LONDON--(BUSINESS WIRE)--Technavio analysts forecast the data center colocation market in the US to grow at a CAGR of close to 9% during the forecast period, according to their latest report.
The research study covers the present scenario and growth prospects of the data center colocation market in the US for 2016-2020. To calculate the market size, the report considers the rentable revenues of colocation facilities from both local and global vendors, irrespective of the types (retail and wholesale).
Technavio ICT analysts highlight the following four factors that are contributing to the growth of the data center colocation market in the US market:
- Reduction in capital and operational expenditure
- Increased adoption of cloud-based services
- Growing demand from SMEs
- Availability of advanced network connectivity
Reduction in capital and operational expenditure
Business operational demands are growing among enterprises in the US, which is leading to an increase in data center construction activities. The construction and operation of data centers involve high capital expenditure. With the inception of colocation, enterprises with less need for data centers can collocate space from existing data center operators.
Rajesh Kumar Panda, lead data center analyst at Technavio, says, “Data center colocation reduces the need for capital investment involved in the construction of data centers. It also reduces the operational expenditure to a considerable extent. Colocation vendors also provide managed colocation services through which enterprises can rent infrastructure managed by the vendors themselves. In addition, the vendors offer uninterrupted services and maintenance with regard to data center facilities, which increases the productivity and performance of enterprises.”
Increased adoption of cloud-based services
“The adoption of cloud-based services and big data analytics is growing rapidly. In addition, growing digitalization has resulted in a significant increase in the amount of enterprise data generated and processed,” says Rajesh.
Accessing the information stored in a data center involves the use of many devices; a powerful networking solution is required to offer high-availability services. In addition, digitalization has enabled the processing of application workloads on servers with cross-platform support. Processor manufacturers such as Intel are looking to increase the efficiency of a server in a distributed computing environment.
Growing demand from SMEs
SMEs are among the principal adopters of colocation services worldwide. SMEs have a limited budget and are always looking for services that can reduce their capital and operational expenditure. Colocation helps SMEs reduce their financial burden in building and operating data centers. The growing adoption of cloud-based services will lead to SMEs opting for cloud-enabled colocation facilities.
Based on business requirements, SMEs will contribute more to the revenue of retail colocation compared to wholesale colocation. Retail colocation vendors offer power infrastructure, cooling solutions, and security. Also, the widespread networking capability of colocation facilities will greatly benefit growing SMEs.
Availability of advanced network connectivity
Enterprises are witnessing a rapid increase in the digital content transmitted and manipulated in their networks. Due to rising network traffic and the increase in the complexity of network management, there is a growing need for human expertise to manage operations. However, with the adoption of colocation services, enterprises are finding it easier to manage network dynamics, control traffic flow, and scale up data center infrastructure efficiently.
Browse Related Reports:
- Global Data Center Colocation Market 2016-2020
- Global Multi-Tenant and Wholesale Data Center Market 2016-2020
- Global Data Center Colocation and Managed Hosting Services Market 2015-2019
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