World Data Center Colocation Market Outlook and Investment Prospects Report 2024: Cloud and Technology Companies Continue to Dominate the Global Demand for Data Center Capacity Uptake

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Mar 21, 2024, 18:45 ET

DUBLIN, March 21, 2024 /PRNewswire/ -- The "Worldwide Data Center Colocation Market - Investment Prospects in 9 Regions and 51 Countries" report has been added to ResearchAndMarkets.com's offering.

The worldwide data center colocation market by investment is expected to grow at a CAGR of 7.25% from 2022-2028, from USD 30.42 Billion in 2022 to reach USD 46.3 Billion in 2028.

Cloud and technology companies continued to dominate the global demand for data center capacity uptake - digitalization initiatives by public and private sector organizations and data localization laws further fuel colocation across Industry verticals.

Major data center hubs, namely North Virginia, Texas, California, Beijing, Shanghai, London, Frankfurt, Brazil, Paris, and Mumbai, continue witnessing sizable investments, cementing their dominance.

Power availability and supply chain constraints still daunt the data center market, causing the construction timelines to grow from an average of 18 months to around 30 months. Construction costs have also increased to around 20%-30% across key locations worldwide, increasing colocation rental pricing.

KEY TRENDS

Initiatives for sustainable operations involve transitioning to renewable energy sources. For example, major data center operators like Equinix and Vantage Data Centers actively invest in green bonds, tax credits, and partnerships with energy providers to support the shift to renewable energy.
The increase in rack power density prompts the adoption of innovative designs. For instance, large data centers implement liquid and precision air cooling to handle densities up to 50 kW efficiently. Data center operators are actively involved in this transition to support AI/ML workloads using liquid cooling.
The trend of connected devices exemplifies the adoption of IoT and big data technologies. Major players like Microsoft, Amazon Web Services, and Oracle are actively adopting ARM-based technology for efficient data processing. Additionally, companies like Meta are heavily investing in AR/VR technologies for the emerging Metaverse.
The Canadian government's tax credits for renewable energy projects, Europe's Climate Neutral Data Center Pact, and initiatives in regions like Latin America and APAC showcase the impact of government regulations on data center practices. Operators in the data center colocation market, like Equinix and Digital Realty, have ambitious plans for carbon neutrality. These operators are actively working towards significant reductions in carbon emissions by 2030 or 2040, aligning with global sustainability goals.
The Uptime Institute forecasts demand for approximately 326,700 full-time employees in data centers worldwide by 2025, highlighting the need for skilled professionals. Collaborations between industry and educational institutions, such as training programs, are essential. Collaboration with educational institutions addresses the shortage of skilled personnel in data centers.
The Russia-Ukraine conflict and the COVID-19 pandemic have led to supply chain disruptions impacting data center construction. To address this, operators are adopting measures like increasing the number of suppliers and using prefabrication to mitigate lead times. Government initiatives also play a role in boosting local supply.

GEOGRAPHICAL ANALYSIS

The U.S. and China markets continued to dominate the worldwide data center colocation market in terms of colocation revenue and investments across the globe. Colocation revenue generated in the U.S. stands at around USD 18 billion, followed by China at around USD 12 billion. These countries will continue to add GW of power capacity YOY with around 300+ upcoming data center projects.
Latin American countries like Brazil, Chile, Colombia, and Mexico are making strides in green data center development. Brazil takes the lead as the dominant data center colocation market in Latin America, commanding over 45% of the region's investments.
The data center colocation market is thriving in Europe, particularly in Western Europe. The FLAP market continues to dominate in data center capacity additions. Secondary markets, namely Spain, Italy, Portugal, and Belgium, are witnessing strong growth through recent announcements. The Nordics stand out as a hub for sustainable investments, with Norway leading the race in 2022. Meanwhile, Central and Eastern Europe are witnessing increased interest, with over USD 450 million invested in the region in 2022.
Regarding revenue generated through colocation services, APAC takes the lead with investments of over USD 21 billion in 2022, with China being the major contributor in 2022.

SEGMENTATION ANALYSIS

Segmentation by Infrastructure

Electrical Infrastructure
Mechanical Infrastructure
General Construction

Segmentation by Colocation Type

Retail Colocation
Wholesale Colocation

Segmentation by Electrical Infrastructure

UPS Systems
Generators
Transfer Switches & Switchgear
PDUs
Other Electrical Infrastructure

Segmentation by Mechanical Infrastructure

Cooling Systems
Racks
Other Mechanical Infrastructure

Segmentation by Cooling Systems

CRAC & CRAH Units
Chiller Units
Cooling Towers, Condensers & Dry Coolers
Economizers & Evaporative Coolers
Other Cooling Units

Segmentation by Cooling Technique

Air-Based
Liquid-Based

Segmentation by General Construction

Core & Shell Development
Installation & Commissioning Services
Engineering & Building Design
Fire Detection & Suppression
Physical Security
DCIM

VENDORS LIST

Prominent Data Center Investor

China Mobile International
China Telecom
China Unicom
Chindata Group
CoreSite
CyrusOne
Digital Realty
EdgeConneX
Equinix
GDS Services
NTT Data
STACK Infrastructure
ST Telemedia Global Data Centres
Vantage Data Centers
VNET

Other Prominent Vendors

365 Data Centers
AdaniConneX
Africa Data Centres
AirTrunk
Aligned Data Centers
American Tower
Atman
atNorth (Partners Group)
AT TOKYO
Aruba
Big Data Exchange (BDx)
CDC Data Centres
Center3
Chayora
CloudHQ
Cologix
Colt Data Centre Services (Colt DCS)
Compass Datacenters
COPT Data Center Solutions
CtrlS Datacenters
Cyxtera Technologies (Brookfield Infrastructure Partners)
DATA4
DataBank
DC BLOX
DCI Indonesia
Edge Centres
ePLDT
Flexential
Global Switch
Green Mountain
Gulf Data Hub
H5 Data Centers
HostDime
Iron Mountain
Internet Thailand
KDDI
Keppel Data Centres
Khazna Data Centers
LG Uplus
MettaDC
NEXTDC
Open Access Data Centres
Orange Business Services
Princeton Digital Group
QTS Realty Trust
Rostelecom Data Centers
Sabey Data Centers
Skybox Datacenters
Stream Data Centers
Scala Data Centers
Sify Technologies
SUNeVison Holdings (iAdvantage)
Switch
T5 Data Centers
Tenglong Holding Group
TierPoint
Turkcell
Urbacon Data Centre Solutions
Viettel IDC
Wingu
Yondr
Yotta Infrastructure

New Entrants

AQ Compute
Corscale Data Centers
Gaw Capital Partners
EDGNEX Data Centres by DAMAC
ESR
Gatineau Data Hub (GDH)
iMCritical
IXAfrica
Kasi Cloud
PowerHouse Data Centers
Quantum Loophole
QScale
YCO Cloud
YTL Data Center

For more information about this report visit https://www.researchandmarkets.com/r/30grhf

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