Colocation Edge Data Center Market: A Flourishing Domain to Explore 

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data-centre

Colocation providers are more than infrastructure providers. They are strategic elements to enhance the company’s performance as a whole. In the year 2023, it has been found that almost 10,979 data center locations are there in the world.

Data centers help businesses distribute, store and interpret data with the use of a myriad of software and hardware tools. The exponentially rising demand for data centers is capturing the attention of a plethora of investors from domains such as real estate, buyouts, growth capital, etc. In the year 2021, there were almost 210 data center deals with a total value of USD 48.1 billion. Primarily, there are 4 types of data centers which are enterprise data centers, managed services data centers, colocation data centers, and cloud data centers. In this blog, we will dive deep into the various aspects related to the colocation edge data center market. 

In these (to locate 2 or more things together) data centers, an organization rents space in a data center possessed by others. The colocation solutions allow businesses to protect, store, and access crucial data cost-efficiently. The colocation providers have made a relationship with booming businesses by giving financial solutions for hosting data centers. In the current business landscape, data centers have become an imperative aspect of day-to-day operations in numerous industries. Colocation-edge data centers render companies a way to diversify their infrastructure.

Why is colocation edge data center market flourishing?

  1. Surging Demand from Businesses for Enhanced Speed- Speed is imperative for running a successful business and staying ahead in the market. For example, for a financial service provider, it is vital to provide high-frequency trading algorithms. Even a little slowdown in trading algorithms can severely impact ongoing operations. The edge colocation is helpful for businesses in delivering reliable and fast online experiences. It has been estimated that the utilization of data centers boosts the engagement of customers:
  • Almost 8.3% rise in retail conversions 
  • Almost 9.1% rise in order value
  • Almost 5.2% rise in retail customer engagement 
  • Almost 5.6% enhancement in bounce rate for product listing pages. 

2. Rising Need for Personalization- Edge colocation renders the ability to businesses to cache the dynamic content. It has been witnessed that almost 76.1% of the consumers are likely to purchase if the business is sending personalized messages. Unlike big data centers which give the same services to everyone (one size fits all approach), the edge colocation service providers can customize bandwidth based on region. 

3. Enhanced Security- The colocation services enable various customers to avail maximum security for the data in their services. It has been estimated that almost 49.1% of organizations have already included colocation in a hybrid information tech setup. The colocation service provider gives 24/7 security to ensure that there is a minimum risk of virus attacks and safety breaches. 

4. Cost Efficient- A data center consists of ultra-modern supporting infrastructure that maximizes performance. Also, the utilization of a data center makes operational costs more efficient in comparison to developing a company’s own data center. Moreover, almost 25.5% of the cost of new data centers comes from spending related to the primary designing, planning, and commissioning. 

Edge Colocation: A Thriving Market

The colocation edge data center market size is projected to reach USD 77 billion by the end of 2036. The market is rising at a CAGR of almost 20% during the forecast period. Furthermore, in the year 2023, the market size of the colocation edge center was over USD 7 billion. 

Associated Market Utilization 
5G market Colocation data centers help provide businesses low latency 
Internet of ThingsColocation edge data centers utilized where data needs more processing 
Telecommunication companies Able to provide better proximity 
Healthcare Network consistency and low latency
Autonomous vehicles Colocation data centers can be utilized to process, collect, and share data 
Smart factories Colocation edge data centers can be utilized for predictive quality management 

Colocation Edge Data Center: Type 

The colocation edge data center can be divided into 2 types: retail and wholesale. Out of these, the retail segment is projected to hold a share of almost 54% during the forecasted period. The reason for the growth of the segment can be attributed to its cost efficiency. 

News in Colocation Edge Data Center Market

-Recently, American Tower possess almost 9 colocation data centers, that includes 3 metro and 6 edge facilities in the US. The company joined hands with Colo Atl in 2019 and doubled down its data center strategy.

– CoreSite operates almost 28 locations in the United States, focusing on high-performance data centers rendering communication hubs across the United States. 

The Top Colocation Providers of 2024

Companies Estimated Square feet of rentable space Number of data centers 
CoreSite 4.71 million +28
Cyxtera Technologies Inc.2.91 million +60+
Digital Realty 34 million+300+
Equinix Inc.28 million250+
NTT ltd.5.3 million 200+

Regional Analysis

The colocation edge data center market in North America is projected to garner a maximum share of almost 35% by the year 2036. The market is projected to grow from USD 18,500 million in the year 2021 to almost USD 47,000 million by 2030. Rising e-commerce and retail sectors are driving the market growth in the region. The second region that is anticipated to garner remarkable growth is Asia Pacific with almost 28% of the market share. The growth of the market in the region can be attributed to rapid digital transformation. 

In a Nutshell

Looking back at predictions, it can be said that the colocation edge data center market is holding innumerable opportunities for investors. Although, it is important to understand the market scenarios properly. Understanding the market scenarios properly helps the investors make judicious decisions for excelling. An exhaustive study on factors such as market constraints, growth drivers, etc. helps in making impeccable strategies.  

Author

  • Aashi Mishra

    An experienced research writer, strategist, and marketer with a demonstrated history of research in a myriad of industries. I love to distill complex industrial terminologies of market space into simpler terms.

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