APAC colocation services market to reach $9.7 billion by 2024

Colocation services in the Asia–Pacific (APAC) region have experienced significant growth, with increased investment from global and local investors that cater to the enterprise data centre requirements. The colocation services market in the region is estimated to reach US$9.7 billion in 2024, according to GlobalData.

Sunil Kumar Verma, Lead ICT Analyst at GlobalData, noted that the growth of colocation services in the APAC region is drive by increased demand for data centres from social media platforms, global cloud providers, media content and video streaming services, e-commerce platforms and banking during the forecast period.

China and Japan will make up approximately 60% of the colocation services revenue in 2024, driven by strategic investments from leading vendors. For instance, in October 2019, Equinix set up a joint venture with Singapore investor GIC to invest over US$1 billion to build and operate hyperscale data centres in Japan.

Verma noted that the growing demand for storing huge volumes of data, coupled with improving efficiency across business operations, provides growth opportunities to colocation service providers.

“Digital business continues to redefine the interaction relationships between the service providers and end users with the engaged entities transacting either constantly or sporadically. Factors like digital innovations and technological advancements are augmenting the growth of data in various industries,” said Verma.

Increasing use of social media and smartphones, growing internet population, adoption of hybrid and public cloud services, and the need for enterprises to migrate from a server room environment to data centres are some of the factors contributing to the growth.

As a result, cloud workloads and data accessibility options should facilitate the shift between platforms, thereby providing the customers with a balance between cost and performance. Verma added that digital transformation initiatives across enterprises are likely to create demand for new IT infrastructure.

“Additionally, technical requirements to support maximum workload flexibility for provisioning additional IT infrastructure during peak period would further add to the growing demand for colocation services in future,” said Verma.

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