Global Data Centre Outsourcing Market Report and Forecast 2024-2032

Global Data Centre Outsourcing Market Outlook

The global data centre outsourcing market reached a value of almost USD 173.22 billion in 2023. The data centre outsourcing industry is further expected to grow at a CAGR of 5.10% between 2024 and 2032 to reach a value of almost USD 271.04 billion by 2032.   

The market is driven by the diminishing IT budgets, restricted IT proficiency, and growing operational overhead in the enterprises. North America and Europe are the high market maturity regions in the market, whereas the Asia Pacific and Latin America have medium market maturity.

The global data centre outsourcing industry is classified into co-location hosting and managed hosting. Data centre co-location continues to be the leading adopted sector in the market in the excessively regulated industries, followed by managed hosting services. Co-location hosting refers to the hosting where customers will rent/lease out data centre space from suppliers where physical space, security, power, and bandwidth are available easily, whereas managed hosting refers to the hosting where the customers will procure substantial hardware from the suppliers, and this is hosted at the provider's place. The supplier is accountable for maintenance and support services in the data centre.

Market Segmentation

Data centre outsourcing refers to an outsourced data centre supported by mainframes, servers, network equipment, and databases to work as a central repository for an enterprise.

On the basis of services, the data centre outsourcing industry is segmented into:

• Co-location

• Managed Hosting Services

• Others

The industry is bifurcated into retail and wholesale segments. By end-uses, the industry can be divided into:

• Small and Medium Businesses (SMBs)

• Large Businesses

The report also covers the regional markets of the product like North America, Europe, the Asia Pacific, Latin America, and the Middle East and Africa.

Market Analysis

The global data centre outsourcing market is driven by the rapid growth in the global co-location industry, a major component, which is expected to grow at a CAGR of 15.4% in the forecast period of 2024-2032. The major driving factors of the global co-location industry are diminished IT infrastructure expenditure, physical space, security, and high voltage requirement, along with the growing adoption rate of cloud-based storage services.

The Asia Pacific is a rapidly growing co-location industry; it holds up to 30-35% of the total global co-location facility distribution. The emerging economies in the Asia Pacific are expected to have increased enterprise co-location demand due to the high economic growth rate. North America is the leading co-location industry. Europe and the Middle East and Africa, meanwhile, share over a fifth of the global co-location industry. The major drivers in these regions are business constraints on the IT budgets and heightened adoption of cloud services. The stringent data sovereignty laws pose the only disadvantage in Europe and the Middle East and Africa for the industry. The merging and acquisition of smaller companies by the large vendors for consolidating their position in the emerging and domestic markets are rising, furthering the global data centre outsourcing market.

Data sovereignty is an essential aspect for enterprises as it aids the institutions to act on the collection, storage, usage, and transmission of data within data centres (e.g., HIPAA, HITECH in the US), while being aware of the standards changes in different countries. Data centre outsourcing makes sure of the demands of these enterprises, thus, further propelling the industry forward. The flexible plans offered by the co-location and managed hosting vendors are structured to suit every organization's needs. The flexibility of enterprises to choose according to their criticality of the applications and technical specifications of the device is further aiding the market growth for data centre outsourcing. Although the performance of devices is outsourced according to the managed hosting model, the enterprises do not have to bother themselves with computing performance or latency, thus, enhancing the market further.

There is zero downtime for the enterprises as the hosting vendors ensure that the servers, platforms, and network infrastructure are constantly under scrutiny, hence always monitored. Moreover, hiring and training an in-house team for data centre management will likely be expensive for the enterprise, further driving the demand for data centre outsourcing market. Hosting vendors ensures data safety and back up, even on technical failure or natural disasters. On the global level, these vendors have the capacity for securing data and making sure they comply with the security guidelines and regulations followed in that region or the industry, providing impetus to the global data centre outsourcing market.

Competitive Landscape

The report gives a detailed analysis of the following key players in the global data outsourcing market, covering their competitive landscape, capacity, and latest developments like mergers, acquisitions, and investments, expansions of capacity, and plant turnarounds:

• Equinix, Inc.

• RACKSPACE US, INC.

• IBM Corporation

• Fidelity National Information Services, Inc

• CenturyLink

• NTT Communications Corporation

• Others

The comprehensive EMR report provides an in-depth assessment of the industry based on Porter's five forces model, along with giving a SWOT analysis.

Key Highlights of the Report