Data Center Colocation

Global Data Center Colocation Market to Reach US$143.9 Billion by 2030

The global market for Data Center Colocation estimated at US$69.8 Billion in the year 2024, is expected to reach US$143.9 Billion by 2030, growing at a CAGR of 12.8% over the analysis period 2024-2030. Retail Colocation, one of the segments analyzed in the report, is expected to record a 11.7% CAGR and reach US$97.6 Billion by the end of the analysis period. Growth in the Wholesale Colocation segment is estimated at 15.4% CAGR over the analysis period.

The U.S. Market is Estimated at US$18.8 Billion While China is Forecast to Grow at 11.8% CAGR

The Data Center Colocation market in the U.S. is estimated at US$18.8 Billion in the year 2024. China, the world`s second largest economy, is forecast to reach a projected market size of US$21.8 Billion by the year 2030 trailing a CAGR of 11.8% over the analysis period 2024-2030. Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at a CAGR of 11.4% and 10.8% respectively over the analysis period. Within Europe, Germany is forecast to grow at approximately 9.1% CAGR.

Global Data Center Colocation Market - Key Trends and Drivers Summarized

What Is Data Center Colocation and How Is It Redefining IT Infrastructure Management?

Data center colocation is a service that allows businesses to rent space for their servers and networking equipment in a third-party facility instead of housing them in-house. Colocation provides the physical environment necessary to maintain and protect these IT assets, including space, power, cooling, and physical security. By opting for colocation, companies can benefit from the economies of scale and advanced infrastructure that would be cost-prohibitive to replicate on their own. These facilities offer high-bandwidth access, superior connectivity, and redundancy systems that ensure operational continuity even in the event of power failures or other disruptions. This setup not only helps businesses manage their capital expenditures more efficiently by eliminating the need to construct, maintain, and upgrade their own data centers but also allows them to focus more on their core operations without the logistical concerns of managing IT infrastructure.

How Does Colocation Facilitate Business Growth and Flexibility?

Colocation services provide businesses with the flexibility to scale their operations rapidly without the usual capital investment and time required to expand physical IT infrastructure. As organizations grow and their data needs increase, colocation facilities make it easier to scale up IT resources swiftly—adding more servers or increasing bandwidth capacity can often be accomplished without the extensive planning and execution involved in expanding a private data center. Additionally, colocation facilities often house multiple carriers and service providers within their premises, giving businesses the ability to switch services or augment their capabilities without significant interruptions or logistical challenges. This aspect is particularly beneficial for businesses that require high levels of network reliability and speed, as they can leverage the competitive environment within the colocation facility to negotiate better service agreements and ensure optimal network performance.

What Are the Key Considerations and Trends Influencing Data Center Colocation?

One of the primary considerations for businesses looking into data center colocation is compliance with regulatory standards and data security requirements. Colocation providers must adhere to stringent standards to ensure that they can support businesses in highly regulated industries such as finance and healthcare. As such, many colocation facilities are equipped with advanced security measures, both physical and digital, and are certified under various compliance regimes like HIPAA, SOC 2, or PCI DSS. Moreover, with the increasing emphasis on sustainability, many colocation providers are now investing in green technologies and practices, such as using renewable energy sources and implementing energy-efficient cooling mechanisms. This shift not only helps reduce the environmental impact of these data-intensive operations but also aligns with the corporate responsibility goals of their clients.

What Drives the Growth in the Data Center Colocation Market?

The growth in the data center colocation market is driven by several factors, including the escalating demand for scalable data storage and processing capabilities amid the surge in data generation by businesses. As companies continue to embrace digital transformation, the need for reliable, secure, and compliant IT infrastructure becomes paramount, fueling the demand for colocation services. The shift towards hybrid cloud environments is also a significant driver, as colocation provides a critical physical infrastructure component for hybrid strategies, offering a way to maintain sensitive data on-premises while leveraging cloud computing for less critical resources. Additionally, the global nature of modern business necessitates a presence in multiple markets, and colocation facilities offer a way to establish a local IT footprint without the high cost and complexity of building private data centers in diverse geographic regions. Together, these trends contribute to the robust growth of the colocation market, highlighting its essential role in the future of global IT strategies.

SCOPE OF STUDY:

The report analyzes the Data Center Colocation market in terms of units by the following Segments, and Geographic Regions/Countries:

Segments:
Type (Retail Colocation, Wholesale Colocation); Application (IT & Telecom, BFSI, Healthcare, Media & Entertainment, Retail, Other Applications)

Geographic Regions/Countries:
World; United States; Canada; Japan; China; Europe (France; Germany; Italy; United Kingdom; and Rest of Europe); Asia-Pacific; Rest of World.

Select Competitors (Total 44 Featured) -

• AT&T, Inc.
• China Telecom Corporation Ltd.
• CoreSite Realty Corporation
• Cyrusone LLC
• Cyxtera Technologies, Inc.
• Digital Realty Trust, Inc.
• Dupont Fabros Technology, Inc.
• Equinix, Inc.
• Global Switch Holdings Ltd.
• Internap Corporation
• Interxion Holding NV
• KDDI Corporation
• Level 3 Communications, Inc.
• NTT Communications Corporation
• Verizon Enterprise Solutions

TARIFF IMPACT FACTOR

Our new release incorporates impact of tariffs on geographical markets as we predict a shift in competitiveness of companies based on HQ country, manufacturing base, exports and imports (finished goods and OEM). This intricate and multifaceted market reality will impact competitors by artificially increasing the COGS, reducing profitability, reconfiguring supply chains, amongst other micro and macro market dynamics.

We are diligently following expert opinions of leading Chief Economists (14,949), Think Tanks (62), Trade & Industry bodies (171) worldwide, as they assess impact and address new market realities for their ecosystems. Experts and economists from every major country are tracked for their opinions on tariffs and how they will impact their countries.

We expect this chaos to play out over the next 2-3 months and a new world order is established with more clarity. We are tracking these developments on a real time basis.

As we release this report, U.S. Trade Representatives are pushing their counterparts in 183 countries for an early closure to bilateral tariff negotiations. Most of the major trading partners also have initiated trade agreements with other key trading nations, outside of those in the works with the United States. We are tracking such secondary fallouts as supply chains shift.

To our valued clients, we say, we have your back. We will present a simplified market reassessment by incorporating these changes!

APRIL 2025: NEGOTIATION PHASE

Our April release addresses the impact of tariffs on the overall global market and presents market adjustments by geography. Our trajectories are based on historic data and evolving market impacting factors.

JULY 2025 FINAL TARIFF RESET

Complimentary Update: Our clients will also receive a complimentary update in July after a final reset is announced between nations. The final updated version incorporates clearly defined Tariff Impact Analyses.

Reciprocal and Bilateral Trade & Tariff Impact Analyses:

USA
CHINA
MEXICO
CANADA
EU
JAPAN
INDIA
176 OTHER COUNTRIES.

Leading Economists - Our knowledge base tracks 14,949 economists including a select group of most influential Chief Economists of nations, think tanks, trade and industry bodies, big enterprises, and domain experts who are sharing views on the fallout of this unprecedented paradigm shift in the global econometric landscape. Most of our 16,491+ reports have incorporated this two-stage release schedule based on milestones.

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