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Colocation becoming a $54 billion market

05 Feb 2016

The data center colocation market will more than double by 2020 as organisations turn to offerings such as modular data center infrastructure and virtualisation.

Research And Markets says the data center colocation market will be worth US$54.13 billion by 2020, up from US$25.70 billion last year. That’s a compound annual growth rate of 16.1%.

The research company’s Data Center Colocation Market by Service Types, End Users and Regions – Global Forecast to 2020 report says increasing adoption of cloud computing has led organisations to turn to solutions such as modular data center infrastructure and virtualisation, which is driving the market.

“Colocation initiatives help companies to reduce costs and support cloud computing and storage,” Research and Markets says. “Other driving forces include reduction of capital expenditure, reliability, efficiency and security, and bandwidth scalability.”

The company also highlights an increasing interest in hybrid cloud-based colocation facilities as organisations adopt cloud computing to run a mix of in-house and outsourced data center services.

While North America is projected to dominate the data center colocation market through to 2020, it is Asia Pacific which will experience the highest compound annual growth rate during the period, with increasing technological adoption and huge opportunities in countries including China, India and Japan.

Meanwhile, Research and Markets says major players in the $54 billion market include CenturyLink, Digital Realty Trust, Equinix, NTT Communications and Verizon Communications.

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