The global data centre colocation service market to continue high growth over next 5 years

The global colocation services market continues to maintain its growth streak through the pandemic and is expected to continue on a high growth trajectory over the next 5 to 7 years, according to a report from ResearchAndMarkets.

Key factors that will drive growth during this period are increasing demand from hyperscale data centres, high levels of investment pouring in, the significant increase in data creation and consumption, high volumes of data traffic fuelled by emerging technologies, such as 5G, edge, IoT, along with AI/ML developments, ever-increasing enterprise outsourcing, increasing adoption of hybrid-cloud, and the high degree of data centre activity in emerging economies.

Colocation services are driven significantly by the increasing need for hyperscale capacity from the enterprises primarily from public cloud services provider segments. The contribution to demand is expected to continue throughout the forecast period. Hyperscale data centres are expected to increase from 509 data centres in 2019 to 890 in 2025 at a compound annual growth rate (CAGR) of 9.76 per cent. Most development is expected to happen in Asia and North America.

Asia-Pacific is expected to have a majority share in hyper-scale data centres globally, with more than 40 per cent of the market share by 2030. North America’s market share is expected to decline gradually during this period. Europe is expected to see its hyper-scale market share maintained between 19 per cent to 20 per cent as development in secondary markets and key locations of the Nordics and Eastern Europe drive growth in the continent.

The report also highlights India as a key market to watch out for. It has tremendous growth potential over the forecast period with an estimated CAGR of 22 per cent. It is one of the fastest-growing data centre markets in the world and is expected to emerge as the next hub of APAC during the forecast period.

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