Data Center Colocation And Managed Hosting Services Market , 47% of Growth to Originate from North America, Technavio

NEW YORK, Jan. 17, 2025 /PRNewswire/ -- The global data center colocation and managed hosting services market size is estimated to grow by USD 236.9 billion from 2024 to 2028, according to Technavio. The market is estimated to grow at a CAGR of 16.82% during the forecast period.

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Region Outlook

1. North America
2. Europe
3. Asia
4. Rest of World

1. North America - North America is estimated to contribute 47%. To the growth of the global market. The Data Center Colocation And Managed Hosting Services Market report forecasts market growth by revenue at global, regional & country levels from 2017 to 2027. 

The data center colocation and managed hosting services market in the region is projected to expand substantially during the forecast period due to increasing investments in hyperscale data centers. For instance, Vantage Data Centers invested over USD700 million in March 2022 to expand its hyperscale data center operation in Canada. Additionally, in February 2022, AVAIO Capital collaborated with Adam Real Estate for the development of data center colocation in Quebec, Canada. The US hosts major vendors of managed hosting services, including Lumen Technologies, Inc. And NaviSite, Inc. The region experiences high demand for network security digital presence of industries like IT, manufacturing, healthcare, banking, financial services and insurance (BFSI), retail, and education.

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Segmentation Overview

1. End-user 
• 1.1 BFSI
• 1.2 Healthcare
• 1.3 E-commerce
• 1.4 Telecommunication
• 1.5 Others
2. Type 
• 2.1 Wholesale
• 2.2 Retail
3. Geography 
• 3.1 North America
• 3.2 Europe
• 3.3 APAC
• 3.4 Middle East and Africa
• 3.5 South America
4. Country
   US, Germany, UK, Japan, and China
5. Level
6. Enterprise Size

1.1 Fastest growing segment:

The banking and financial services sector (BFSI) is experiencing significant growth in m-commerce and e-commerce activities in North America, Europe, and developing economies like India and China in APAC. Financial data, including customer financials, account information, cardholder data, and transaction and personal information, is highly regulated by regulatory bodies such as the EU's General Data Protection Regulation (GDPR). BFSI companies, including Goldman Sachs, JPMorgan Chase and Co., and Morgan Stanley, require optimal uptime, security, connectivity, and data integrity for sharing information across networks. Traditional data center ownership poses high operating costs for global BFSI companies, leading them to outsource colocation space from vendors or lease servers from managed hosting service providers. This shift towards outsourcing is expected to drive the growth of the BFSI segment of the data center colocation and managed hosting services market during the forecast period.

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Research Analysis

The Data Center Colocation and Managed Hosting Services market is experiencing significant growth due to the increasing demand for cybersecurity, data management, and remote work solutions. With the rise of artificial intelligence, automation, IoT devices, and hybrid work models, businesses require secure and efficient data center solutions to manage their digital transformation. IT security professionals are prioritizing data security, endpoint security, and network monitoring to protect sensitive information. Differentiating customer experiences and building strong client relationships are crucial for gaining a competitive edge. Deployment models, operational efficiency, and regulatory compliance, such as HIPAA in healthcare and pharmaceuticals, are also key considerations. Enterprises are turning to colocation and managed hosting services to meet their unique needs, drive innovation, and stay ahead of the competition.

Market Overview

In the digital age, businesses increasingly rely on Data Center Colocation and Managed Hosting Services to manage their IT infrastructure. These services offer operational efficiency, overhead cost savings, and access to advanced technologies such as Cloud computing, Artificial Intelligence, and Internet of Things (IoT) devices. With the shift to remote work solutions and hybrid work models, data security and cybersecurity have become paramount. IT security professionals are tasked with safeguarding against cyber threats, data leakage, malware, and attack surfaces. The market ecosystem includes IT & telecom, manufacturing, retail & consumer goods, healthcare & life sciences, energy & utilities, media & entertainment, and various verticals. Industry expansion brings new opportunities but also pricing pressures, requiring differentiation through superior customer experiences and client relationships. Deployment models range from on-premises infrastructure to DCaaS, with IT executives leveraging these services to gain a competitive edge. In the Metaverse concept, data centers play a crucial role in supporting digital services, online customer experiences, e-commerce, and online retail. Companies like Rackspace Technology and Google Cloud are leading the charge, offering managed hosting services tailored to various industries, from healthcare and pharmaceuticals to enterprises. The retail industry, in particular, benefits from data management, enabling transaction history analysis, cashierless checkout, and personalized marketing through social media and mobile shopping apps. However, the increasing use of these services also presents challenges. Ensuring HIPAA compliance in healthcare and pharmaceuticals, addressing cybersecurity concerns, and maintaining availability and business continuity through service-level agreements are critical. As the market evolves, providers must stay ahead of the curve, offering advanced security features like cyber hardening and endpoint security, as well as network monitoring and automation to meet the demands of distributed teams.

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Key Topics Covered:

 1 Executive Summary
 2 Market Landscape
 3 Market Sizing
 4 Historic Market Size
 5 Five Forces Analysis
 6 Market Segmentation
 7 Customer Landscape
 8 Geographic Landscape
 9 Drivers, Challenges, and Trends
10 Venodr Landscape
11 Vendor Analysis
12 Appendix

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

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SOURCE Technavio