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IC_15338
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Pages: 128
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Jul 2015 | 8013 Views
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Author(s) :
Swapnil Shende
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Tables: 35
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Charts: 49
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Data Center Colocation Market is expected to garner $51.8 billion by 2020, registering a CAGR of 12.4% during the forecast period 2015-2020. Data center colocation market for energy sector would exhibit highest CAGR of 14.3% during the forecast period. Colocation hosting is a service that allows small and large enterprises to install their servers (or hire a server on rent) at a data center service provider’s location.
It helps in increasing business potential by reducing operational expenditure and maximizes the ability to focus on the core business. Growing awareness towards reduction of carbon footprints is a key factor driving the data center colocation market and has a major impact on the colocation market size. Additionally, cost effective solution for enterprises as compared to storing their server at their own premises that saves the room space requirement and cost of cooling and heating along with the need for IT expertise is fueling the growth of data center colocation market. Majority of colocation service providers in the industry are adopting expansion strategies to address the increasing demand for colocation data centers from each of the industry verticals. For instance, in May 2015 Interxion has entered into a partnership with Microsoft to provide Azure ExpressRoute solutions at its colocation data center for deployment of Microsoft cloud.
The key players included in the report are Equinix, Inc, Interxion Holding NV, SunGuard Availability Services, CenturyLink Technology Solutions, Verizon Communication Ltd, KDDI Corporation, NTT Data Corporation, American Telephone & Telegraph, Inc, Telecity Group, Global Switch Corporation, DuPont Fabros Technology, Inc, Digital Reality, Rackspace, and Navisite, Inc.
Segment Review
The global data center colocation market is segmented based on type, end-user, industry vertical and geography. By type the market is segmented into Retail colocation and Wholesale colocation. Currently, Retail colocation has relatively high market share compared to wholesale colocation. The technological advancements in colocation facilities, realization of higher in-house IT cost and situation of internal data canter saturation in organizations is driving the demand for retail colocation.
Based on end user, the market is segmented into Large Enterprises and Small and medium enterprises (SME). The large organization are having a higher market share than SME segment. The colocation market share of large organizations is more as they have opted colocation services on a large scale. Further, colocation market is segmented based on industry vertical including Telecom and IT, BFSI, Government and Public sector, Healthcare and Life sciences, Energy and Other verticals. The Other verticals includes retail and education. Telecom and IT is the highest revenue generating industry for colocation followed by BFSI and Healthcare & Life sciences. Geographically, the data center colocation market is segmented into North America, Europe, Asia Pacific and LAMEA.
Asia-pacific Colocation Market Scenario
Asia-Pacific region has emerged as a dynamic hub for E-trading, globally. The Asia Pacific holds potential prospects for trading associations looking to upgrade their network and access colocation services. In Asia-Pacific region India accounts for highest number of data centers owing to the increasing demand from Telecom, IT, BFSI, and social media sectors in the country. Following diagram shows the data center statistics of 2013.
Asia-pacific- Data Center Statistics, 2013 (Units)
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Value Chain Analysis
The value chain analysis of the global colocation industry includes various stakeholders involved in the distribution of these services to end users. Each of these players share a specific value at their point of operation, which in turn, contributes to the competitive value of the product.
Value Chain Analysis
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Value chain for the colocation market can be split into three phases. Phase I consists of data center equipment manufacturers including rack and cage manufacturers, cooling equipment manufacturers, power equipment manufacturers, networking equipment manufacturers and others. It also consists of power supply companies and high-bandwidth internet service providers. Phase II consists of colocation service providers and phase III encompasses the end users or the organizations that avail colocation services.
Phase I representatives’ act as vendors, offering products and services integral for building the physical infrastructure for colocation services. In case of wholesale colocation, racks and cages for a colocation data center are built as per the requirement for customer’s data servers.
Colocation services are type of data centers that lease hardware space and networking bandwidth to organizations that need a system administration supplier at a reasonable expense. Organizations could spend a little fortune making a private data center infrastructure, but by taking advantage of colocation services, these organizations can lease the administration of data centers they require, without needing to make the communication framework themselves.
While these data centers are offering server space and expansive networking capability, it is important to understand that colocation facilities are not just online. These facilities are the physical structures used to carry and maintain data centers and ideally located near significant power hubs where they can take advantage of the accessible connectivity.
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Key Benefits
The market is segmented by type, end user, industry vertical, and geography.
Key Market Players Profiled
The global colocation market is expected to grow swiftly due to the increasing need of cost-effective solutions for development and maintenance of data centers in near future. A priori, enterprises maintained their own data centers, incurring huge capital expenditure and massive operating expenses for their operation and maintenance. However, the advent of colocation facilities has encouraged organizations to co-locate their data servers to commercial data centers of colocation service providers.
The retail colocation market was accounted as the highest revenue-generating segment due to growing need of global distribution of data servers of small and medium sized and large enterprises. The market for wholesale colocation forecast a high growth in future with the expanded set of customer base.
North America has dominated the global colocation market across the world. The advent of large number of enterprises and prompt adoption of digitalization are the supporting factors for the colocation market in North America. However, with the rapid industrialization in countries such as China, India and Japan, the Asia-Pacific region will represent the highest growth in the colocation market.
The advent of colocation services has facilitated enterprises to rely on service providers for the physical security of their data servers; thereby, enabling them to focus on their core business activities. Adoption of colocation facilities has helped in tackling the issue of carbon footprint. Thus, these factors have cumulatively bolstered the growth of the colocation market.
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