Companies in the internet related businesses are now resorting on colocation, which is a popular type of data center. Colocation or colocation center is a type of data-center where bandwidth and storage space is available for rent. This space and bandwidth is rented out to the retail customers for them to attain cooling, power, space and physical security for the storage, server and networking equipment. Colocation market is largely driven by midsize IT companies and other businesses related to information technology. The global industry for colocation center is expected to witness steady growth within next four to five years, which is a great sign for the existing businesses in the industry that are looking for expansions. The market conditions are also positive for new investments.

Segmentation in Colocation Market

Basic segmentation in colocation center market is based on four factors, which include types of colocation, end-users, business verticals and geographic regions. Following are the details of the market segmentation:

• Colocation: Retail and wholesale
• End users: Small and medium businesses, small office home offices, large companies
• Businesses: BFSI, public sector, government, utilities, healthcare, life sciences, telecom and IT
• Geography: Europe, North America, Latin America, Asia Pacific and Middle East and Africa

Forecasting for Colocation Centers Market

Global colocation market is poised to witness steady growth from 2013 to 2018. During the aforementioned forecasting period, the industry is expected to grow at an impressive CAGR of 11%. At this compound annual growth rate, the market will reach past $43.34 billion by 2018. As of 2013, the market is safely set at $25.72 billion. Enterprises from across the world are increasingly choosing the colocation services, in order to cut down their in-house IT maintenance costs, ensure reliability, guard safety and avail high-bandwidth. Colocation centers are capable of providing all these facilities to small, medium and large enterprises and help maintain their data in much better way.

Owing to these features, there is a great demand for colocation space, which is currently available resources are not able to complete the rising demand in the market. This shortage and rising competition in different geographic regions are driving the global markets. Increasing need for computing resources, budding businesses in need for colocation facilities and easily upgradable structure of these facilities are some of the biggest driving factors for the industry. Continuation in building new storage and bandwidth capacity are creating better business opportunities for the global industry.