Colocation Market to Grow to $43.34 Billion by 2018

Colocation services help protect the digital assets of businesses and individuals in the event of a disaster of their on-site operations. Whether it is a fire, flood or a cyber attack, having this information housed in a remote data center ensures systems can be up and running with minimal interruption. According to a recent report, the colocation market will grow to $43.34 billion by 2018 from the estimated $25.72 billion in 2013, a compound annual growth rate (CAGR) of 11 percent.

This market is widely segmented by the type of colocation, end-users, verticals and region. Everyone from small office home offices (SOHO) to large-scale enterprises and governmental organizations use colocation services throughout the world. Having the digital asset dispersed throughout the world provides a multi-redundant system that ensures the asset is protected.

Colocation services are also being used by enterprises to reduce their IT investment for their on-site operations. Using cloud technology, they are able to reduce maintenance costs while at the same time leveraging the latest available applications along with security and reliability. They also use colocation services to take advantage of higher bandwidth availability and backup power, which can add up to a significant percentage of IT operational costs.

According to the report from MarketsandMarkets, the demand outweighs the available resources for colocation services, which is exasperated by the expense attached to building new centers that have to meet many of the regulatory compliances.

The data centers are under increasing pressure to improve the way in which the centers operate, especially in regard to power consumption, which is one of the biggest public relations problems the industry faces. With one data center consuming the same power as tens of thousands of homes, they have to start addressing this issue. The need to reduce their carbon footprint is becoming a bigger news item then the valuable service the industry provides for the world we live in today.

More colocation centers are expected to be deployed around the world in the next two years to meet the continual demand with new computing capacity and improved power technology. The report covers market drivers, the competitive landscape, future market opportunities, restraints, and present and future players.