Power up: Rising business numbers and electricity costs will drive industry growth

The Colocation Facilities industry fared extremely well over the five years to 2017, as the continual move toward online operations caused an increase in demand for server space. Demand for storage and server power has risen substantially, and customers use colocation facilities as a way to store server equipment. The industry has experienced a supply shortage in recent years; colocation facilities are filling faster than operators can create space. In response, companies in the industry have increased prices, which has helped push up profit margins. Over the five years to 2022, industry revenue is projected to continue increasing, driven by an increasing number of businesses and rising electricity costs...purchase to read more.

Industry Statistics & Market Size
Annual Growth 12-17
Forecast Growth 17-22
Market Share of Companies

Industry Threats & Opportunities

  • The continual move toward online operations caused an increase in demand for server space
  • The industry has undergone a significant amount of merger and acquisition activity
  • Many data processing and hosting companies are expected to take advantage of colocation facilities
  • Industry Report - Industry Key Buyers Chapter

    Industry fragmentationThe three largest companies in the Colocation Facilities industry are expected to account for 13.5% of industry revenue in 2017, indicating a low level of market share concentration. Most industry operators are small regional companies, as primary downstream customers are typically small- to medium-size companies that demand limited server capacity. Although some major internet content providers, such as Google and Facebook, use this industry’s facilities, large customers typically only require industry facilities to provide data interconnection services. Large internet providers maintain proprietary server facilities...purchase to read more.

    Additional Insights for the Colocation Facilities Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Colocation Facilities Industry are

  • Ability to offer customized server solutions
  • Access to skilled server engineers
  • Access to high bandwidth
  • IBISWorld analysts also discuss how external factors such as Demand from data processing and hosting services and Number of businesses in the Colocation Facilities industry impact industry performance..

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    What's in this report

    What is the Colocation Facilities Industry?

    Industry operators own and operate data centers that primarily lease equipment space to customers. Companies in the industry also offer auxiliary services including power management, security and network neutrality. Customers generally use industry services as off-site data storage to back up their data or to enable them to focus on other parts of their business without paying for these operations.

    Industry Products
  • Single server space
  • Server rack
  • Server cage or suite
  • Auxiliary services
  • Industry Activities
  • Providing single server space
  • Providing a server rack
  • Providing a server cage or suite
  • Providing auxiliary services
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Demand from data processing and hosting services
  • Number of businesses
  • Percentage of services conducted online
  • Price of electric power
  • Private investment in computers and software
  • Price of computers and peripheral equipment

  • Current Performance
  • Powerful growth
  • Supply and demand
  • Competition
  • Chart: Revenue Growth

  • Industry Outlook
  • Greater growth
  • Profit and space
  • Table: Colocation Facilities Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Colocation Facilities Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Construction
  • Manufacturing
  • Information
  • Data Processing & Hosting Services
  • Healthcare and Social Assistance

  • Key Selling Industries
  • Commercial Leasing
  • Internet Service Providers
  • Power Conversion Equipment Manufacturing
  • Satellite Telecommunications Providers
  • Security Software Publishing

  • Products & Services
  • Single server space
  • Server rack
  • Auxiliary services
  • Server cage or suite
  • Chart: Colocation Facilities Industry Products and Services Segmentation

  • Demand Determinants
  • Number of businesses
  • Electricity prices
  • Data processing and hosting services providers

  • Major Markets
  • Services
  • Manufacturing
  • Healthcare
  • Retail and entertainment
  • Finance
  • Education
  • Transportation
  • Utilities
  • Chart: Major Market Segmentation for the Colocation Facilities Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitDepreciation and purchasesWagesRent and utilitiesMarketingOther
  • Chart: Cost Structure Benchmarking – Sector vs Colocation Facilities

  • Basis of Competition
    Service qualityService costs and breadth
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Colocation Facilities Industry

  • Industry Globalization
    Equinix Inc.,
  • Table: Equinix Inc. - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Colocation Facilities Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Colocation Facilities Industry
  • Industry Revenue (2008-2022)
  • Industry Gross Product (2008-2022)
  • Establishments (2008-2022)
  • Businesses (2008-2022)
  • Employment (2008-2022)
  • Wages (2008-2022)
  • Number of businesses (2008-2022)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Cloud Computing
  • The delivery of computing as a service rather than a product, whereby shared resources, software and information are provided to computers and other devices as a utility over the internet.
  • Kilowatt-Hour
  • A unit of energy equivalent to one kilowatt of power expended for one hour of time.
  • Redundancy
  • A backup or redundant power supply, typically in the form of generators, that ensures uninterrupted server access even when normal power supply is down.
  • What Our Customers Say

    Why buy this report?

    The Colocation Facilities industry market report contains data and analysis of the most influential current and future trends shaping the industry. IBISWorld’s in-depth industry market research is presented in a logical, user-friendly format, and provides growth and profit forecasts for a five-year outlook period.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Colocation Facilities:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Colocation Facilities market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Colocation Facilities, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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