Americas Data Center Colocation Market - Forecasts from 2024 to 2029

The Americas data centre colocation market is evaluated at US$21.741 billion for the year 2022 growing at a CAGR of 10.9% reaching the market size of US$44.848 billion by the year 2029.

Information and communications technology are at the heart of the digital economy. It is estimated that increasing investments in information and communications technology will positively impact the colocation market during the forecasted period. The major growth drivers of America's data center colocation market are the presence of a large number of small and big players, increasing adoption of cloud computing solutions, and rising demand from service providers. The other major factor augmenting the growth of the colocation market is the increasing focus on data privacy and regulation in the country. Enterprises operating in the entertainment and media, healthcare, communication, and government sectors are increasingly outsourcing their IT infrastructure needs as well as opting for colocation space to focus on their core business operations and reduce operating costs.

Rising penetration of 5G technology

5G technology is expected to be launched during the forecast period, which is further anticipated to increase the volume of internet traffic and the requirement for the storage of digital data. This is expected to supplement the growth of the data center colocation market with an increasing amount of data that will be required to be stored in the cloud, and firms with a limited capacity will demand colocation services to meet the growing demand effectively.

Increasing need for data security compliance

By industry vertical, data security compliance and the requirement for huge data storage are the key aspects of technology deployment in the banking and financial services industry. The industry requires analyzing huge volumes of customer data gathered from different sources to provide efficient and customer-centric services. The BFSI sector is witnessing growth across the world and enterprises are constantly upgrading their existing IT infrastructure while moving on to the latest solutions. In developing economies such as Brazil and Mexico, there is a renewed focus on social integration.

By the colocation model, retail colocation is expected to grow at a high rate

By the colocation model, the market is segmented into retail and wholesale colocation models, which are offered by different colocation service providers. Retail colocation accounts for the major market, while wholesale colocation providers have started focusing on short-term deals to remain competitive. The retail colocation service providers have modified their existing strategy to meet the challenge arising from wholesale colocation solution providers. To cater to a different segment of small customers, retail colocation service providers are buying out a large chunk of space from the wholesale colocation providers and are then reselling the space to small and medium enterprises while catering to the additional requirements of large enterprises.

The United States is expected to grow at a high rate during the forecast period.

The United States is among the nations experiencing the fastest growth in terms of technological advancements and innovations. It is expected that the Industrial Internet of Things (IIoT) will be easier to implement with the introduction of advanced networking technologies brought by the upcoming sixth-generation (6G) networks. These upgraded networks will provide better connectivity and functionalities, making it easier to incorporate IIoT into various industries and easier for companies to take advantage of its advantages. Operators have a strong interest in Virginia and the Southeast in general. They invest a lot of money to increase their market share and presence in the region. Oregon, Idaho, Utah, and California are part of the fully developed colocation market that is the Western U.S. region. Numerous data center locations in these states provide colocation services to nearby businesses and organizations.

Product Offerings:

• Rackspace Cloud DNS by Rackspace: The Rackspace Cloud DNS infrastructure is a distributed Anycast network that encompasses many regions across the world. Texas, Illinois, Virginia, and London are among the states where Rackspace has DNS servers. It divides up its name servers within each data centre to prevent a single point of failure in the vicinity of DNS servers.
• Telehouse Enhanced Connect by Telehouse: The most advanced Cloud Acceleration solution is enabled by Telehouse Enhanced Connect. The Cloud Acceleration solution offers businesses an optimized, intelligent, private network that enables expedited access to software hosted in public, private, or hybrid clouds. The global and private cloud overlay network is within 1-5ms of most cloud service providers.

Market key launches

• In January 2023, in Santa Clara, California, construction has started on a new facility for US data center operator EdgeCore Digital Infrastructure. The first of two planned data centers has officially started construction on the intersection of Juliet Lane and Laurelwood Road, according to the company. The two-story SV01 will provide 36 Megawatts and 255,200 square feet of space.
• In March 2022, the colocation business Telehouse opened its sixth data center in London Docklands, stating that once it is fully operational, it will be the largest facility in the world. The company has spent £223 million renovating the structure, which was originally the location of a Thomson Reuters data center. This has a 2MW power capacity and can accommodate up to 668 racks; an expansion to 2.7MW for an extra data hall is planned for the end of 2023.

Segmentation:

By Colocation Model

• Retail Colocation
• Wholesale Colocation

By End Users

• Small Enterprises
• Medium Enterprises
• Large Enterprises

By Industry Vertical

• Banking and Financial Services
• Manufacturing
• Communication and Technology
• Healthcare
• Energy
• Government
• Media and Entertainment
• Others

By Geography

• United States
• Canada
• Mexico
• Brazil
• Argentina
• Others