Worldwide Data Center Colocation Market - Investment Prospects in 9 Regions and 51 Countries

The worldwide data center colocation market by investment is expected to grow at a CAGR of 7.25% from 2022-2028.

KEY HIGHLIGHTS

• 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.

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

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 by Geography

• North America
• Latin America
• Western Europe
• Nordics
• Central & Eastern Europe
• Middle East
• Africa
• APAC
• Southeast Asia

KEY QUESTIONS ANSWERED

1. How big is the data center colocation market?
2. What are the key trends in the data center colocation market?
3. What is the growth rate of the worldwide data center colocation market?