According to a new report published by Allied Market Research titled, "World Colocation - Market Opportunities and Forecasts, 2014 - 2020", the global colocation market is expected to reach $51.8 billion by 2020, registering a CAGR of 12.4% during 2015 - 2020. Global colocation market for energy sector would exhibit highest CAGR of 14.3% during the forecast period.
North America has emerged as the most promising region, exhibiting a huge demand for colocation by adoption in the sectors of banking, telecom and IT sector in order to manage their dedicated data servers. In 2014, the market for colocation in North America was valued at $11,779.9 million and would continue to consolidate its market position during the period 2015-2020. Key factors such as shrinking IT budgets and the high cost associated with the development of dedicated data centers would largely drive the market by 2020.
Based on space and power requirements for maintaining the data servers, the market for Colocation services are broadly segmented into two types-retail colocation and wholesale colocation. High demand of capacity requirement ranging from 100KW to 500KW power are driving the market for retail colocation.
Presently, the segment of retail colocation acquires a larger share in the Colocation market. In 2014, the retail colocation market accounted for approximately 2/3rd of the total market share. In order to secure the market position, wholesale colocation providers are now focusing on small-and medium enterprises in need of 500KW-1000KW. The wholesale colocation market is expected to register a CAGR of 13.7% during the period 2015 -2020.
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Based on increasing density of data servers, the colocation market earns a major share of its revenue from the telecom and IT industry. The segment of Telecom and IT sector would continue to consolidate its position in the colocation market, over the forecast period. Recent digitalization approaches adopted by the energy sector would drive the colocation market registering the highest CAGR of 14.2% during the forecast period 2015-2020.
Global colocation market would exhibit significant growth largely supplemented by the growing necessity of physical security and maintenance of data servers in organizations
Realizing the value proposition of colocation facilities with resilient power supply, dedicated cooling systems and remote monitoring services are becoming the key target area among small and medium enterprises
Wholesale colocation providers have broadened their facility range pertaining to power requirements, in order to competitively secure their market position
The growth of retail colocation market is mainly supplemented by demands from small and medium enterprises whilst other large enterprises primarily adopt wholesale colocation services to suit their requirements for large data servers. The colocation market for large enterprises exhibit a high market share due to the higher unit price however; the colocation market for small and medium enterprises indicates a higher growth rate due to the increased demand for customized colocation services.