Global Data Center Colocation Market Outlook & Forecast 2023-2028: 5G Deployments Fueling Edge Data Center Demand and Surge in Rack Power Density

DUBLIN, March 18, 2024 /PRNewswire/ -- The "Global Data Center Colocation Market - Outlook & Forecast 2023-2028" report has been added to ResearchAndMarkets.com's offering.

The data center colocation market was valued at USD 30.42 billion in 2022 and is forecast to grow at a CAGR of 7.25% from 2022 to 2028, reaching USD 46.3 billion in 2028

The European data center colocation market is attracting substantial investments, with Western Europe drawing the focus of those global operators seeking to extend their presence. Furthermore, favorable policies make the Nordics an attractive hub for investments. The major contributors to green data center development in Latin America include Brazil, Chile, Argentina, and Paraguay; these countries' data center operators and governments are working toward adopting renewable energy and other measures.

In Central and Eastern Europe, data center operators are securing land for new facilities or repurposing existing buildings to meet the growing demands for infrastructure. Over USD 450 million was invested in Central & Eastern European countries in 2022.

The UAE and Saudi Arabia are the major contributors to power capacity in the Middle East & Africa region, accounting for a share of around 24% and 16%, respectively. The data center colocation market in these countries is expected to skyrocket in four to five years due to the shift from the oil economy to the digital economy. In addition, South Africa is the major contributor to power capacity in Africa, accounting for a share of over 60%; Nigeria and Kenya follow this. Cloud-based services, smart city developments, and fiber connectivity are the other factors driving continuous colocation data center investments across the region.

The Middle East & Africa market is continuously growing in terms of connectivity by deploying new submarine cables, such as Africa-1, 2Africa, India Europe Xpress (IEX), Raman, Saudi Vision, Blue, Equiano, Medusa Submarine Cable System, and SeaMeWe - 6, which will be ready for services during the forecast period.

Data centers in the Middle East & Africa region invest in cooling infrastructure due to the prevalence of high temperatures in some countries. In 2022 cooling systems accounted for over 65% of the total mechanical infrastructure.

KEY MARKET TRENDS

Growing Focus on Sustainability

• Companies in the global data center colocation market focus on using renewable energy as their main power source. Operators are planning to reduce environmental harm by using clean energy solutions. This change is part of a larger trend in the industry to adopt renewable sources, such as solar and wind power, to run data centers and other infrastructure.

5G Deployments Fueling Edge Data Center Demand

• 5G network deployments have fueled digital transformation, the growth of IoT and smart cities, and the fourth industrial revolution. All the regions are working toward adopting digital transformation to attract foreign investments.
• Rapid investments in 5G technology have increased the demand for high-bandwidth internet in Tier II and Tier III cities and contributed to substantial data volume. These factors have accelerated data center developments to process the information at par with the major countries and supported the data center colocation market growth.
• The deployment of 5G services has impacted the ICT, government, manufacturing, services, agriculture, and retail industries. 5G network services play a key role in supporting enterprise digitalization, thereby driving the adoption of IoT applications.

Adoption of Advanced IT Infrastructure in Data Centers

• Data centers are equipped with servers and network and storage solutions. Traditional IT infrastructure constantly influences the data center industry as it requires more physical space and is more expensive, resulting in a drop in demand.
• Converged infrastructure is a hardware platform where servers with internal or external storage options and network switches are offered as integrated rack-scale systems.
• ARM is a chip technology firm that creates intellectual property, which other firms license to form their processor chips. An ARM server is an enterprise-class computer server that employs many ARM processors rather than a traditional processor.
• Server virtualization divides the physical server into multiple and isolated servers using various software applications. Server virtualization is widely adopted in the data center colocation market since a single physical server can host dozens of applications as virtual machines instead of hosting each application in its designated server, reducing recurring technology expenses by 50%.

Surge in Rack Power Density

• Rack power density is one of the critical factors in data center design, capacity planning, cooling, and power provisioning.
• Over the past few years, an unprecedented rise in the rack power density of IT equipment has been observed. The adoption of compute-intensive workloads, such as AI, IoT, Augmented and Virtual Reality (AR/VR), and the popular cryptocurrency mining trend have increased the data storage and processing requirements, necessitating high-density racks.
• The surge in demand for High-Performance Computing (HPC), led by the adoption of converged and hyper-converged solutions and virtualization techniques, will contribute to the rise in rack power density to an average of 10 to 12 kW during the forecast period.
• The growth in rack power density has propelled the use of innovative and flexible facility designs along with augmenting the adoption of rack-level UPS solutions and diverse electricity feeds for racks.

Market Growth Enablers

• Growing M&A and Joint Ventures in the Market
• Growing Submarine & Inland Connectivity
• Big Data & IoT Fueling Data Center Investments
• Government Support for Data Center Developments

Market Restraints

• Rising Carbon Emissions from Data Centers
• Location Constraints on Data Center Development
• Concerns of Power Availability Challenges
• Lack of Skilled Data Center Professionals
• Security Challenges in Data Centers
• High Maintenance Costs & Inefficiencies
• Supply Chain Disruptions

SEGMENTATION INSIGHTS

Segmentation by Colocation Services

• Retail Colocation
• Wholesale Colocation

Segmentation by Infrastructure

• Electrical Infrastructure
• Mechanical Infrastructure
• General Construction

Segmentation by Electrical Infrastructure

• UPS Systems
• Generators
• Transfer Switches & Switchgear
• PDUs
• Other Electrical Infrastructure

Segmentation by Mechanical Infrastructure

• Cooling Systems
• Racks
• Other Mechanical Infrastructure

Segmentation by Cooling Systems

• CRAC & CRAH Units
• Chiller Units
• Cooling Towers, Condensers & Dry Coolers
• Economizers & Evaporative Coolers
• Other Cooling Units

Segmentation by Cooling Techniques

• Air-based Cooling
• Liquid-based Cooling

Segmentation by General Construction

• Core & Shell Development
• Installation & Commissioning Services
• Engineering & Building Design
• Fire Detection & Suppression
• Physical Security
• DCIM/BMS Solutions

VENDOR LANDSCAPE

Wholesale and retail colocation vendors are expected to thrive in the future due to the increased demand in the market. Various sectors, including BFSI, IT/telecom, and cloud, drive the demand for colocation services. The global data center colocation market has grown significantly over the last few years, with investments from global, regional, and data center operators.

The development of hyperscale data center campuses in all regions will bring in a significant revenue opportunity for vendors that offer the fastest-growing technologies, such as liquid immersion cooling, direct-to-chip cooling, lithium-ion UPS, HVO generators, microgrid technologies, renewable power solutions, and net-zero water data centers.

Prominent Data Center Investors

• China Mobile International
• China Telecom
• China Unicom
• Chindata Group
• CoreSite
• CyrusOne
• Digital Realty
• EdgeConneX
• Equinix
• GDS Services
• NTT Data
• STACK Infrastructure
• ST Telemedia Global Data Centres
• Vantage Data Centers
• VNET

Other Prominent Vendors

• 365 Data Centers
• AdaniConneX
• Africa Data Centres
• AirTrunk
• Aligned Data Centers
• American Tower
• Atman
• atNorth 
• AT TOKYO
• Aruba
• Big Data Exchange 
• CDC Data Centres
• Center3
• Chayora
• CloudHQ
• Cologix
• Colt Data Centre Services 
• Compass Datacenters
• COPT Data Center Solutions
• CtrlS Datacenters
• Cyxtera Technologies 
• DATA4
• DataBank
• DC BLOX
• DCI Indonesia
• Edge Centres
• ePLDT
• Flexential
• Global Switch
• Green Mountain
• Gulf Data Hub
• H5 Data Centers
• HostDime
• Iron Mountain
• Internet Thailand
• KDDI
• Keppel Data Centres
• Khazna Data Centers
• LG Uplus
• MettaDC
• NEXTDC
• Open Access Data Centres
• Orange Business Services
• Princeton Digital Group
• QTS Realty Trust
• Rostelecom Data Centers
• Sabey Data Centers
• Skybox Datacenters
• Stream Data Centers
• Scala Data Centers
• Sify Technologies
• SUNeVison Holdings (iAdvantage)
• Switch
• T5 Data Centers
• Tenglong Holding Group
• TierPoint
• Turkcell
• Urbacon Data Centre Solutions
• Viettel IDC
• Wingu
• Yondr
• Yotta Infrastructure

New Entrants

• AQ Compute
• Corscale Data Centers
• Gaw Capital Partners
• EDGNEX Data Centres by DAMAC
• ESR
• Gatineau Data Hub (GDH)
• iMCritical
• IXAfrica
• Kasi Cloud
• PowerHouse Data Centers
• Quantum Loophole
• QScale
• YCO Cloud
• YTL Data Center

For more information about this report visit https://www.researchandmarkets.com/r/nrzyy8

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