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DUBLIN, Feb. 6, 2023 /PRNewswire/ -- The 'data center colocation market - global outlook & forecast 2022-2027' report has been added to
The global data center colocation market is expected to grow at a CAGR of 6.5% from 2021 to 2027.
The data center colocation market growth was aided by previously announced projects and expansions of facilities in a few locations. Cloud-based service providers contribute to the most demand for data center services. Growth continues to spur across infrastructure categories, leading to a sustainable facilities environment.
The APAC region dominates the data center colocation market in terms of investment, followed by North America and Western Europe. Other regions, such as the Middle East, Africa, and Latin America, are among the emerging colocation markets expected to grow during the forecast period.
The US, China, Canada, Japan, the UK, France, Germany, and the Netherlands lead the market in terms of the generation of colocation revenue. Other countries in Latin America, the Middle East & Africa will grow due to more investments by global and local operators.
The major data center colocation market operators are Equinix, Digital Realty, CyrusOne, STACK Infrastructure, QTS Realty Trust, ST Telemedia Global Data Centres, and others that are adopting renewable energy and taking significant steps toward sustainability.
The companies are engaged in a signed Power Purchase Agreement (PPA) with several energy companies to procure renewable energy, such as wind and solar energy, to power their facilities. The procurement of renewable energy is expected to continue during the forecast period.
The global data center colocation market in terms of investments in 2021 was led by Digital Realty, holding the largest industry share. Digital Realty invested in over 79 projects across several locations worldwide, including investments along with its subsidiaries, such as Interxion, icolo.io, MC Digital Realty, Ascenty, and others. Vendors focus on continuous development to sustain the colocation industry.
MARKET TRENDS & DRIVERS
Increasing Penetration Towards The Demand For Cloud, Big Data, And IoT
Over the past few years, the rising internet penetration, government data protection laws, and higher demand for services are pushing cloud providers to operate centers worldwide. The data center colocation market also witnessed growth in cloud adoption after the wake of COVID-19. Due to the COVID-19 outbreak, about 90% of employees across sectors went into remote working. The demand for colocation, managed, and cloud connectivity services will gain momentum as enterprises seek to adopt cloud services such as PaaS and IaaS. The increasing adoption of big data and IoT technologies across the sectors such as BFSI, healthcare, government, entertainment & media, education, and others will boost the demand for facilities.
Innovations In Creating Sustainable Power Technologies
Lithium-ion batteries, Nickle-Zinc, and Prussian Blue sodium-ion batteries are the major new innovative batteries. A significant increase in the adoption of lithium-ion batteries will be witnessed during the forecast period. The evolution of microgrids as a power backup for grids will benefit regions with a higher power cost and uncertain power supply. Due to high carbon emissions, natural gas generators will likely replace diesel generators. The emergence of fuel cells as prime or backup power, such as natural gas-powered and hydrogen fuel cells, will be adopted during the forecast period. The emergence of HVO (Hydrotreated Vegetable Oil), which is 100% biodegradable, sustainable and non-toxic, offers the same convenience as conventional fossil fuels. Kao Data was the first operator to replace diesel generators with HVO fuel generators.
5G Deployment To Boost Edge Data Center Development
Most countries and regions worldwide are witnessing the commercial deployment of 5G services, leading to more local data generation and the development of edge center facilities. Several edge facilities companies such as Edge Centres, AtlasEdge Data Centres, American Tower, HostDime, EdgeConneX, VueNow, and Open Access Data Centres (OADC) are actively present in the industry. They are expanding their presence across several countries and regions. The development of edge centers will increase the demand for sensors, routers, cables, and PDUs. As more and more data are generated, the rack density will also increase, leading to the requirement for power systems to support the IT infrastructure.
Increase In Data Center Activities Such As M&A and JVs
The data center colocation market is witnessing an increase in services such as Mergers & Acquisitions, and Joint ventures, which are helping companies gain control over the market, thus reducing the competition and gaining a footprint in the markets. The companies are either acquiring the data center firm or facilities or acquiring the company's stakes to gain traction in the data center colocation market. For instance, NorthC acquired Netrics to enter the Switzerland data center market in April 2022. In March 2022, one of the largest M&A deals between KKR, Global Infrastructure Partners (GIP), and CyrusOne was closed. The former two companies acquired the data center firm for around USD 15 billion.
Government Backing Investment Through Incentives:
Several governments across the countries and regions provide tax incentives and support to investors looking to invest in the data center colocation market; such measures attract more operators to invest in the industry. In the North American region, especially in the US, several state governments offer various kinds of incentives to data center operators. For instance, Virginia provides tax incentives for the facility's equipment that meets the capital investment and employment requirements. Over the past decade, Amazon Web Services received over USD 4.7 billion in subsidies from the federal and state governments to build offices, data centers, call centers, and other facilities. Tamil Nadu, the Indian State government, launched its data center policy. It will offer land, power, and connectivity incentives to support the new facilities investment across the state.
Market Opportunities & Trends
Sustainability Initiatives by Colocation Operators
5G Deployments Fueling Edge Data Center Investments Surge in Rack Power Density Sustainable Innovations in Data Center Power Technology Ecodiesel Generators Natural Gas Generators Fuel Cells Hydrotreated Vegetable Oil (Hvo) Fuel Nuclear Energy Generation
Adoption of Advanced It Infrastructure Converged & Hyperconverged Infrastructure Arm-Based Servers Server Virtualization Innovative Data Center Power Technologies Adoption of Advanced Ups Batteries Software-Defined Data Centers & Ai in Power Monitoring Microgrids Automation & Intelligent Monitoring Solutions
Market Growth Enablers
Growing Submarine & Inland Connectivity Increasing M&As and Jvs Across the Industry Impact of Covid-19 Big Data & IoT Fueling Data Center Investments Government Support for Data Center Investments Increasing Demand for Cloud-Based Services
Rising Carbon Emissions from Data Centers Location Constraints on Data Center Development Lack of Skilled Data Center Professionals Security Challenges in Data Centers High Maintenance Costs & Inefficiencies Supply Chain Disruptions
Prominent Colocation Investors
21Vianet Group China Telecom Colt Data Centre Services (Colt DCS) Compass Datacenters CoreSite CyrusOne Digital Realty EdgeConneX Equinix GDS Services Global Switch Iron Mountain NTT Global Data Centers QTS Realty Trust STACK Infrastructure ST Telemedia Global Data Centres (STT GDC) Vantage Data Centers
Other Prominent Vendors
3data 365 Data Centers Africa Data Centres AirTrunk Aligned American Tower AQ Compute Aruba Atman atNorth AT TOKYO BDx (Big Data Exchange) Bulk Infrastructure Bridge Data Centres CDC Data Centres Chayora China Mobile Chindata CloudHQ Cologix COPT Data Center Solutions CtrlS Datacenters Cyxtera Technologies DATA4 DataBank DC BLOX Element Critical ePLDT eStruxture Data Centers fifteenfortyseven Critical Systems Realty (1547) Flexential Green Mountain H5 Data Centers HostDime KDDI Keppel Data Centres LG Uplus maincubes one MainOne (Equinix) Millicom NEXTDC ODATA Orange Business Services Prime Data Centers Princeton Digital Group (PDG) Proximity Data Centres Raxio Group Rostelecom Data Centers Sabey Data Centers Scala Data Centers Sify Technologies Skybox Datacenters Stream Data Centers SUNeVision Switch T5 Data Centers Tenglong Holdings Group Teraco (Digital Realty) TierPoint Turkcell Urbacon Data Centre Solutions Wingu Yondr Yotta Infrastructure (Hiranandani Group)
Adani Group AtlasEdge AUBix Cirrus Data Services ClusterPower DaSTOR Data Center First EDGNEX EdgeX Data Centers Enovum Data Centers ESR Cayman Global Technical Realty Hickory Infinity Mantra Data Centers Novva Data Centers Open Access Data Centres (OADC) PointOne Quantum Loophole Quantum Switch Stratus DC Management YCO Cloud YTL Data Center ZeroPoint DC (NEOM)
Segmentation by Colocation Service
Retail Colocation Wholesale Colocation
Segmentation by Infrastructure
Electrical Infrastructure Mechanical Infrastructure General Construction
Segmentation by Electrical Infrastructure
UPS Systems Generators Transfer Switches & Switchgear Power Distribution Units Other Electrical Infrastructure
Segmentation by Mechanical Infrastructure
Cooling Systems Racks Other Mechanical Infrastructure
Segmentation by Cooling Systems
CRAC & CRAH Units Chiller Units Cooling Towers, Condensers & Dry Coolers Economizers & Evaporative Coolers Other Cooling Units
Segmentation by Cooling Technique
Air-based Cooling Technique Liquid-Based Cooling Technique
Segmentation by General Construction
Core & Shell Development Installation & Commissioning Services Engineering & Building Design Fire Detection & Suppression Physical Security DCIM/BMS
Segmentation by Tier Standard
Tier I & Tier II Tier III Tier IV
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