facility, negotiate to price and deliver highly competitive bids for colocation. They also perform a comparative analysis of in-house vs. design-build services, wholesale data center space, and data connectivity.