Colocation and Managed Hosting Services Market in North America to grow at a CAGR of 14.09% during 2024-2028
The Colocation and Managed Hosting Services Market in North America is expected to grow at a CAGR of 14.09% during 2023 and 2028. During this period, the market is also expected to show a growth of USD 88.66 billion. In today's business landscape, data center consolidation is a strategic initiative driven by the imperative to minimize operational expenses. This trend is particularly prevalent among software companies, which are increasingly opting for a common cloud platform to eliminate the need for individual data centers. The adoption of storage virtualization is a key enabler in this regard, enabling enterprises to store and process information more efficiently by reducing the requirement for additional storage infrastructure. Virtualization has significantly altered the one-to-one relationship between storage and physical servers, leading to substantial cost savings and increased agility. As companies continue to seek ways to optimize their IT infrastructure, the demand for colocation and managed hosting services in North America is expected to grow.
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Technavio analysts predict that the BFSI subsegment will lead the End-user segment during 2024 and 2028 In the highly regulated banking and financial services industry (BFSI), safeguarding sensitive customer data and ensuring regulatory compliance are paramount. Colocation and managed hosting providers cater to these needs by offering advanced security measures and adhering to compliance protocols, such as those outlined in the General Data Protection Regulation (GDPR). The burgeoning growth of m-commerce and e-commerce in North America is driving the demand for these services, which enable BFSI companies to access interconnected infrastructures, minimize costs, and maintain a high level of network security and flexibility. Colocation facilities provide firewalls, encryption, intrusion detection, and physical security measures to protect financial data, ensuring the utmost security and reliability.
Here are the various ways based on which the market is segmented:
There are several factors that are causing the market to flourish increase in adoption of cloud-based storage services
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The colocation and managed hosting services market in North America is witnessing significant growth due to the increasing demand for dependable and secure solutions in the information technology industry. Colocation providers offer leasing space for businesses to house their hardware, networking gear, servers, and other IT infrastructure in secure data centers equipped with backup power sources, cooling systems, and surveillance cameras. Managed hosting agreements provide businesses with additional services such as security patches, remote monitoring, and technical support. These services ensure that hardware and software are up-to-date and functioning optimally. Security is a top priority, with biometric access restrictions, AI, and IoT devices integrated into data centers to prevent unauthorized access and ensure data protection. Regulated cloud providers offer colocation networks and cloud-based storage systems, enabling edge computing and reducing latency for IoT devices. Power supplies are critical, with redundant power sources ensuring uninterrupted operations. Data centers also offer advanced cooling systems to maintain optimal temperatures and ensure the longevity of IT equipment. Overall, the colocation and managed hosting services market in North America offers businesses secure and reliable solutions to meet their IT infrastructure needs, with the added benefits of advanced technologies such as AI, IoT, and edge computing.
According to Technavio, the colocation and managed hosting services market in North America are integral components of the global technology hardware, storage, and peripherals market, which encompasses the revenue generated from the sales of hardware devices, equipment, and components in the information technology sector. This market includes manufacturers of cellular phones, personal computers, servers, electronic computer components, peripherals, data storage components, motherboards, audio and video cards, monitors, keyboards, printers, and other related technology hardware. The growth of this market is primarily driven by the escalating demand for data centers, as a result of the increased adoption of work-from-home technologies due to the COVID-19 pandemic. Other key factors contributing to the market's expansion include the rising need for business continuity and disaster recovery solutions, and the growing preference for outsourcing IT infrastructure management to specialized service providers.
The Colocation and Managed Hosting Services Market in North America is experiencing significant growth, fueled by the increase in adoption of cloud-based storage services. Industries are leveraging the products belonging to the market for customer engagement, transactional notifications, and promotional offers.
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