Colocation Market Analysis by Type, End-User and Industry Vertical 2015-2020 | CenturyLink Technology Solutions, Verizon Communication Ltd, KDDI Corporation, NTT Data Corporation, American Telephone & Telegraph

The colocation facility is the administration that allows small and large organizations to set up their servers (or contract a server on rent) at the location of data center suppliers. This permits companies to concentrate on their core business activities. The global colocation market is expected to grow at a CAGR of 12.4% during the forecast period, 2015-2020.

The colocation facility provides cost-effective solutions for organizations against the installation of servers at their own premises. It eliminates the prerequisite requirements of space and reduces the operating cost incurred for cooling and heating systems. In addition, handling the operation of data centers requires IT expertise for the company, which can be handled by colocation facilities. Moreover, the growing awareness of the reduction of carbon footprints is has boosted the growth of the market. However, due to limited network bandwidths available in colocation, some organizations prefer in-house LAN connected data center facilities to colocation. In any case, high start-up capital expenditure and continually fluctuating operational expenses act as restraints for the market, as these factors do not permit the organizations to keep control over their expenses. Colocation data centers supplemented with cloud computing permits adaptability and enhanced networking capabilities, thus, promoting opportunities for the growth of the market.

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The market is segmented on the basis of retail solution and wholesale solution for colocation hosting. The retail solution consists of shared rack space, which is generally preferred by small and medium enterprises (SMEs). The wholesale solution allows companies to have a dedicated rack space or floor space to host their servers. The retail colocation holds the highest market share in the colocation market. However, the wholesale colocation segment would exhibit the highest growth rate during the forecast period.

The end-user market is segmented into SMEs and large organizations. Large organizations are further segmented into Banking, Financial Services and Insurance (BFSI), government and public sector utilities, telecommunication & IT and healthcare and life sciences. The share of large organizations is more as they opt for colocation services on a larger scale. However, it is expected that the SMEs would have better growth potential as more small businesses would prefer retail colocation services.

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geographically, the market is segmented into North America, Europe, Asia-Pacific, and LAMEA. North America is anticipated to be the largest market for colocation. The Asia-Pacific market for colocation had accounted for 24.9% of the overall colocation market and expected to grow at a higher CAGR of 14.3% during 2015-2020. The economic growth rate of the developing countries in the Asia-Pacific region would promote more organizations to opt for colocation hosting. Therefore, this region is likely to have the highest growth rate, whereas LAMEA is expected to grow at a decent pace.

The principal strategies adopted by key companies of the market are partnerships and collaborations. This facilitates the provision of strategic location services to Equinix, Inc, Interxion Holding NV, SunGuard Availability Services, CenturyLink Technology Solutions, Verizon Communication Ltd, KDDI Telehouse Corporation, NTT Data Corporation, American Telephone & Telegraph, Inc., Telecity Group, Global Switch Corporation, DuPont Fabros Technology, Inc., Digital Realty, Rackspace and Navisite, Inc.

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