United States Colocation Market - Forecasts from 2024 to 2029

United States Colocation Market - Forecasts from 2024 to 2029

The United States colocation market is expected to grow at a CAGR of 7.64%, reaching a market size of US$23.908 billion in 2029 from US$14.28 billion in 2022.

The renting space provided by colocation facilities to business companies for servers and computing hardware enables them to remove in-house servers & data centers. The advanced data center technology access provided by colocation offers high security, continuity, and scalability for various applications and data systems.

Market Drivers

Favorable government initiatives and policies.

Major developed economies like the United States is witnessing a significant increase in their internet users owing to which it is actively involved in the establishment of laws & regulations relating to data protection. For instance, in June 2022, US Congress representatives introduced the American Data Privacy and Protection Act which aims to provide extra protection to sensitive data linked to any device or person. Such law establishment will surge the demand for colocation services owing to their high data security feature thereby boosting the market growth during the forecast period.
Growing 5G deployment is positively impacting the colocation market growth in the United States.

The adoption and Deployment of 5G have created a boom in the volume of data traffic thereby creating a shift by companies from the traditional on-premises data center to flexible and efficient colocation data center for enjoying a high level of security and operability during data processing. The United States government realizing the growing trend of 5G adoption is actively participating in the establishment of such technology in the country. For instance, in April 2023, the Biden Administration launched the “Public Wireless Supply Chain Innovation Fund” which will invest US$1.5 billion for the development of interoperable networks thereby securing 5G & next-generation wireless technology usage in the US. Such initiatives to promote 5G technology will boost colocation service demand in the United States for effective data handling and storage during the forecast period thereby augmenting the market growth.

Large enterprises are anticipated to show significant growth

Based on enterprise size, the United States colocation market is segmented as small, medium, and large. The large enterprise is expected to grow at a significant rate during the forecast period of the United States colocation market, owing to the investments by the government for digitizing major sectors in the US such as healthcare. For instance, in June 2021, the US Department of Health and Human Services along with the Office of the National Coordinator of Human Health Technology announced a US$80 million Public Health Informatics & Technology Workforce Development Program to strengthen the United States public health Information Technology.

Key Development
In November 2023: Colocation & wholesale datacenter provider H5 Data Centers announced the expansion of its San Antonio colocation facility to serve the growing demand for colocation in Austin and San Antonio. The Tier II expansion will further cater to the growing IT infrastructure.

Segmentation:

By Type
Retail
Wholesale
Hybrid
By Enterprise Size
Small
Medium
Large
By Industry Vertical
BFSI
Communication Technology
Education
Healthcare
Media and Entertainment
Retail & E-Commerce
Others