Data Center Hosting Services Market Intelligence

Industry Outlook & Drivers

Global Data Center Hosting Services Market Outlook

The data center co-location market is expected to reach $58.28 billion by 2025, driven by the growing adoption of cloud computing that enables enterprises to significantly lower their IT operational and infrastructural expenses.

North America is the largest adopter of co-location services. In addition Japan, China, and India would be leading countries in terms of number of data centers, driven by demand in IT, BFSI, telecom and social media sectors.

Data Sovereignty Laws

• In order to act on collection, usage, storage and transmission of data within data centres (e.g., HIPAA, HITECH in the US), data sovereignty is an important aspect for enterprises, as different countries have different standards.
• Enterprises can evaluate vendor capabilities to comply with specific country's standards and can also control the physical location of data to manage data sovereign issues better

IT Regulations & Standards

• IT systems and information security within data centres are crucial.
• In order to improve efficiency and effectiveness (e.g., Information & Security Management Standard ISO/IEC 27001), large enterprises should act in accordance with its risk appetite, internal policies and external regulations through the alignment of its strategy, processes, technology and people

Environmental Regulations

• Every country issues a list of standards and regulations to protect the environment and ensure safety of workers in data centres. Non-compliance to stated requirements will result in fines and in some scenarios managers can be held personally liable for violations (e.g., Environmental Protection Agency's Ozone Depleting Substance [ODS] rules)

Global Market Outlook –Data Centre Outsourcing

• The global data centre outsourcing market is expected to grow at a moderate pace and reach $105 billion by 2019, mainly driven by shrinking IT budgets, limited IT expertise and increasing operational overhead within enterprises
• Data centre co-location remains the top adopted segment in market
• In 2015, global data centre outsourcing market was worth $88 billion which is expected to grow at a CAGR of 4.5 % and reach $105 billion by 2019.
• Shrinking IT budgets, limited expertise, the growing need to reduce IT infrastructure expenses and increasing operational overheads will drive the outsourcing market globally.
• The market growth is also driven by a rapid increase in virtualised infrastructure and cloud computing.
• Changing business needs, increasing complexities of network architectures and fluctuating bandwidth are the potential challenges faced by end-users.