When COVID-19 struck the world, it resulted in economic fallout. This forced corporations to make improvements to not only protect their employees and clients but also to stay afloat in this competitive environment.

Because of this, many organizations began to put a great focus on colocation. 

With so many businesses having their workers working from home, remotely, and the increase of our virtual lives, the colocation route simply makes more sense than ever before.

So, what will the growth of the colocation data center market look like in 2022?

Colocation Data Center Market

The appeal of data center colocation continues to grow, particularly around these benefits:

Providing data center space and infrastructure including…

  • Power 
  • Network bandwidth, 
  • Physical security
  • Cooling components 

…to name a few.

There are two major types of colocation data centers based on the customer’s needs. They are retail colocation and wholesale colocation.

Retail Colocation

Retail colocation is mainly used by Small and Medium-Sized Enterprises (SMEs).

It provides power, space, cooling, cabling, and support services. Retail colocation also provides flexibility in terms of IT infrastructure.

Wholesale Colocation

Wholesale colocation involves the leasing of entire rooms and facilities to place IT equipment. This is used by large companies.

On-Prem Data Centers VS Colocation Data Center

There are benefits of on-prem data centers, but for a company that’s continually expanding, using a colocation data center is more practical.

With an on-prem data center, your company requires skilled IT employees to run the operations. It also involves various expenditures for server management and infrastructure maintenance.

An on-prem data center requires a large amount of initial investment to set up a new data center facility. This increases the overall CAPEX of the enterprises. 

When a company switches to a colocation data center, they’ll receive services like interconnection services, internet solutions, and skilled managed IT services based on their size and requirement.

A colocation data center also provides power, space, bandwidth, and since their facilities are located away from the users’ premises, they are less prone to disasters.

Expected Growth In 2022

In 2017, the colocation data center market size was USD 31.52 billion. It’s expected to grow to USD 62.30 billion by 2022, at a Compound Annual Growth Rate (CAGR) of 14.60%.

The reason for the expected growth is that the services provided by a colocation data center requires scalability and cost-effectiveness for managing the daily data requirement.

Retail colocation in the data center colocation market is expected to have the largest market share during the forecast period. 

Large enterprises are quickly adopting colocation services, as they have the funds to lease large spaces, and they can meet their power and computational requirements.

Colocation services also help large enterprises have complete control over the data center infrastructure.

Growth In North America 

North America is expected to have the largest market share and this is likely to continue until the near future.

The region is growing since numerous data centers keep popping up. This is because of the availability of comprehensive solutions.

The colocation data center market in APAC is expected to grow and is projected to be one of the fastest-growing regions in the global market.

The main reason for this is due to the increasing volumes of data center traffic in countries, such as India, Australia, and China. 

It’s exciting to see where the colocation data center market is at right now, and it’s even more exciting to see where it goes in the future.