Colocation Edge Data Center Market Overview
colocation edge data center market size was estimated at 6.3 (USD Billion) in 2023. The colocation edge data center market industry is expected to grow from 6.7 (USD Billion) in 2024 to 30.2 (USD Billion) by 2032. The colocation edge data center market CAGR (growth rate) is expected to be around 18% during the forecast period (2024-2032).
Key Colocation Edge Data Center Market Trends Highlighted
The colocation edge data center market is experiencing significant growth, driven by the increasing demand for cloud computing, IoT devices, and mobile data traffic. This market is witnessing a surge in the adoption of colocation services by enterprises and service providers, who require proximity to end-users for low-latency applications and real-time data processing. The rise of edge computing is further fueling market growth, as organizations seek to deploy their compute resources closer to the edge of the network, where data is generated and consumed.
Recent trends in the colocation edge data center market include the emergence of hyperscale data centers, which offer vast amounts of computing and storage capacity to support large-scale cloud and enterprise applications. Additionally, there is a growing trend towards the adoption of modular and prefabricated data center solutions, which offer faster deployment times and increased flexibility. As the market matures, we expect to see continued growth in the adoption of colocation edge data center services, driven by the increasing demand for real-time data processing and the expansion of IoT and 5G technologies.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Colocation Edge Data Center Market Drivers
Rising Demand for Edge Computing
The growing adoption of edge computing is a major driver of the Colocation Edge Data Center Market. Edge computing brings computation and data storage closer to the end-user, reducing latency and improving performance for applications that require real-time data processing. The increasing use of edge computing in industries such as manufacturing, healthcare, and retail is driving the demand for colocation edge data centers, which provide the necessary infrastructure to support these applications.Furthermore, the growing popularity of Internet of Things (IoT) devices and the increasing generation of data at the edge are also contributing to the growth of the market.
Expansion of 5G Networks
The rollout of 5G networks is another key driver of the Colocation Edge Data Center Market. 5G networks offer significantly faster speeds and lower latency than previous generations of wireless technology, making them ideal for applications that require real-time data processing and low latency. The deployment of 5G networks is expected to create a surge in demand for edge data centers, which are essential for supporting the increased traffic and data processing requirements of 5G applications.
Growing Adoption of Cloud and Hybrid IT
The increasing adoption of cloud and hybrid IT models is also driving the growth of the Colocation Edge Data Center Market. Enterprises are increasingly moving their IT infrastructure to the cloud to take advantage of the benefits of scalability, flexibility, and cost savings. However, many enterprises still require on-premises infrastructure for certain applications and workloads. Colocation edge data centers provide a cost-effective solution for enterprises to deploy their IT infrastructure in close proximity to their end-users, while still maintaining the benefits of cloud and hybrid IT models.
Colocation Edge Data Center Market Segment Insights
Colocation Edge Data Center Market Service Type Insights
The Service Type segment of the Colocation Edge Data Center Market is categorized into Colocation, Managed Services, and Professional Services. Colocation services provide physical space, power, cooling, and connectivity for customers to house their IT equipment in a carrier-neutral facility. Managed Services encompass a broader range of services, including infrastructure management, application management, and security services, to ensure the smooth operation of IT systems. Professional Services involve consulting, design, implementation, and support services to assist customers in planning, deploying, and managing their colocation and edge data center solutions.Colocation is the dominant Service Type segment, accounting for a significant share of the Colocation Edge Data Center Market revenue. The growing demand for colocation services is primarily driven by the increasing adoption of cloud computing, big data analytics, and the Internet of Things (IoT).
Enterprises are increasingly outsourcing their IT infrastructure to colocation providers to benefit from cost savings, scalability, and enhanced security. Managed Services is another key segment, with a growing demand for outsourced IT management services.Enterprises are seeking managed service providers to handle the complex tasks of managing their IT infrastructure, allowing them to focus on their core business operations. Managed Services providers offer a range of services, including infrastructure monitoring, maintenance, patching, and security management, to ensure the optimal performance and security of IT systems. Professional Services play a crucial role in the Colocation Edge Data Center Market, providing expertise and guidance to customers throughout the planning, deployment, and management of their colocation and edge data center solutions.These services include consulting, design, implementation, and support, helping customers optimize their IT infrastructure for performance, efficiency, and cost-effectiveness. The Colocation Edge Data Center Market is expected to continue its growth trajectory in the coming years, driven by the increasing demand for colocation, managed services, and professional services. The adoption of next-generation technologies, such as 5G and artificial intelligence (AI), will further fuel the growth of the market, as enterprises seek reliable and efficient data center solutions to support their digital transformation initiatives.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Colocation Edge Data Center Market Deployment Model Insights
The deployment model segment of the Colocation Edge Data Center Market is categorized into On-Premises and Cloud-Based. The On-Premises model held the dominant market share in 2023, accounting for around 62.1% of the market revenue. This is primarily attributed to the need for enterprises to maintain physical control over their data and infrastructure, ensuring data security and compliance. However, the Cloud-Based model is expected to gain significant traction in the coming years due to its scalability, cost-effectiveness, and flexibility.It allows enterprises to access data center resources on demand, reducing infrastructure costs and enabling faster deployment of applications and services.
Colocation Edge Data Center Market End-User Industry Insights
The end-user industry segment of the Colocation Edge Data Center Market offers valuable insights into the diverse applications of edge data centers across various sectors. In 2023, the IT and Telecom industry accounted for the largest revenue share of 35%, driven by the increasing demand for data storage and processing at the network edge. The BFSI sector is projected to witness significant growth over the forecast period, with a revenue share of 20% by 2032. The Manufacturing industry is also expected to contribute to market growth, with a focus on real-time data analytics and automation.The Healthcare industry is leveraging edge data centers for remote patient monitoring and medical imaging, with a revenue share of 15%. Additionally, the Government and Education sector is expected to adopt edge data centers for smart city initiatives and research applications, contributing to a revenue share of 10%.
Colocation Edge Data Center Market Data Center Size Insights
With a growing demand for edge computing, the Colocation Edge Data Center Market is experiencing a surge in demand for various data center sizes. The market segmentation based on data center size offers insights into the specific requirements and trends within the industry. Small Edge Data Centers (Less than 500 sq ft): These compact facilities are gaining popularity for their adaptability and cost-effectiveness. They are ideal for businesses with limited space and power requirements, such as retail stores, small offices, and remote locations.The market for small edge data centers is expected to witness significant growth in the coming years. Medium Edge Data Centers (500 to 2,500 sq ft): This segment caters to businesses with moderate space and power needs. They are commonly deployed in urban areas and enterprise campuses. The growing adoption of edge computing by enterprises is driving the demand for medium-sized edge data centers. Large Edge Data Centers (More than 2,500 sq ft): These large-scale facilities are designed to handle high-density computing and storage requirements. They are typically located in major metropolitan areas and serve as regional hubs for data processing and distribution.The Colocation Edge Data Center Market revenue for large edge data centers is projected to grow at a substantial rate.
Colocation Edge Data Center Market Regional Insights
The Colocation Edge Data Center Market segmentation by region offers valuable insights into the market's geographical distribution and growth prospects. North America is expected to dominate the market in 2023, accounting for over 40% of the Colocation Edge Data Center Market revenue. The region's rapid adoption of cloud computing, digital transformation initiatives, and presence of major technology hubs contribute to its dominance. Europe is projected to follow closely, driven by the growing demand for data-intensive applications and the increasing adoption of edge computing in various industries.APAC is anticipated to witness significant growth due to the rising internet penetration, expanding data center infrastructure, and government initiatives supporting digitalization. South America and MEA are expected to experience steady growth, supported by increasing investments in data center infrastructure and the growing adoption of cloud services.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Colocation Edge Data Center Market Key Players and Competitive Insights
Major players in the colocation edge data center market are constantly striving to gain a competitive advantage by investing in research and development, expanding their product portfolios, and forming strategic partnerships. Leading players are focusing on developing innovative solutions to meet the evolving needs of customers.
They are also investing in expanding their footprint to cater to the growing demand for colocation services across different regions. The Colocation Edge Data Center Market Competitive Landscape is characterized by intense competition, with several established players and emerging startups vying for market share. These players are continuously adopting new technologies and strategies to differentiate their offerings and attract customers.
Equinix is a leading provider of colocation and interconnection services globally. The company has a wide network of data centers located in key markets around the world. Equinix offers a range of colocation services, including traditional colocation, managed colocation, and cloud-based colocation. The company also provides interconnection services, which allow customers to connect their infrastructure to multiple networks and cloud providers. Equinix is known for its high-quality infrastructure and its ability to provide customers with a reliable and secure environment for their IT infrastructure.
Digital Realty is another major player in the Colocation Edge Data Center Market. The company has a network of data centers located in key markets around the world. Digital Realty offers a range of colocation services, including traditional colocation, managed colocation, and cloud-based colocation. The company also provides interconnection services, which allow customers to connect their infrastructure to multiple networks and cloud providers. Digital Realty is known for its large scale and its ability to provide customers with a cost-effective and flexible solution for their IT infrastructure.
Key Companies in the Colocation Edge Data Center Market Include
-
NTT Data Centers
-
Aligned Data Centers
-
Iron Mountain
-
Vantage Datacenters
-
EdgeConneX
-
Cologix
-
Digital Realty Trust
-
DataGryd
-
Telehouse
-
Zayo Group
-
Vertiv
-
Schneider Electric
-
Equinix
-
CyrusOne
-
QTS Realty Trust
Colocation Edge Data Center Market Developments
The Colocation Edge Data Center Market is projected to grow from USD 33.73 billion in 2023 to USD 65.12 billion by 2032, at a CAGR of 7.58%. The increasing adoption of cloud computing, the growing demand for data storage and processing, and the need for low-latency applications are driving the growth of the market.Recent developments in the market include the launch of new edge data centers by major players such as Equinix, Digital Realty, and CyrusOne. These companies are investing heavily in expanding their footprint and offering a wider range of services to meet the growing demand for edge computing.The market is also seeing the emergence of new technologies, such as artificial intelligence (AI) and machine learning (ML), which are being used to optimize the performance and efficiency of edge data centers. These technologies are helping to reduce latency, improve data security, and provide real-time insights.
Colocation Edge Data Center Market Segmentation Insights
-
Colocation Edge Data Center Market Service Type Outlook
-
Colocation
-
Managed Services
-
Professional Services
-
Colocation Edge Data Center Market Deployment Model Outlook
-
Colocation Edge Data Center Market End-User Industry Outlook
-
IT and Telecom
-
BFSI
-
Manufacturing
-
Healthcare
-
Government and Education
-
Colocation Edge Data Center Market Data Center Size Outlook
-
Small Edge Data Centers (Less than 500 sq ft)
-
Medium Edge Data Centers (500 to 2,500 sq ft)
-
Large Edge Data Centers (More than 2,500 sq ft)
-
Colocation Edge Data Center Market Regional Outlook
-
North America
-
Europe
-
South America
-
Asia Pacific
-
Middle East and Africa
|
Report Attribute/Metric
|
Details
|
|
Market Size 2023
|
6.3 (USD Billion)
|
|
Market Size 2024
|
6.7 (USD Billion)
|
|
Market Size 2032
|
30.2 (USD Billion)
|
|
Compound Annual Growth Rate (CAGR)
|
18% (2024-2032)
|
|
Report Coverage
|
Revenue Forecast, Competitive Landscape, Growth Factors, and Trends
|
|
Base Year
|
2023
|
|
Market Forecast Period
|
2024-2032
|
|
Historical Data
|
2019-2023
|
|
Market Forecast Units
|
USD Billion
|
|
Key Companies Profiled
|
NTT Data Centers, Aligned Data Centers, Iron Mountain, Vantage Datacenters, EdgeConneX, Cologix, Digital Realty Trust, DataGryd, Telehouse, Zayo Group, Vertiv, Schneider Electric, Equinix, CyrusOne, QTS Realty Trust
|
|
Segments Covered
|
Service Type, Deployment Model, End-User Industry, Data Center Size, Region
|
|
Key Market Opportunities
|
5G and edge computing expansion
Growing demand for data storage
Increasing adoption of cloud services
Rise of artificial intelligence and machine learning
Expansion in emerging market economies
|
|
Key Market Dynamics
|
Cloud Computing Adoption
5G Expansion
IoT Proliferation
Demand for Low Latency
Increased Data Traffic
|
|
Countries Covered
|
North America, Europe, APAC, South America, MEA
|
Frequently Asked Questions (FAQ) :
The colocation edge data center market totaled to approximately USD 6.3 billion in 2023.
The Colocation Edge Data Center Market is projected to grow at a CAGR of 18% from 2024 to 2032.
Key factors driving the market growth include increasing demand for cloud and edge computing, rising data consumption, and the proliferation of IoT devices.
North America is expected to hold the largest market share in the Colocation Edge Data Center Market by 2032.
Key applications include content delivery, cloud computing, enterprise IT, and disaster recovery.
Major competitors include Equinix, Digital Realty, CyrusOne, and NTT Data Centers.
The Colocation Edge Data Center Market is expected to reach a valuation of approximately USD 30.2 billion by 2032.
The market is expected to witness significant growth due to increasing demand for edge computing and cloud-based services.
Challenges include meeting the increasing demand for bandwidth and power, as well as ensuring the security and reliability of edge data centers.
Opportunities for growth include the development of new technologies, such as AI and machine learning, and the expansion of edge data centers into new regions.
