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The retail colocation market size is estimated to grow at a CAGR of 14.32% between 2022 and 2027. The market size is forecast to increase by USD 28.70 billion. The growth of the market depends on several factors, including the rising demand for retail colocation facilities, the modernization of data centers in emerging markets, and an increase in business operational needs. Retail colocation is a type of data center colocation where many enterprises rent space and integrate their own IT equipment, such as servers and storage devices, within the racks provided by the colocation players. Retail colocation includes the process of renting racks, rack cages, and private suites in a large data center.
This retail colocation market report extensively covers market segmentation by end-user (SMEs and large enterprises), industry application (IT and telecom, healthcare, retail and e-commerce, energy and utility, and others), and geography (North America, APAC, Europe, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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Rising demand for retail colocation facilities is the key factor driving the growth of the market. Retail colocation is a facility that rents servers, storage equipment, and computer networks. Colocation facilities are built with private racks that businesses can rent to operate their IT infrastructure. These help SMEs carry out their operations using modern infrastructure at reduced subscription costs. The number of these establishments increases rapidly each year.
Moreover, many companies create and operate their own cloud platforms. They also host these platforms using a managed services model. These businesses can simplify their IT infrastructure operations to execute better uptime and greater resource availability. With the growing online presence of businesses across various industry sectors, the adoption of managed hosting services will drive the growth of the global retail colocation market during the forecast period.
The growing adoption of software-defined data centers is the primary trend in the market. Software-defined data centers enhance efficiency, reduce costs, deliver applications quickly, provide higher availability and better security, and distribute workloads across the cloud. cloud. Software-defined data centers consist of three components, which are software-defined networking (SDN), software-defined computing (SDC), and software-defined storage (SDS).
Furthermore, many colocation players such as Digital Realty Trust, CyrusOne, and Equinix offer connectivity to cloud platforms including Amazon Web Services, Microsoft Azure, and Google Cloud using SDN, SDC, and SDS. Additionally, increased network traffic will result in mandatory installation of SDN, SDC, and SDS for colocation installation. This will drive the growth of the global retail colocation market during the forecast period.
The adoption of mini data centers is a challenge that affects the growth of the market. The major challenge for large-scale data center colocation is the higher CAPEX compared to mini data centers. A mini data center includes one to approximately 40 rack containment systems integrated with power, cooling, and IT infrastructure, helping to reduce costs. Colocation customers are also turning to mini data centers to overcome challenges related to carbon emissions and energy consumption.
In addition, the major advantage of mini data centers is that all components are integrated into a single rack and battery, saving at least 40% of installation space compared to traditional data center buildings. The growing adoption of mini data centers will impede the growth of the global retail colocation market during the forecast period.
The market share growth by the SMEs segment will be significant during the forecast period. Small and medium-sized data centers rely heavily on device reliability, while large data centers require multiple redundant configurations. In addition to having higher reliability standards, small and medium-sized data center infrastructure must be able to meet this demand and be continuously upgraded as it grows.
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The SMEs segment showed a gradual increase in the market share of USD 8.26 billion in 2017. Small and medium-sized data centers take care of the core operations of organizations, corporations, and subsidiaries of great importance while avoiding business disruption. It is usually built to GB Class B standards to ensure the data center can operate normally. Therefore, the increasing number of small and medium data centers is expected to drive the growth of the SMEs segment in the global retail colocation market during the forecast period.
This segment includes IT and telecom companies. Companies in this segment face challenges in managing the increased network capacity of existing data centers. As a result, companies in the telecom and IT industries are looking towards colocation and managed services to keep up with the growing demand for network capacity. Furthermore, the advent of the Smart Revolution, including the development of smart cities, smart grids, and smart homes, is leading to the generation of large amounts of data. Processing this data has become a top priority and has led to the development of data centers. This can have a positive impact on the growth of the segment, thereby driving the growth of the market during the forecast period.
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North America is estimated to contribute 32% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. Due to the growing investments by hyperscale cloud providers, colocation service providers, and businesses, which are boosting their IT infrastructure to keep edge computing, 5G, multi-cloud services, big data analytics, and IoT, the retail colocation market is expected to grow significantly. Furthermore, the rising adoption of cloud computing, significant growth in data traffic, and growing investments in the expansion of new data centers are anticipated to drive the growth of the retail colocation market in the region during the forecast period.
In 2020, the outbreak of COVID-19 boosted the growth in the number of cloud data centers in North America. There was an increase in the adoption of cloud services and digitization due to the COVID-19 outbreak, leading to the emergence of a new business environment. Additionally, countries in North America have imposed strict restrictions on various industrial activities to contain the spread of the epidemic, which has increased the demand for digital and online transactions. This has driven demand for automation services and solutions. Therefore, during the forecast period, the regional market is expected to face high competition from cloud data centers, which may limit the growth of the regional market.
The Retail Colocation Market report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Retail Colocation Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The retail colocation market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Retail Colocation Market Scope |
|
Report Coverage |
Details |
Page number |
162 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 14.32% |
Market growth 2023-2027 |
USD 28.70 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
13.64 |
Regional analysis |
North America, APAC, Europe, Middle East and Africa, and South America |
Performing market contribution |
North America at 32% |
Key countries |
US, Canada, China, UK, and Germany |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
AT and T Inc., China Telecom Corp. Ltd., China Unicom Hong Kong Ltd., Cogent Communications Holdings Inc., CoreSite Realty Corp., CyrusOne LLC, Cyxtera Technologies Inc., Digital Realty Trust Inc., Equinix Inc., Global Switch Ltd., Internap Holding LLC, KDDI Corp., Nippon Telegraph and Telephone Corp., phoenix NAP LLC, Rahi, TeraGo Inc., Verizon Communications Inc., VNET Group Inc., and Yotta Data Services Pvt. Ltd. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Industry Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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