Managed Data Center Services Market - Forecasts from 2024 to 2029

The managed data center services market is evaluated at US$308.434 billion for the year 2022 growing at a CAGR of 14.93% reaching the market size of US$816.782 billion by the year 2029.

Managed data centre services comprise managed hosting, managed colocation, and managed storage services, among others. Other services comprise disaster recovery, network security, compliance, and network connectivity, to name a few.

Managed data centre services are expected to witness rapid growth over the next five years due to the growing number of data centres worldwide. Complexities are involved in setting up and operating data centres. Hence, enterprises are looking towards outsourcing as a primary option that helps them to optimize business processes while keeping control over critical IT infrastructure. North America is expected to be the major market for managed data centre services, constituting the maximum share, followed by Europe. In contrast, the Asia Pacific region is expected to witness maximum expansion over the forecast period on account of high growth being observed in the data centre market, favourable government policies, economic growth, and increasing investment towards IT infrastructure.

Enterprises are looking forward to the adoption of managed data centre services due to their cost-efficiency.

There is an increasing trend toward large and medium enterprises opting for managed data centres owing to their cost-efficiency, flexibility, and improvement in organisational efficiency. The cost of setting up an in-house data centre involves high capital expenditure, along with periodic maintenance expenditure. In addition, an enterprise has to incur high wages for hiring technical staff for upgrading, maintenance, and compliance with stringent government regulations. The space in an in-house data center is also limited and it can be scaled by increasing the capital expenditure on IT infrastructure. Resultantly, enterprises are opting for managed data centres as it saves on huge capital expenditure on IT infrastructure. In addition, managed data centres offer flexibility and scalability by offering a pay-per-use model, so any enterprise can increase their use at their convenience without the need to incur any substantial expenditure. This is one of the major factors driving the demand for managed data centre services worldwide. Furthermore, increasing investment towards adopting automation solutions and big data across industry verticals coupled with state-of-the-art services offered by vendors to comply with standard government regulations will further propel the demand for managed data centre services over the forecast period.

Based on enterprise size, large enterprises are expected to grow at a high rate

Large enterprises are projected to grow considerably during the forecast period. Huge volumes of data added to these data centres and huge costs associated with running and managing these data centres are steering business owners towards managed data centre services. Small and medium enterprises also hold a significant share in this market. The growth of this market among small and medium enterprises is being driven by the increasing popularity of data centre colocation among them. Furthermore, the growth of this market among large enterprises is being driven by the rapidly increasing digitization of business processes and the continuously increasing traffic on the internet, both of which are adding to the huge volumes of data at data centres every day. Currently, large enterprises hold a lion’s share of the total data centre space owned by enterprises worldwide and thus hold a major share of the data generated worldwide. Cost reduction continues to be at the forefront of the enterprises’ growth strategies, and the cost of running and maintaining data centres continues to surge exponentially on account of increasing data volumes. Therefore, enterprises are cutting back on their investments in the IT workforce and moving towards managed data centre services, thus boosting the market’s growth.

Asia Pacific is expected to grow at a high rate during the forecast period.

It can be associated with the expansion of data centres to handle massive volumes of data. Furthermore, it is projected that the region's extensive telecom network and expanding use of digital services will facilitate market expansion. Furthermore, it is anticipated that the growing number of SMEs and startups in the area will hasten the usage of data centre services. There is an increase in data produced by digital goods and services in Asia-Pacific. This can be attributed to the increasing population in the area and the growth of e-commerce. The Asia Pacific region is home to two major data centre marketplaces: those serving local demand and those serving domestic demand. These Tier II markets are particularly interesting due to the rapid population growth in these regions, which necessitates the need for additional data centre space.

Market key launches

• In August 2023, NTT Ltd., a leading IT infrastructure and services provider, announced that it has been named Amazon Web Services (AWS) first Direct Connect Delivery partner in Thailand following a thorough technical review. With this approval, NTT Thailand's data centres in Bangkok provide companies with a direct, safe link to the AWS cloud anywhere in the world. Through this collaboration, NTT will be able to better fulfil its promise to its clients to deliver cloud connectivity through AWS Direct Connect Services.
• In March 2023, SolarWinds, a leading supplier of easy-to-use, robust, secure IT management software, announced the opening of its first ITSM (information technology service management) data centre in Australia for users of its SolarWinds® Service Desk. Customers of SolarWinds will be able to exhibit compliance with data sovereignty regulations at the Sydney-based data centre, which will also aid in performance and speed improvements. With lower latency for users, faster responsiveness, and improved customer performance in the region, the new ITSM data centre is expected to improve the SolarWinds software as a service (SaaS)-delivered offering and increase customer availability to businesses throughout the Asia-Pacific and Japan (APJ) region in addition to Australian customers.

Segmentation:

By Type

• Managed Hosting
• Managed Colocation
• Managed Storage
• Others

By Enterprise Size

• Small Enterprises
• Medium Enterprises
• Large Enterprises

By Industry Vertical

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

By Geography

• North America
• USA
• Canada
• Mexico
• South America
• Brazil
• Argentina
• Others
• Europe
• UK
• Germany
• France
• Others
• Middle East and Africa
• UAE
• Saudi Arabia
• Israel
• Others
• Asia Pacific
• China
• Japan
• India
• South Korea
• Indonesia
• Others