Data Center Colocation Market

Data Center Colocation Market Overview

The global Data Center Colocation Market size was valued at USD 70.28 billion in 2024 and is predicted to reach USD 150.59 billion by 2030 with a CAGR of 13.6% from 2024-2030.

Factors such as rise of Internet of Things technologies, expansion of high-speed internet services and rising volume of healthcare data leads to the growth of the market. Nevertheless, initial cost with data center colocation hinders the market expansion. On the contrary, integration of artificial intelligence opens up great opportunities for industry growth. 

Moreover, top players such as Equinix, Inc., CoreSite, and others are launching products in order to stay in competition. The increasing demand for data-driven solutions is projected to impel significant growth in the market positioning it as a important component of modern IT infrastructure strategies.

Increase in Adoption of Internet of Things Drives the Market Growth

Rise of Internet of Things (IoT) technologies including wearable devices and home automation boost the data center colocation market growth as businesses need adaptable and scalable infrastructure to manage and process the huge data generated by connected devices. 

As per the report of 5G Americas the global IoT subscriptions is expected to rise to 3.3 billion by 2024, and is projected to reach 5 billion by 2028 reflecting a growth of 52% within a time span of 4 years. This growth in IoT subscriptions highlights the increasing demand for robust colocation services to support the expanding digital ecosystem.

Expanding High-Speed Internet Services Fuels the Data Center Colocation Market Demand

The expansion of high internet speed services boost demand for scalable and secure data centers to manage increased traffic prompting telecom companies to partner with colocation providers to meet the evolving requirements of the telecommunications sector. 

According to the report of the World Economic Forum published in 2024, the global telecommunications market is projected to grow from USD 1.81 trillion in 2022 to USD 2.65 trillion by 2030 marking a growth of 46.4% within a time frame of 8 years. This significant growth emphasizes the pivotal role of colocation services in supporting industry’s infrastructure demands.

Growing Volume of Healthcare Data Boosts the Data Center Colocation Market Expansion

The rise in the volume of healthcare data increases demand for scalable, secure and compliant infrastructure to store and process sensitive medical records, patient information and research data that propels the growth of this services. The National Institute of Health states that nearly 30% of global data volume is produced by the medical industry and it is predicted to grow at a CAGR of 36% by 2025. This massive data generation creates demand for colocation services that provide healthcare organizations with reliable solutions to handle sensitive patient information.

High Initial Cost with Data Center Colocation Restricts Market Growth

The extravagant initial cost associated with data center colocation creates problems for the small and medium-sized enterprise to invest in these services that hampers the growth of the market.

Incorporation of Artificial Intelligence Creates Future Opportunity

The integration of artificial integration in data center infrastructure is expected to create significant opportunity of growth for the data center colocation market trends. Artificial intelligence driven analytics offer insights into data traffic patterns that enable better capacity planning and scalability. 

In May 2024, Cologix completed its fourth data center, COL4, in Columbus. This AI ready colocation facility is developed to cater to increased demands for colocation and interconnection services. AI acceptance in data centers will allow providers to innovate and adapt to the changing requirements of businesses that trigger demand for colocation services.

Market Segmentations and Scope of the Study

The data center collocation market report is segmented on the basis of type, tier level, enterprise size, end-users, and region. On the basis of type, the market is segmented into retail, wholesale, and hybrid cloud. On the basis of tier level, the market is distributed into tier 1, tier 2, tier 3, and tier 4. On the basis of enterprise size, the market is classified into small and medium sized enterprise (SMEs) and large enterprise. On the basis of end-users, the market is segmented into BFSI, IT and telecom, government, energy and utilities, and other end users. The regional breakdown includes regions such as North America, Europe, Asia-Pacific, and the Rest of the World (RoW).

Geographical Analysis

North America occupies the largest data center colocation market share and is expected to continue its dominance during the forecast period. This is because the increasing adoption of 5G technology in this region fuels the demand for colocation services driven by the ascending rise in data traffic generated by connected devices and applications. 

The high data speed and low latency offered by 5G networks enable actual time processing of huge amounts of data that creates need for strong and scalable infrastructure in this region. As per the latest report of 5G Americas, the 5G adoption in the region accounted to 32% of all wireless cellular connections and by first quarter of 2024, the connection totaled to around 220 million. 

Therefore, this rapid growth emphasizes the vital importance of this services in facilitating the robust infrastructure needed for processing, storing, and managing the vast amounts of data generated by the 5G ecosystem.

Moreover, presence of major market players in this region such as CoreSite and Equinix Inc. are adopting various business strategies including business expansion to maintain its dominance throughout the industry. 

For example, Equinix expanded its operation in Canada by introducing a new International Business Exchange data center in April 2023 that provides colocation services. This facility is developed to support various sectors including financial services and gaming, by offering space and power for multiple customers within the data center environment. Consequently, such expansions enhance colocation services of data centers for businesses, that in turn propels the growth of the market.

On the other hand, Asia-Pacific shows steady growth in the industry owing to urbanization that fuels the development of smart cities and digital infrastructure, thereby increasing the need for reliable and scalable data storage and connectivity solutions. 

The World Bank Group data states, the urban population of China accounted to 63% in 2021 and it reached 65% of the total population in 2023, reflecting a 3% rise from 2021. This urban growth fuels the need for robust colocation services to support expanding digital ecosystems in densely populated areas.

Also, growing IT industry in this region fuels the market as businesses rely on robust infrastructure for digital operations, creating a heightened demand for secure and efficient data storage solutions to manage the increasing data volumes. This growth creates reliable and secure colocation options that provide scalable infrastructure to manage the rising volume of data traffic. 

India Brand Equity Foundation data states, the growth of IT industry contributed 7.5% to India’s GDP in 2023 and is projected to reach 10% by 2025. This expansion in the IT industry is poised to significantly enhance the market, driving innovation and competition among service providers.

Competitive Landscape

Various market players operating in the data center colocation industry are Equinix, Inc., CoreSite, Ascenty Holding Brasil SA, TierPoint, LLC, NTT Communications Corporation, Digital Realty Trust Inc., Iron Mountain, Inc., CyrusOne, Cirion Technologies, Centersquare, Colt Technology Services Group Limited, Flexential, QTS Realty Trust, LLC, Rackspace Technology, Telehouse International Corporation, and others. These companies continue to adopt various strategies including partnerships and business expansion to maintain their dominance in the sector.

For instance, Digital Realty expanded its business by launching MAA10 data center in India in January 2024 that represents advancement in the data center colocation sector. The facility supports high density infrastructure and provide seamless connectivity that are essential features for colocation services.

Also, in March 2023, Iron Mountain partnered with Web Werks to launch BLR-1 in India designed to provide reliable and scalable colocation services along with cloud, storage and network solutions. This facility addresses the growing demand from hyperscalers and enterprises in Southern India that enriches colocation service options for businesses in the region.

Key Benefits

• The report provides quantitative analysis and estimations of the data center colocation industry from 2025 to 2030, which assists in identifying the prevailing market opportunities.

• The study comprises a deep-dive analysis of the current and future data center colocation industry trends to depict prevalent investment pockets in the market.

• Information related to key drivers, restraints, and opportunities and their impact on the data center colocation market is provided in the report. 

• Competitive analysis of the players, along with their market share is provided in the report.

• SWOT analysis and Porters Five Forces model is elaborated in the study.

• Value chain analysis in the market study provides a clear picture of roles of stakeholders

Data Center Colocation Market Key Segments

By Type 

• Retail

• Wholesale

• Hybrid Cloud

By Tier Level 

• Tier 1

• Tier 2 

• Tier 3

• Tier 4

By Enterprise Size 

• Small and Medium-Sized Enterprise (SMEs)

• Large Enterprise

By End-Users 

• BFSI

• IT and Telecom

• Government

• Energy and Utilities

• Other End Users

By Region

• North America

  • The U.S.

  • Canada

  • Mexico

• Europe

  • The UK

  • Germany

  • France    

  • Italy

  • Spain

  • Denmark

  • Netherlands

  • Finland

  • Sweden

  • Norway

  • Russia

  • Rest of Europe

• Asia-Pacific

  • China

  • Japan

  • India

  • South Korea

  • Australia

  • Indonesia

  • Singapore

  • Taiwan

  • Thailand

  • Rest of Asia-Pacific

• RoW

  • Latin America

  • Middle East

  • Africa

Key Players

• Equinix, Inc.

• CoreSite

• Ascenty Holding Brasil SA

• TierPoint, LLC

• NTT Communications Corporation

• Digital Realty Trust Inc.

• Iron Mountain, Inc. 

• CyrusOne

• Cirion Technologies

• Centersquare

• Colt Technology Services Group Limited

• Flexential

• QTS Realty Trust, LLC

• Rackspace Technology

• Telehouse International Corporation 

REPORT SCOPE AND SEGMENTATION: 

Parameters	Details
Market Size in 2024	USD 70.28 Billion
Revenue Forecast in 2030	USD 150.59 Billion
Growth Rate	CAGR of 13.6% from 2025 to 2030
Analysis Period	2024–2030
Base Year Considered	2024
Forecast Period	2025–2030
Market Size Estimation	Billion (USD)
Growth Factors	The rise of Internet of Things (IoT) technologies boost the growth of market. The expansion of high-speed internet services propels the growth of the market. The increasing volume of healthcare data is boosting the market.
Countries Covered	28
Companies Profiled	15
Market Share	Available for 10 companies
Customization Scope	Free customization (equivalent up to 80 working hours of analysts) after purchase. Addition or alteration to country, regional, and segment scope.
Pricing and Purchase Options	Avail customized purchase options to meet your exact research needs.