The South America Data Center Market Report is Segmented by Data Center Size (Large, Massive, Medium, Mega, and Small), Tier Standard(Tier 1 and 2, Tier 3, and Tier 4), Data Center Type (Hyperscale/Self-Built, and Enterprise/Edge, and Colocation), End User Industry (BFSI, IT and ITES, E-Commerce, Media and Entertainment, and More), and Country (Brazil and More). The Market Forecasts are Provided in Terms of IT Load Capacity (MW).

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Data Center Colocation Market Size 2025-2029

The data center colocation market size is valued to increase USD 78.56 billion, at a CAGR of 15.2% from 2024 to 2029. Rising demand for data center colocation facilities will drive the data center colocation market.

Major Market Trends & Insights

North America dominated the market and accounted for a 32% growth during the forecast period.
By Type - Retail colocation segment was valued at USD 19.81 billion in 2023
By End-user - Small and medium sized enterprises segment accounted for the largest market revenue share in 2023

Market Size & Forecast

Market Opportunities: USD 299.25 billion
Market Future Opportunities: USD 78562.90 billion
CAGR : 15.2%
North America: Largest market in 2023

Market Summary

The market is a continually evolving landscape shaped by advancements in core technologies and applications. With the increasing reliance on cloud computing and the Internet of Things (IoT), the demand for data center colocation facilities has surged. According to a recent study, the global colocation market is expected to account for over 40% of the total data center market by 2025. Innovative approaches for cooling colocation services have gained significant traction, with liquid cooling and containerized data centers emerging as popular solutions. These advancements address the challenges of managing increasing power densities and maintaining optimal operating temperatures. Moreover, regulatory compliance and security concerns continue to influence market dynamics, driving demand for robust and secure colocation services.
As businesses seek to optimize their IT infrastructure and reduce operational costs, the market for colocation services is poised for continued growth. By offering flexible, scalable, and cost-effective solutions, colocation providers are meeting the evolving needs of businesses across various industries.

What will be the Size of the Data Center Colocation Market during the forecast period?

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How is the Data Center Colocation Market Segmented and what are the key trends of market segmentation?

The data center colocation industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

Type

  Retail colocation
  Wholesale colocation


End-user

  Small and medium sized enterprises
  Large enterprises


Geography

  North America

    US
    Canada


  Europe

    France
    Germany
    Italy
    UK


  APAC

    China
    India
    Japan


  South America

    Brazil


  Rest of World (ROW)

By Type Insights

The retail colocation segment is estimated to witness significant growth during the forecast period.

In the dynamic and evolving data center landscape, retail colocation has emerged as a popular choice for businesses seeking cost savings and improved operational efficiency. This market trend is driven by the increasing adoption of retail colocation data centers by Small and Medium Enterprises (SMEs), who are looking to reduce both capital expenditure (CAPEX) and operational expenditure (OPEX) by renting space for their IT infrastructure in large data centers. The retail colocation market is witnessing significant growth as businesses opt for this solution to avoid the high costs associated with owning and maintaining traditional in-house data centers. According to recent studies, retail colocation adoption has risen by 18%, and the market is projected to expand further, with expectations of a 25% increase in industry growth in the upcoming years.

Power distribution units, uninterruptible power supplies, and redundant power systems are essential components of retail colocation facilities, ensuring reliable and uninterrupted power supply. Virtualization technologies, network infrastructure design, and physical security systems are other key elements that contribute to the overall efficiency and security of these data centers. Colocation facility selection, facility management practices, and uptime service level agreements (SLAs) are crucial factors that businesses consider when choosing a retail colocation provider. Power usage effectiveness, cooling system efficiency, and rack space utilization are essential aspects of operational efficiency improvements. Compliance regulations adherence, such as HIPAA, SOC 2, and PCI DSS, is a significant concern for businesses in various sectors, making it essential for retail colocation providers to offer robust security access control, environmental monitoring, and disaster recovery planning.

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The Retail colocation segment was valued at USD 19.81 billion in 2019 and showed a gradual increase during the forecast period.

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South America Data Center Networking Market is Segmented by Component (Product and Services), End User( IT and Telecommunications, Banking, Financial Services and Insurance (BFSI), Government and Defense and More), Data Center Type (Colocation, Hyperscalers/Cloud Service Providers, Edge/Micro Data Centers), by Bandwidth (≤10 GbE, 25–40 GbE and More) and by Country. The Market Forecasts are Provided in Terms of Value (USD).

Discover the booming South American data center market! This comprehensive analysis reveals key trends, growth drivers, challenges, and forecasts (2025-2033), covering hyperscale, colocation, and regional variations. Learn about leading companies and investment opportunities. Recent developments include: November 2022: Ascenty will invest R$1.5 billion (US$290 million) in the construction of five new data centers in South America. The locations of the data centers will be Brazil, Chile, and Colombia.October 2022: In So Paulo, Brazil, Equinix opened a brand-new hyperscale data center. The new SP5x facility, which is situated in Santana de Parnaba close to the organization's SP3 IBX data center, has a capacity of roughly 5MW in its initial phase. After all, phases are finished, the data center should have a total capacity of 14.4MW. According to the business, it plans to spend a total of $116.4 million on the facility.August 2022: In Brazil's So Paulo, Scala Data Centers has opened a new data center. At the business' Tamboré campus in So Paulo's Barueri neighborhood, SP4 is now operational. With 6MW of IT power capacity in use, the site is operational in its initial stage. The second stage of SP4 is anticipated to begin operations in September, adding 6MW of IT capacity.. Notable trends are: OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT.

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Data Center Construction Market Size 2025-2029

The data center construction market size is valued to increase USD 41 billion, at a CAGR of 8.8% from 2024 to 2029. Rising demand for data center colocation facilities will drive the data center construction market.

Major Market Trends & Insights

Europe dominated the market and accounted for a 32% growth during the forecast period.
By Application - Enterprise segment was valued at USD 23.20 billion in 2023
By Type - Electrical construction segment accounted for the largest market revenue share in 2023

Market Size & Forecast

Market Opportunities: USD 70.71 billion
Market Future Opportunities: USD 41.00 billion
CAGR : 8.8%
Europe: Largest market in 2023

Market Summary

The market is a dynamic and continuously evolving sector, driven by the rising demand for colocation facilities and the growing focus on constructing energy-efficient, or 'green,' data centers. According to recent reports, the global data center colocation market is projected to reach a 35% market share by 2025, underscoring its significant growth potential. However, the industry faces challenges such as high power consumption, which accounts for approximately 2% of global electricity use. To address this issue, there is a push towards adopting advanced core technologies, including renewable energy sources and energy-efficient cooling systems.
Additionally, regulatory compliance and regional variations add complexity to the market landscape. For instance, European data centers must adhere to strict energy efficiency regulations, while the Asia Pacific region is witnessing significant growth due to increasing digital transformation initiatives.

What will be the Size of the Data Center Construction Market during the forecast period?

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How is the Data Center Construction Market Segmented and what are the key trends of market segmentation?

The data center construction industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

Application

  Enterprise
  Cloud
  Colocation
  Hyperscale


Type

  Electrical construction
  Mechanical construction
  General construction


Geography

  North America

    US
    Canada


  Europe

    France
    Germany
    Italy
    UK


  APAC

    China
    Japan
    South Korea


  South America

    Brazil


  Rest of World (ROW)

By Application Insights

The enterprise segment is estimated to witness significant growth during the forecast period.

In today's digital economy, the demand for robust data center infrastructure continues to escalate as businesses and consumers generate an unprecedented volume of structured and unstructured data. Approximately 60% of enterprises worldwide are reported to have increased their data center capacity in the last three years, while 40% plan to do so in the next two years. The need for high-performance computing systems has become crucial to support the extensive transformation of existing data center infrastructure, including network, cooling, and storage. Environmental monitoring, redundancy and failover, HVAC infrastructure design, security access control, risk assessment mitigation, generator backup power, IT infrastructure deployment, structural engineering design, remote hands support, project timeline management, server rack density, capacity planning strategies, raised floor systems, permitting and approvals, mechanical system design, physical security measures, construction cost estimation, disaster recovery planning, cable management strategies, network infrastructure cabling, building automation systems, power usage effectiveness, critical infrastructure design, precision cooling systems, thermal management solutions, sustainability certifications, electrical system design, energy efficiency metrics, fire suppression systems, uninterruptible power supply, power distribution units, and building code compliance are all integral components of modern data centers.

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The Enterprise segment was valued at USD 23.20 billion in 2019 and showed a gradual increase during the forecast period.

As businesses continue to prioritize digital transformation, the market is expected to witness significant growth. According to recent estimates, the market is projected to expand by 18% in the upcoming year, with a further 21% increase anticipated within the next five years. These figures underscore the continuous evolution and expansion of the data center industry, driven by the increasing demand for scalable and efficient infrastructure solutions.

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Regional Analysis

Europe is estimated to contribute 32% to the growth of the global marke

South America Data Center Construction Market is Segmented by Tier Type (Tier 1 and 2, Tier 3 and Tier 4), Data Center Type(Colocation, Self-Built Hyperscalers (CSPs), Enterprise, and Edge), and Infrastructure (Electrical Infrastructure, Mechanical Infrastructure). The Market Forecasts are Provided in Terms of Value (USD).

South America Data Center Server Market size was valued at USD 2.9 Billion in 2024 and is projected to reach USD 6.3 Billion by 2032, growing at a CAGR of 10.1% during the forecast period 2026-2032.

South America Data Center Server Market Drivers

1. Cloud adoption and digital transformation

The need for scalable and effective data center infrastructure is being driven by the growing use of digital technologies like cloud computing, big data analytics, IoT, and AI. To meet their processing, storage, and security needs, businesses in a variety of industries, including banking, healthcare, retail, and communication, are investing in data centers. ​

1. Local Data Regulations and Government Policies

The region's governments are putting regulations into place to encourage the growth of data center infrastructure. For example, Argentina's advantageous tax incentives for data center operators and Brazil's efforts to improve digital infrastructure are drawing in data center investments.

South America Data Center Networking market size is currently experiencing a steady increase, characterized by notable growth rates over the past several years. Projections suggest that substantial growth will occur throughout the forecast period of 2026 to 2032.

Key Market Drivers:

Cloud Adoption: The demand for cloud computing services is projected to rise due to increasing digital transformation initiatives across enterprises. Hybrid and multi-cloud strategies are being prioritized to enhance scalability, flexibility, and operational efficiency.

Internet Penetration: The expansion of broadband infrastructure is anticipated to drive the need for high-performance data center networking solutions. A surge in mobile and IoT device usage is being observed, leading to higher data traffic and storage requirements. In 2020, mobile technologies and services represented 7.1% of Latin America's GDP, generating more than USD 340 Billion for the region's economy.

The Asia-Pacific region's data center colocation market size in 2022 was approximately **** billion U.S. dollars. By 2026, the region's data center colocation market was forecasted to reach **** billion U.S. dollars in size, reflecting a compound annual growth rate of ** percent between 2022 and 2026.

The Latin America Data Center Construction Market is Segmented by Infrastructure (Electrical Infrastructure, Mechanical Infrastructure, and More), Tier Standard (Tier I and II, Tier III, and More), End User (Banking Financial Services & Insurance, IT & Telecommunications, and More), Data Center Type (Colocation, Hyperscale, and More), and Geography (Brazil, Mexico, and More). Forecasts are in USD.

Latin America Data Center Construction Market size was valued at USD 12.35 Billion in 2024 and is projected to reach USD 21.79 Billion by 2032, growing at a CAGR of 7.36% from 2026 to 2032.Key Market DriversDigital Transformation Acceleration: Latin America's rapid digital transformation is driving data center expansion, with digital activities accelerating by 30% since 2020 and firms boosting technology spending by 65% to support cloud migration and digital operations. Between 2022 and 2024, data traffic in Brazil increased by 40% per year, illustrating the growing necessity for scalable, high-performance infrastructure. This growth is being driven by rising cloud use, the demand for reliable data storage, and an increased reliance on digital services across industries.Cloud Computing Adoption: The rapid adoption of cloud computing is driving data center growth in Latin America, with cloud service adoption increasing at a 27.5% annual rate since 2021 and public cloud spending estimated to reach $16.8 billion in 2025. In Mexico, more than 76% of businesses have moved to the cloud, increasing demand for local data center capacity. This expansion is being driven by the need for scalable infrastructure, enhanced data security, and lower IT costs as businesses migrate to cloud-based solutions for efficiency and digital competitiveness.Expanding Internet Penetration: Rising internet penetration in Latin America is propelling data center growth, with regional connectivity rising from 68.6% to 76.8% between 2020 and 2024. Since 2022, mobile broadband in Argentina has grown by 28% each year, while data traffic in Peru increased by 53% in 2023, illustrating the growing need for data storage and processing infrastructure. This need is being driven by the growth of digital services, raised increased mobile usage, and the need for more rapid and more dependable network capabilities to accommodate an increasingly connected population.

In 2021, Equinix held approximately ** percent of the market share of data centers. In total, the fifteen largest data center colocation providers own roughly **** of the market, which amounts to ** billion U.S. dollars in total. Data centers are facilities that centralize an organization's information technology equipment and operations.

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Retail Colocation Market Size 2024-2028

The retail colocation market size is forecast to increase by USD 45.86 billion at a CAGR of 18.5% between 2023 and 2028.

The market is experiencing significant growth due to increasing demand for retail colocation facilities. This trend is driven by the rising adoption of software-defined data centers and the deployment of mini data centers to support the growing digital transformation in various industries. 
Retailers are recognizing the benefits of colocating their managed IT infrastructure in third-party data centers, which provides them with cost savings, improved operational efficiency, and enhanced security. Additionally, the use of edge computing and the increasing importance of data privacy are also fueling the growth of the market. Overall, these factors are expected to continue driving market growth In the coming years.

What will be the Size of the Retail Colocation Market During the Forecast Period?

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The market refers to the provision of data center space and computing resources to businesses and IT startups, allowing them to house and manage their own servers and IT infrastructure alongside those of other organizations. This model contrasts with wholesale colocation, where an entire data center is leased out to a single tenant. 
Retail colocation enables businesses to reduce capital expenditures on building and maintaining their own data centers, while benefiting from enhanced security, reliable connectivity, and uptime service-level agreements (SLAs). Key trends In the market include the increasing adoption of cloud services, the proliferation of the Internet of Things (IoT) and advanced technologies such as autonomous vehicles and 5G technology, and the growing demand for energy-efficient, high-density processing and green data center solutions.
Retail colocation data centers offer global interconnection and advanced cooling solutions, ensuring optimal performance and reliability for business applications and IT infrastructure. With a focus on intelligent power management and 24/7 support, these facilities enable businesses to effectively manage their colocation budget while maintaining the highest levels of network connectivity and SLAs.

How is this Retail Colocation Industry segmented and which is the largest segment?

The retail colocation industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.

End-user

  SMEs
  Large enterprises


Industry Application

  IT and telecom
  Healthcare
  Retail and e-commerce
  Energy and utility
  Others


Geography

  North America

    Canada
    US


  APAC

    China


  Europe

    Germany
    UK


  Middle East and Africa



  South America

By End-user Insights

The smes segment is estimated to witness significant growth during the forecast period.

Retail colocation services in small and medium-sized data centers have gained significant traction due to their reliability and flexibility. Unlike large data centers, which rely on extensive redundant configurations, small and medium-sized data centers prioritize device reliability. This demand for dependable infrastructure necessitates continuous upgrades and advancements, driving the need for retail colocation services. These services enable small and medium-sized data centers to improve operational efficiency, enhance productivity, and ensure energy savings through redundancy and flexibility. Additionally, retail colocation provides access to advanced computing resources, cloud technologies, and IoT integration, making it an essential component of digital transformation for businesses.

Security, connectivity, and uptime service-level agreements (SLAs) are crucial considerations for retail colocation, ensuring data protection and seamless network operations. Global interconnection and edge computing applications further expand the reach and capabilities of small and medium-sized data centers. Cost-effective and energy-efficient solutions are also essential for start-ups and IT ecosystems, making retail colocation an attractive option for businesses seeking scalable and reliable IT infrastructure solutions.

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The SMEs segment was valued at USD 9.44 billion in 2018 and showed a gradual increase during the forecast period.

Regional Analysis

North America is estimated to contribute 32% to the growth of the global market during the forecast period.

Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

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The ma

The size of the US Multi-Tenant (Colocation) Data Center market was valued at USD XX Million in 2023 and is projected to reach USD XXX Million by 2032, with an expected CAGR of 10.89% during the forecast period. Recent developments include: In September 2023, A Full-Stack Cloud Service Provider, Expedient, partnered with Kyndryl, the world's largest IT infrastructure services provider. Through this collaboration, Expedient's robust data center colocation and cloud infrastructure will enhance Kyndryl's industry-leading cyber resilience offerings to customers. This partnership will enable Expedient and Kyndryl to extend the reach and effectiveness of security and cyber resilience services to a broader range of customers, helping organizations across various industries strengthen and fortify their cybersecurity posture while mitigating the risks associated with data breaches., In July 2023, Ubiquity, a digital infrastructure investor, announced the acquisition of edgepresence, a pioneer in the build-to-suit edge data center industry, delivering turnkey, localized, and scalable network compute solutions for carriers and data hyperscalers. Edgepresence's Edge Data Centers (EDCs) are modular, purpose-built data centers efficiently designed to include critical power, monitoring, physical security, and cooling. Complementing Ubiquity's existing digital infrastructure, EDCs enable far-edge functions, minimizing latency and improving performance for network tenants in a highly secure facility that can be deployed in weeks.. Key drivers for this market are: Growing Adoption of Cloud Services is expected to flourish the market, Increasing Growth in Wholesale Datacenter Multi-tenant Spaces to propel demand (albeit from a lower base); Increased Emphasis on Compliance with Data Regulations and Cost-Effective Nature of Multi-tenant Facilities to Drive Adoption among SME's. Potential restraints include: Dependence on Regulatory Landscape & Stringent Security Requirements. Notable trends are: Healthcare Sector Accounts for Significant Share.

The size of the US Data Center Industry market was valued at USD XX Million in 2023 and is projected to reach USD XXX Million by 2032, with an expected CAGR of 6.00% during the forecast period. Recent developments include: February 2023: The expansion of Souther Telecom to its data center in Atlanta, Georgia, at 345 Courtland Street, was announced by H5 Data Centers, a colocation and wholesale data center operator. One of the top communication service providers in the southeast is Southern Telecom. Customers in Alabama, Georgia, Florida, and Mississippi will receive better service due to the expansion of this low-latency fiber optic network.December 2022: DigitalBridge Group, Inc. and IFM Investors announced completing their previously announced transaction in which funds affiliated with the investment management platform of DigitalBridge and an affiliate of IFM Investors acquired all outstanding common shares of Switch, Inc. for USD approximately USD 11 billion, including the repayment of outstanding debt.October 2022: Three additional data centers in Charlotte, Nashville, and Louisville have been made available to Flexential's cloud customers, according to the supplier of data center colocation, cloud computing, and connectivity. By the end of the year, clients will have access to more than 220MW of hybrid IT capacity spread across 40 data centers in 19 markets, which is well aligned with Flexential's 2022 ambition to add 33MW of new, sustainable data center development projects.. Key drivers for this market are: , High Mobile penetration, Low Tariff, and Mature Regulatory Authority; Successful Privatization and Liberalization Initiatives. Potential restraints include: , Difficulties in Customization According to Business Needs. Notable trends are: OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT.

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Data Center Colocation And Managed Hosting Services Market Size 2025-2029

The data center colocation and managed hosting services market size is valued to increase USD 306.2 billion, at a CAGR of 18.5% from 2024 to 2029. Rising demand for data center colocation facilities will drive the data center colocation and managed hosting services market.

Major Market Trends & Insights

North America dominated the market and accounted for a 45% growth during the forecast period.
By End-user - BFSI segment was valued at USD 40.80 billion in 2023
By Type - Colocation Services (Wholesale and Retail) segment accounted for the largest market revenue share in 2023

Market Size & Forecast

Market Opportunities: USD 318.02 billion
Market Future Opportunities: USD 306.20 billion
CAGR from 2024 to 2029 : 18.5%

Market Summary

The market represents a dynamic and continuously evolving landscape, driven by the increasing demand for reliable and secure IT infrastructure solutions. With businesses increasingly relying on digital transformation and cloud computing, the market for data center colocation and managed hosting services is experiencing significant growth. According to recent reports, the colocation market is projected to account for over 30% of the global data center market by 2025. Core technologies and applications, such as artificial intelligence and machine learning, are driving the need for more advanced and powerful data center solutions. Service types, including managed hosting and hybrid cloud services, are gaining popularity due to their flexibility and scalability. However, challenges such as high power consumption in data centers and the need for regulatory compliance continue to pose significant hurdles. Despite these challenges, the market presents numerous opportunities for growth, particularly in emerging regions such as Asia Pacific and the Middle East. For instance, growing investments in hyper-scale data centers by colocation providers in these regions are expected to fuel market expansion. Overall, the market is poised for continued growth and innovation, offering significant opportunities for businesses and investors alike.

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How is the Data Center Colocation And Managed Hosting Services Market Segmented ?

The data center colocation and managed hosting services industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments. End-userBFSIHealthcareE-commerceTelecommunicationOthersTypeColocation Services (Wholesale and Retail)Managed Hosting ServicesEnterprise SizeSmall and Medium Enterprises (SMEs)Large EnterprisesGeographyNorth AmericaUSCanadaEuropeFranceGermanyItalySpainUKAPACChinaIndiaJapanSouth AmericaBrazilRest of World (ROW)

By End-user Insights

The bfsi segment is estimated to witness significant growth during the forecast period.

In the dynamic and ever-evolving the market, businesses seek reliable solutions for their IT infrastructure management. Providers offer various services such as server colocation, managed hosting, and cloud connectivity. These solutions include virtual machine management, network traffic analysis, and system performance optimization. Network connectivity options range from redundant power systems and bandwidth allocation methods to environmental monitoring systems and software-defined networking. Capacity planning strategies ensure high-availability clusters, power usage effectiveness, and cooling system efficiency. Compliance certifications, such as those for data center infrastructure, IP address management, and network security appliances, are crucial for businesses. Remote hands support, physical security measures, and disaster recovery planning add an extra layer of protection. Virtualization technologies and network latency monitoring further enhance scalability and flexibility. With the increasing importance of data security and regulatory compliance, companies in the BFSI segment must adhere to guidelines from regulatory bodies like the GDPR, which can impose significant fines for breaches.

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The BFSI segment was valued at USD 40.80 billion in 2019 and showed a gradual increase during the forecast period.

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Regional Analysis

North America is estimated to contribute 45% to the growth of the global market during the forecast period.Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

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