Colocation services in the Asia-Pacific (APAC) region have witnessed significant growth with increased investment from global and local vendors that cater to the enterprise data center requirements. Amidst this backdrop, the colocation services market in the region is estimated to reach US$9.7bn in 2024, forecasts GlobalData, a leading data and analytics company.

Sunil Kumar Verma, Lead ICT Analyst at GlobalData, says: “The growth of colocation services in the region will be driven by increased demand for data centers from social media platforms, global cloud providers, media content and video streaming, e-commerce platforms and banking during the forecast period.”

China, along with Japan, will account for 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$1bn to build and operate hyper-scale data centers in Japan. Alibaba Cloud also announced an additional investment of CNY200bn for its data center infrastructure to address the growing demand for video conferencing and live-streaming.

Mr Verma continues: “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. The growing demand for storing huge volumes of data, coupled with improving efficiency across business operations, provides growth opportunities to colocation service providers.”

Increasing use of social media, penetration of 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 centers are some of the major factors contributing to the growth. As a result, cloud workloads and data accessibility options should be able to facilitate seamless shift between platforms, thereby providing the customers with an optimal balance between cost and performance.

Mr Verma concludes: “Digital transformation initiatives across the enterprises are bound 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.”