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How are market drivers shaping the future growth trajectory of the colocation edge data center industry?
The increasing adoption of 5G networks is expected to propel the growth of the colocation edge data center market going forward. 5G network technology refers to the fifth generation of mobile network technology, which represents a significant advancement over its predecessors (2G, 3G, and 4G/LTE, or Long-Term Evolution). The adoption of 5G is driven by the need for faster data speeds, lower latency, and increased network capacity to support the growing demands of IoT, streaming services, and emerging technologies such as autonomous vehicles and smart cities. Colocation edge data centers enable the widespread adoption of 5G technology by delivering low-latency, high-performance computing resources at the network edge. These facilities enable edge computing, scalability, dependability, and IoT deployments, which provide the infrastructure needed to fully utilize 5G networks. For instance, in April 2023, according to 5G Americas, a US-based industry trade organization, there was a 76% growth in global 5G wireless connections from the end of 2021 to the end of 2022, reaching a total of 1.05 billion connections. Therefore, the increasing adoption of 5G networks is driving the growth of the colocation edge data center market.
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What is the estimated market size of the colocation edge data center sector by 2029, based on current forecasts?
The colocation edge data center market size has grown exponentially in recent years. It will grow from $9.88 billion in 2024 to $12.44 billion in 2025 at a compound annual growth rate (CAGR) of 26.0%. The growth in the historic period can be attributed to rising investment in digital transformation, rising use cases of cloud-based solutions, expansion of the IT and telecom industries, introduction of new data center facilities, and increase in utilization of online services.
The colocation edge data center market size is expected to see exponential growth in the next few years. It will grow to $31 billion in 2029 at a compound annual growth rate (CAGR) of 25.6%. The growth in the forecast period can be attributed to growing adoption of 5G networks, rising demand for edge data centers as a service, demand for advanced technologies, growing use of cloud services, and an and an increase in data centers and edge computing solutions. Major trends in the forecast period include need to improve data handling and customer services, use of edge solutions, innovation of hybrid cloud infrastructure, rising integration of cloud-based solutions, and implementation of advanced technologies in existing systems.
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#Who are the top players in the colocation edge data center market?
Major companies operating in the colocation edge data center market are Verizon Communications Inc., Dell Inc., Huawei Technologies Co. Ltd., NTT Communications Corporation, Hitachi Ltd., China Telecom Global Limited, International Business Machines Corporation, Cisco Systems Inc., KDDI Corporation, Schneider Electric SE, Fujitsu Limited, Hewlett Packard Enterprise Company, NVIDIA Corporation, NEC Corporation, Eaton Corporation PLC, Inventec Corporation, ASUSTeK Computer Inc., Singapore Telecommunications Limited, Equinix Inc., Vertiv Group Corporation, Super Micro Computer Inc., Digital Realty Trust Inc., Rackspace Inc., Arm Ltd., Inspur Co. Ltd., Arrcus Inc.
#What are the major trends in the colocation edge data center market?
Major companies operating in the colocation edge data center market are increasingly concentrating on developing advanced solutions tailored for specific applications, such as high-density colocation designed for AI workloads, to secure a competitive edge. High-density colocation for AI workloads provides specialized data center solutions that cater to the demanding computing and storage needs of artificial intelligence applications, utilizing scalable infrastructure and sophisticated power management. For instance, in October 2022, DCX, a US-based startup in the data center sector, launched as a new brand focused on high-density colocation for AI workloads. DCX aims to fulfill the advanced requirements of digital infrastructure. Their inaugural facility, DCX Goodyear 1, located in the Greater Phoenix area, is intended to support applications related to AI and machine learning (ML). Situated in Goodyear, a burgeoning data center hub in Phoenix, the facility operates on a six-acre campus with two online suites that can support up to six megawatts of power, with the potential for expansion to 12 megawatts. Each data suite offers between 700 kW and 1 megawatt of capacity and includes critical infrastructure features such as uninterruptible power supply (UPS) systems and waterless cooling systems.
Which geography holds the highest colocation edge data center market share?
North America was the largest region in the colocation edge data center market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the colocation edge data center market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.
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How do different segments contribute to the overall expansion of the colocation edge data center market?
The colocation edge data center market covered in this report is segmented –
1) By Type: Retail Colocation, Wholesale Colocation
2) By Application: Banking, Financial Services And Insurance (BFSI), Energy, Government And Defense, Healthcare, Information Technology And Telecom, Manufacturing, Retail, Other Applications
3) By End-Use: Small And Midsize Enterprise (SMEs), Large Enterprises
Subsegments:
1) By Retail Colocation: Single Rack Or Cabinet Leasing, Customized Space Solutions For Small To Medium Businesses, Managed Services With Colocation, Cloud Connectivity Solutions For Retail Colocation, Colocated Infrastructure For Enterprises And SMBs, Scalable And Flexible Rack Space Options
2) By Wholesale Colocation: Large-Scale Data Center Leasing, Dedicated Space For Large Enterprises And Service Providers, High-Density Colocation Solutions, Direct Connectivity To Cloud Providers, Customized Power, Cooling, And Rack Configurations, Cross-Connects And Interconnection Services For Wholesale Clients
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What defines the structure and scope of the colocation edge data center market?
A colocation edge data center typically refers to a facility that provides space, power, cooling, and physical security for businesses to deploy their server, storage, and networking equipment. These are strategically positioned at the periphery of a network, closer to where data is generated and consumed, such as in urban areas or near industrial sites. They are primarily used to provide organizations with a cost-effective and scalable solution for housing their IT infrastructure.
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