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Data Center Colocation Market Size, Share, & Trends Analysis Report by Electrical Infrastructure (UPS Systems, Generators, Transfer Switches and Switchgears, Rack PDUs, and Other Electrical Infrastructure), Mechanical Infrastructure (Cooling Systems (CRAC & CRAH Units, Chiller Units, Cooling Towers & Dry Coolers, Economizer & Evaporative Coolers, Other Units), Racks, Other Mechanical Infrastructure, and Cooling Technique (Air-based Cooling and Liquid-based Cooling Technique)), General Construction (Building Development, Installation & Commissioning Services, Building Design, Physical Security, and DCIM), Service Type (Retail and Wholesale), and Geography (North America, APAC, Western Europe, Nordic, Central & Eastern Europe, Latin America, Middle East, Africa, and Southeast Asia), Industry Analysis Report, Regional Outlook, Growth Trends, Competitive Landscape, Share & Forecast, 2020–2025
|Market Size (Revenue)||USD 53 BILLION (2025)|
|Market Segments||Electrical Infrastructure (UPS Systems, Generators, Transfer Switches and Switchgears, Rack PDUs, and Other Electrical Infrastructure), Mechanical Infrastructure (Cooling Systems (CRAC & CRAH Units, Chiller Units, Cooling Towers & Dry Coolers, Economizer & Evaporative Coolers, Other Units), Racks, Other Mechanical Infrastructure, and Cooling Technique (Air-based Cooling and Liquid-based Cooling Technique)), General Construction (Building Development, Installation & Commissioning Services, Building Design, Physical Security, and DCIM), Service Type (Retail and Wholesale)|
|Geographic Analysis||North America, APAC, Western Europe, Nordic, Central & Eastern Europe, Latin America, Middle East, Africa, and Southeast Asia|
|Countries Covered||US, Canada, Brazil, UK, Germany, France, Netherlands, Ireland, Denmark, Finland & Iceland, Norway, Sweden, Russia & Czech Republic, Poland & Austria, GCC, South Africa, Morocco, China & Hong Kong, Australia & New Zealand, India, Japan, Singapore, Malaysia, Thailand, and Indonesia|
The global data center colocation market size to cross revenues of over USD 53 billion by 2025, growing at a CAGR of over 7% during the forecast period. The data center colocation industry is expected to witness high growth during the forecast period due to the increased demand for data center operations among enterprises in several industry verticals. North America contributes around 43% to the overall revenue, which is followed by APAC and Western Europe with a market share of 27% and 18%, respectively. The US, China, and Japan are the prominent revenue contributors to the industry. Colocation providers are expanding their existing facilities, which are likely to drive market revenue during the forecast period. The establishment of new cloud regions, which is, i.e., over 25, by AWS, Google, and Microsoft during the period 2019–2022, is expected to provide a significant boost to wholesale colocation service growth on the global scale.
The rise in demand from several businesses has increased mergers and acquisitions activities to increase their portfolio, thereby increasing the data center colocation market growth. The increase in power consumption and the need to reduce carbon footprint have driven several service providers to procure clean and renewable energy sources to power their existing and upcoming facilities across the globe. The implementation of the 5G network has already started in countries such as the US, China, South Korea, Finland, Japan, and a few countries in Europe. This is projected to increase the demand for edge colocation facilities during the forecast period.
This research report includes a detailed segmentation by
UPS systems have been the highest contributors to the market revenue through the adoption of VRLA battery-powered systems. The adoption of UPS systems has become a critical task for data center operators and designers as they account for over 30% of failures identified in the facility. The adoption of lithium-ion UPS systems has grown considerably over the past years.
The adoption of generator systems with a capacity of over 2 MW is higher because of the increased construction of large and mega facilities. Most facilities are currently deploying on-site fuel storage for at least 72 hours to power data center operations in case of power outages. Cost, reliability, efficiency, and maintenance are the major factors responsible for the adoption of UPS and generators.
In terms of revenue, the adoption of intelligent PDU solutions such as metered and monitored PDU is likely to drive the data center colocation market. Transfer switches and switchgear are critical for data centers; they are used to switch power from the power grid or generators to data center UPS systems. The incorporation of modular infrastructure is likely to provide higher OPEX savings for data centers over time as they are efficient, require less maintenance, and occupy less space. The adoption of modular infrastructure solutions is observed in prefabricated data center deployment, which will continue to grow and contribute to market revenue by the end of the forecast period.
The adoption of cooling units is highly dependent on the IT load; the growth in rack densities and the need to function cooling systems at low loads are driving the installation of the modern cooling infrastructure. Data center operators are procuring innovative cooling solutions that aim to enhance operational efficiency, reduce power consumption, and decrease carbon emissions. Data center operators have adopted innovative and energy-efficient cooling solutions to reduce power consumption by up to 50%, thereby driving the market demand.
In terms of cooling systems, the use of free cooling techniques has grown significantly over the last few years. The regions that have favorable climatic conditions that can utilize evaporative coolers for data center cooling purposes. However, facilities in the tropical areas will continue to use chilled water-based and air-cooled systems along with other cooling units.
The liquid immersion and direct-liquid cooling solutions market is experiencing strong growth owing to the increased deployment of AI and machine learning workloads. Data center racks with over 30 kW heat density require direct-to chip cooling. The market is witnessing multiple innovations, with liquid immersion and direct-to-chip cooling vendors partnering with IT infrastructure providers. They enable to design and develop innovative solutions with a target PUE of less than 1.1. The US, China, Japan, Germany, and France are the leading markets.
The North American market has a strong presence of general contractors and sub-contractors. The competition will increase over the next few years. Expertise in developing data centers within a short span of time, i.e., less than one year, will be a key criterion for the operators in the selection of general contractors. Several operators have strong partnerships with general contractors. Western Europe is the most active market in the European region for data center construction. Several facilities are being designed and built to cover an area of over 100,000 square feet.
The Central & Eastern Europe region has the strong presence of local and global contractors involved in constructing data center facilities worth millions of dollars. The market is witnessing an increase in the construction of greenfield projects with a floor area of over 50,000 square feet. This will increase the demand for sub-contractors in the region.
The retail colocation industry is likely to grow due to the adoption of single or multiple racks with a total capacity of less than 250 kW. The increasing preference for colocation services among organizations for better control and high bandwidth and interconnectivity is a significant factor, which is influencing the market growth. The growing demand from developing economies is likely to drive colocation services. Also, enterprises with the need for geographically distributed capacity and limited budgets are likely to opt for retail colocation.
The adoption of wholesale colocation services is growing across regions due to the increased demand for computing capacity from large enterprises, cloud providers, big data, and IoT organizations. Also, the increasing demand for wholesale colocation services is contributing to the development of multiple mega and hyperscale data center projects. The market is likely to witness several new entrants during the forecast period. The contribution from technology-based real estate organizations is expected to increase YOY.
In North America, the US dominates the data center colocation market with a revenue share of around 94% in 2019. North America is the home to approximately 2,000 colocation facilities. Organizations in this region are currently involved in building high- performance computing data centers to continue to innovate in the field of IoT, AI, and connected reality.
The growing construction of greenfield projects with an area of over 100,000 square feet by colocation service providers will provide substantial revenue opportunities for associated power and cooling infrastructure vendors. These investments will help local contractors to grow their expertise in the construction of new facilities. The increased power consumption and carbon emission levels have prompted data centers to install energy-efficient infrastructure and procure renewable energy solutions in the region.
The global data center colocation market has witnessed several new entrants. They are expected to provide intense competition toward the growth of revenue for the existing operators. The market will observe several mergers and acquisitions, leading to an increase in market share. In terms of colocation revenue, Equinix is the leading key player in the global industry, with a market share of around 11.5%. Digital Realty follows Equinix. The company generates through its properties as well as through joint ventures. NTT announced its global portfolio expansion with an investment of around $7 billion. NTT communication is among the leading cloud service providers and operates the most interconnected data center network across the world.
Segmentation by Electrical Infrastructure
By Mechanical Infrastructure
By General Construction
By Service Type
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