Data Center Colocation Market in Americas - Industry Outlook & Forecast 2022-2027

Data Center Colocation Market in Americas - Industry Outlook & Forecast 2022-2027

The Americas data center colocation market is expected to grow at a CAGR of 5.34% during 2021-2027.

MARKET OUTLOOK

The growth in the market is driven by the deployment and advancement of 5G, growth in the application of Artificial Intelligence, Smart city development, renewable energy procurement, adoption of IoT, and Big data.

Some colocation data centers are developing wholesale colocation space in their facilities across several countries to support growing colocation demand from cloud service providers such as Microsoft, Oracle, IBM, Google, Huawei, AWS, and government entities. The computing power in the facilities has grown significantly due to increased demand for cloud services, big data, and IoT, which has increased rack power density. The increased data bandwidth and high-performance computing will drive the operators to procure efficient infrastructure to manage any downtime in the facilities.

COVID-19 has been a boon across the Americas data center colocation market, accelerating digital transformation initiatives across the region, increasing facilities service demand, and capacity utilization among colocation facilities are significant factors.

Governments across the region are aiding the growth in the construction of centers by offering several tax benefits. Arizona, Georgia, Indiana, Nevada, Minnesota, Ohio, Oregon, Tennessee, Texas, Utah, Virginia, and Washington DC are some U.S. states that provide tax incentives for facilities construction, infrastructure purchase, and power procurement by data centers. Latin American countries such as Brazil, Colombia, Argentina, and Chile provide tax invective for centers development, digital services providers, and infrastructure procurement.

KEY TRENDS IN THE MARKET

Deployment of 5G Drives Edge Data Center Investments

• The rapid investment in 5G technology and its deployment will increase the number of connected devices, leading to the generation of a substantial amount of data, further increasing investments in edge data centers across regions for low latency and ease of accessibility to data device-to-device communications. American Countries have deployed 5G network services, and some are on a 5G trial basis. AT&T, T-Mobile, CenturyLink, TELUS, Rogers Communications, Bell, SaskTel, Nokia, SubTel, Alvis, Claro, Antel, Entel, and Ericsson are some of the companies which are involved in the deployment of the 5G network services across the region.
• In the Americas, countries such as the U.S., Canada, Chile, and Uruguay have commercially deployed 5G network services. Additionally, Brazil, Colombia, Argentina, Mexico, Peru, and other Latin American countries are in the stage of 5G planning, trials, and yet-to-deploy commercial services during the forecast period.

Innovative Technologies

• Smart Grid UPS is a data center innovation in power infrastructure. It is a UPS facility that works as bidirectional power converters. The smart grid UPS facilitates efficient power control and provides power backup per the facilities' requirements. Diesel generators are replaced by Hydrotreated Vegetable Oil (HVO), the oil which is synthesized from vegetable oils. HVO is 25% costlier than regular diesel. This HVO fuel generates less carbon emission (reduced by 90%) compared to regular diesel.
• The centers' cooling infrastructure innovations include direct-to-chip cooling, liquid emersion cooling, and water-free cooling. Underwater facilities, Micro facilities, floating facilities, and edge data centers are some innovations in the center's design. The vendors are developing sustainable cooling techniques the vendors like Nautilus Technologies and Infinidium power developed cooling techniques like water-free cooling, floating centers, and the Vortex vacuum chamber, which generate power from the waste heat generated from the facilities.

SEGMENTATION ANALYSIS

1. The Americas data center colocation market witnessed the adoption of innovative power infrastructure equipment like the Nickel Zinc UPS, Lithium-ion UPS, Prussian Blue Sodium ion UPS, Smart grid UPS, and HVO fuel generated in the centers.

2. Most edge facility deployment will include single-phase lithium-ion UPS and monitored and switched PDUs. Therefore, the emergence of edge facilities will majorly boost market growth.

3. Data centers invest more in power infrastructure with a minimum of N+1 redundancy. Most centers are installed with N+N or 2N redundancy for power infrastructure with more redundancy for UPS and generator systems.

4. In North America, the U.S. and Canada majorly rely on free and air-based cooling systems, as these two countries mostly experience colder temperatures compared to Latin American countries. In Latin America, water-based cooling systems are majorly used; some parts of the Latin American countries adopt air-based cooling systems due to the peak winters.

5. AECOM, Aceco TI, DPR Construction, Arup, Tuner & Townsend, RED, Constructora Sudamericana, Fluor Corporation, First Gulf, Holder Construction, Salute Mission Critical, Jacobs, Quark, and ZFB Group are some construction contractors building facilities in the Americas.

Segmentation by Colocation Service

• Retail Colocation
• Wholesale Colocation

Segmentation by Infrastructure

• Electrical Infrastructure
• Mechanical Infrastructure
• General Construction

Segmentation by Electrical Infrastructure

• UPS Systems
• Generators
• Transfer Switches & Switchgear
• Power Distribution Units
• Other Electrical Infrastructure

Segmentation by Mechanical Infrastructure

• Cooling Systems
• Racks
• Other Mechanical Infrastructure

Segmentation by Cooling Systems

• CRAC & CRAH Units
• Chiller Units
• Cooling Towers, Condensers & Dry Coolers
• Economizers & Evaporative Coolers
• Other Cooling Units

Segmentation by Cooling Technique

• Air-based Cooling Technique
• Liquid-Based Cooling Technique

Segmentation by General Construction

• Core & Shell Development
• Installation & Commissioning Services
• Engineering & Building Design
• Fire Detection & Suppression
• Physical Security
• DCIM/BMS

Segmentation by Tier Standard

• Tier I & Tier II
• Tier III
• Tier IV

GEOGRAPHICAL ANALYSIS

The North American data center market leads growth in the overall industry, with early availability and adoption of innovative technology and investments from colocation service providers, hyperscale operators, enterprises, and government agencies.

Investments in North America are driven by the availability of land, governmental support, data protection laws, and tax incentives by the state governments. In North America, the U.S. dominates the Americas data center colocation market, followed by Canada, with increased investments from colocation providers, hyperscale data center operators, enterprises, and government agencies in data center facilities, adopting redundant power backup infrastructure. Northern Virginia, Georgia, California, Texas, Arizona, Ontario, Montreal, Toronto, and Richmond are favorable destinations for investors in North America.

In Latin America, countries like Brazil are witnessing the rapid adoption of renewable energy, which leads to the growth of the facilities; in Mexico and other Latin American countries, the demand for centers was driven by the growth of the gaming industry and the special economic zones.

Segmentation by Region

• North America

U.S.

Canada

• Latin America

Brazil

Mexico

Chile

Columbia

Other Latin American Countries

VENDORS LANDSCAPE

The Americas data center colocation market key investors include Equinix, Digital Realty, CoreSite, Switch, ODATA, Cyxtera, HostDime, STACK Infrastructure, and Cologix. In 2021, STACK Infrastructure, Switch, and Cologix were the significant contributors to the power capacity added in the Americas data center colocation market. CoreSite, DataBank, and Switch are investing in more than ten center facilities in the Americas.

In terms of colocation, investment was led by Digital Realty in 2021, with a market share of around 21.3%. Digital Realty, the prominent colocation service provider in the Americas, followed Switch with a market share of approximately 8.1% in investments. The company invested in the development of around four data centers in Dallas, two in Ashburn, and four data centers in Ontario.

Acquisitions play a vital role in the Americas data center colocation market. The significant acquisitions in the industry include:

• KKR and Global Infrastructure group acquired CyrusOne
• Digital Realty and IFM acquired Switch,

American Tower acquired CoreSite

• Blackstone acquired QTS Realty Trust
• Equinix acquired Entel (4 data centers)

Prominent Colocation Investors

• CyrusOne
• Digital Realty
• Equinix
• GTD Perú
• HostDime
• IPXON Networks
• Lumen Technologies
• NTT Global Data Centers
• OData
• QTS Reality Trust
• Scala Data Centers
• Switch
• Vantage Data Centers

Other Prominent Vendors

• 365 Data Centers
• Aligned
• American Tower
• Ava Telecom
• CloudHQ
• Cologix
• Compass Datacenters
• COPT Data Center Solutions
• CoreSite
• Cyxtera Technologies
• DartPoints
• DC BLOX
• EdgeCore Internet Real Estate
• EdgePresence
• Element Critical
• eStruxture Data Centers
• fifteenfortyseven Critical Systems Realty (1547)
• Flexential
• GIGA Data Centers
• InterNexa
• Iron Mountain
• Millicom
• Prime Data Centers
• Quântico Data Center
• Sabey Data Centers
• Skybox Datacenters
• STACK Infrastructure
• Stream Data Centers
• T5 Data Centers
• Telmex
• Urbacon Data Centre Solutions
• Vapor IO

New Entrants

• AUBix
• Cirrus Data Services
• DāSTOR
• Eastlink
• EdgeX Data Centers
• Enovum Data Centers
• Gatineau Data Hub
• Intermarket Properties
• Novva
• PointOne
• QScale
• Quantum Loophole
• Yondr

KEY QUESTIONS ANSWERED

1. How big is the Americas data center colocation market?

2. What is the growth rate of the Americas data center colocation market?

3. What is the expected Americas data center colocation market size by 2027?

4. Who are prominent vendors in the Americas data center colocation market?

5. What are the factors driving the Americas data center colocation market?