Americas Data Center Colocation Market Outlook, 2019-2024 - Rising Use of Lithium-ion Batteries & Fuel Cells in Data Centers Presents Opportunities

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The increased merger and acquisition activities in the Canadian market and the investment in over 10 MW colocation facility development in Latin America are expected to have a positive effect on the Americas data center colocation market growth. Leading colocation markets in the US are experiencing 100% uptake in their colocation operations.

It is expected that more than 85% of colocation facilities in the US will be cloud-enabled at the end of the forecast period. Several organizations in Canada and Latin America are expected to shift to cloud-based service offerings, thereby increasing the demand for wholesale colocation. Hence, the rise in hybrid infrastructure services is projected to drive the Americas data center market.

The US data center colocation market has witnessed increased adoption of UPS power systems. Service providers are adopting UPS systems with lithium-ion batteries in N+1 and 2N configurations. Generators, transfer switches, and switchgears are also witnessing high acceptance in the US market. The diesel generator segment is also expected to grow in the next few years. However, the gas and bi-fuel generator segment is likely to witness steady growth due to the growing awareness of carbon emissions, especially in the US. DRUPS systems are expected to witness adoption in the US facilities during the forecast period. The adoption of switchgears is likely to grow because of the increased construction of large and mega facilities that require medium- and high-voltage switchgears.Site selection is a major criterion for data center operators. However, tax incentives and the availability of free cooling solutions are other key factors that play an important role in data center development. Many states provide investment and property tax, sales tax, and job-based tax incentives. In 2018, the Illinois government introduced a new capital spending plan, which includes exemption on sales tax for electrical equipment, including servers, cooling racks, and plumbing supplies.The market in Canada is witnessing the growth of Brownfield and Greenfield development projects. In Canada, around 25% of organizations have facilities that are older than 10 years. It is expected that brownfield developments in the country will continue to grow. Most facilities will be designed according to tier III standards, aiming to achieve the Uptime Institute certification and flexible designs.Several facilities, which are located in the extreme climate, have adopted free cooling techniques in North America. Service providers are equipping high-efficiency indirect evaporative cooling (IDEC) units with indirect airside economizers configured in N+1 redundancy. The use of chilled water-based systems is still prevalent among several facilities, which is aided in the adoption of innovative solutions for low power consumption. Besides, the adoption of direct liquid cooling and liquid immersion cooling solutions is also growing among operators in the US. The US facilities are also focusing on procuring renewable energy sources and high-efficient and energy-saving lightening equipment. A majority of facilities in Canada are developed with a PUE of less than 1.5. Several facilities operating in Canada use free-cooling techniques and water-based cooling solutions.The retail colocation market is likely to be driven by the increased demand for services from organizations, especially in Latin America. Retail services are highly suitable for those operators that require small computing services at a single site or multiple locations in the region. However, several existing retail service users are expected to opt for wholesale colocation capacities during the forecast period.

The adoption of wholesale colocation services is growing significantly in the US and Canada due to the increased demand for computing capacities from global enterprises, cloud providers, big data, and IoT organizations. With the increase in demand for cloud solutions among leading cloud service providers, the need for wholesale facility space is growing. The Latin America market is likely to witness the growth of wholesale services during the forecast period.

In 2018, Ascenty and Equinix were the largest investors in Brazil. The investment is expected to grow in Latin America during the forecast period with Ascenty planning to invest in other countries and telecommunication providers such as Telefonica and Entel aiming for facility expansion.

In 2018, Digital Realty and Brookefield Infrastructure acquired Ascenty. Digital Realty expanded its presence in Canada by investing in Toronto, Canada, and in Virginia, Texas, Illinois, New York, California, and Florida, US. Digital Realty and Equinix are leading operators in the region.

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Globe Newswire: 10:53 GMT Tuesday 3rd December 2019

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