The Global Market for Colocation and Managed Hosting (CMH) is forecast to reach $568.3 million by 2025, growing at a CAGR of 14.8% from 2020 to 2025. The market growth is attributed to the factors such as growing deployment of cloud-based storage systems, rising growth of advanced technologies such as IoT, AI and many others along with providing increased work productivity across different industries. Moreover, growing investments from various sectors towards infrastructure development of data centres are also booming the market growth.
With large industries facing problems for storing their massive amounts of data, deployments on data centres can help them majorly in successfully managing sensitive company information systematically.
APAC region is anticipated to dominate the Colocation and Managed Hosting (CMH) market in the forecast period 2020-2025 owing to growing digitization, technological developments, strategic collaborations and others.
By Solutions- Segment Analysis
Cooling system segment held the highest market share of Colocation and Managed Hosting (CMH) in 2019. Moreover, it is anticipated to witness the significant market growth during the forecast period 2020-2025. Suitable designs for air containment and cooling walls encourage ventilation, which may help reduce cage hot spots. Improved cooling can also extend the life of your appliances by reducing system errors, and increasing efficiency. Cooling system consists of air conditioners, air handling unit, chiller, cooling towers, pumps and others that has different cooling strategies including free cooling (Air-Side Economization, Water-Side Economization), air Containment (Cold-Aisle Containment, Hot-Aisle Containment), and closed loop cooling. The factors such as growing data centres, technological developments, growing expenditure through regulated cloud providers and colocation networks, rising adoption of IOT devices, edge computing and others boosts the market growth.
By End User Type- Segment Analysis
Colocation and Managed Hosting (CMH) market is segmented into Banking and Financial Institutions (BFSI), IT and Telecommunications, Government, E-Commerce, Others on the basis of end user type. IT & Telecomm segment segment is anticipated to witness the significant market growth during the forecast period 2020-2025. The market growth is due to a high demand for modernized IT infrastructure. Colocation data centres provide service to a wide range of customers. In order to accommodate the needs, these facilities implement multiple solutions. Generally, multiple ISPs with different kinds of bandwidth support. The colocations provide an array of options to access to other solutions if one of them fails. Colocations have to meet service-level agreements (SLAs) to stay in business. It creates a standard. Colocation facilities provide multiple layers of physical and technical security. Better security staff, cameras and technology provides a higher level of protection. In March 2019, NVIDIA RTX Server Lineup expands to meet growing demand for data centre and cloud graphics applications. Such expansions leverages a positive impact on the market growth.
Geography – Segment Analysis
APAC region is anticipated have the significant market growth during the forecast period 2020-2025. The market growth is owing to growing digitization, industrialisation technological developments, growing data centres and others. Colocation centres is a combination of cloud or mixed computing providers with companies running servers of their own. This business model delivers safety, lower operating costs and zero infrastructure costs. Moreover growing IT & Telecom segment is dominating the data centre cooling market. This is due to the increasing digitalisation and introduction of technologies such as big data and cloud in this field. Such developments pose a high challenge to data storage and availability. Companies are advocating for better data storage, networking and IT infrastructure to effectively cater for demand. Equinix, Inc. confirmed the launch of its eleventh IBX TY11 data centre in Japan in July 2019. It has introduced energy-efficient lighting systems, adaptive control systems that minimize power consumption, and improve cooling efficiency by active airflow management, and cold aisle containment that reduces energy consumption and boosts cooling. Such product launches enhances the market growth.
Drivers – Colocation and Managed Hosting (CMH) market
With rapid technological growth, there is rise of structured as well as unstructured data in the market. Large enterprises as well as small scale businesses both require a flexible data management system to store their huge amounts of data securely. Rising technological advancements such as adoption of cloud, IOT and many others are significantly contributing towards higher growth of data centre market. Moreover, rapid adoption of such advanced technologies for creating a reliable and comparatively more cost efficient data storage management has been helping the mid-size industries to invest in data centres, impacting its market growth. With the compilation of cloud technology, IoT and many others, data storing becomes more effective due to availability of more storage space compared to traditional data storage systems, which creates higher deployment for data centres by various industries. Such technology growth in data centres is leading to higher dependency of organizations, thus boosting its market growth.
Challenges – Colocation and Managed Hosting (CMH) market
High initial investment
Colocation hosting needs higher start-up cost than if renting servers from hosting companies. Budgeting becomes confusing with fluctuating monthly rents due to bandwidth. The costs of installing advanced devices may be very large for limited quantities. Thus cost factor plays matters a lot for the market growth.
Partnerships and acquisitions along with product launches are the key strategies adopted by the players in the Colocation and Managed Hosting (CMH) market. As of 2019, the market for Colocation and Managed Hosting (CMH) market is consolidated with the top players including IBM, Telecity Group, Telehouse, NTT, Rackspace, Digital Reality Trust, Terremark, Sabey Corp, Equinix, Deutsche Telekom, Colt, Level3 Communications and among others.
In February 2019, the U.S. government launched the Artificial Intelligence Initiative to accelerate AI initiatives in research and growth, expand exposure to government statistics and frameworks for the study, and train staff to respond to the AI age.
In March 2019, Cyxtera Technologies extended its data centre operations in Silicon Valley, Houston, Atlanta, New York City and Toronto, getting a gross business size of more than 2.9 million sq. Ho, Foot.
In August 2020, Megaport is growing alliance with Cloudflare to increase access to the network. Megaport has dedicated to delivering stable, on-demand Cloudflare access to customers. More precisely, on Megaport ‘s national software defined network (SDN), the Network as a Service (NaaS) company has confirmed direct connectivity to Cloudflare’s regional network for its subscribers. Such alliances contributes to the development of market growth.