| Study Period | 2019 - 2030 |
| Market Size (2025) | USD 105.91 Billion |
| Market Size (2030) | USD 248.84 Billion |
| CAGR (2025 - 2030) | 18.63 % |
| Fastest Growing Market | Asia Pacific |
| Largest Market | North America |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Colocation Market Analysis
The Colocation Market size is estimated at USD 105.91 billion in 2025, and is expected to reach USD 248.84 billion by 2030, at a CAGR of 18.63% during the forecast period (2025-2030).
- Driven by technological advancements and a surging demand for efficient data management, the colocation market is witnessing robust growth. As IoT devices proliferate and big data analytics and digital content expand, the appetite for colocation services intensifies. Major players like Amazon and Google are leveraging colocation to adeptly handle their vast data reservoirs.
- By outsourcing data center management to colocation providers, businesses can sharpen their focus on core activities while boosting operational efficiency. Furthermore, innovations in modular data centers and edge computing are amplifying scalability and efficiency, further fueling the demand for colocation services.
- Sustainability is becoming paramount in the colocation sector. Many providers are pivoting towards renewable energy and energy-efficient technologies to lessen their environmental footprint. A testament to this trend is Huawei's recent unveiling of sustainable data center solutions.
- With cloud services gaining traction, numerous enterprises are gravitating towards colocation solutions for more adept IT infrastructure management. This shift is especially evident among large enterprises, which, due to their substantial data volumes, necessitate scalable solutions.
- However, customers often grapple with challenges like limited infrastructure control and a dearth of customization in colocation services. Such limitations can hinder businesses with unique IT needs that standardized offerings can't address. Additionally, the United States stands out as a costly locale for data center development, with expenses hovering between USD 10 to USD 11 million per megawatt (MW). The projected annual increase in these costs further complicates investment decisions for new entrants into the market.
Colocation Market Trends
BFSI to Hold Significant Share
- The colocation market sees the BFSI sector as a dominant player, driven by its urgent need for secure and dependable data management. Stringent regulations on data security and privacy propel this segment's growth, emphasizing the need for a robust infrastructure to ensure compliance. Moreover, the rise of technologies like cloud computing and IoT is set to amplify the demand for colocation services in the BFSI sector, as these innovations seek the scalability that colocation facilities readily offer.
- As digital banking users surge in regions like India and Ireland, the appetite for colocation services is poised to grow. Compliance certifications, such as SOX, GDPR, and PCI-DSS, validate a provider's adherence to banking sector regulations. Certifications like ISO 27001 further underscore a provider's dedication to top-tier information security management and data protection standards.
- Banks gravitate towards colocation services for their unparalleled physical security. Fortified with multiple defense layers, these facilities ensure maximum protection. LightWave Networks, catering to banks across the U.S., offers colocation services meticulously designed for stringent data security. Their state-of-the-art data centers stand as a testament to their commitment, providing a fortified haven for colocation servers and IT infrastructure.
- Banks and other financial institutions not only house personal and sensitive financial data for their customers, they process high volumes of transactions between accounts every day. Not meeting the PCI 3 requirements could result in failing an audit and exposing banks and financial companies to risk of data breaches as a result. Colocation providers understand the severity of PCI DSS compliance and the risks associated with failing an audit.
- Whether financial organization has one server or many more, it does not matter. With colocation, user will always have the option to upsize or downsize depending on the needs. Yet, scaling up has particular benefits to housing the servers at a colocation facility, and as a growing business, this would be the ideal fit for user.
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North America is Expected to Hold a Major Share of the Market
- North America's data center colocation market is booming, fueled by surging demand for cloud services, big data analytics, and IoT applications.
- Emerging technologies like 5G, AI, and quantum computing are intensifying the need for colocation services, pushing businesses to seek more space and streamlined data management. Regions such as Virginia and the Midwest are witnessing a surge in investments, thanks to infrastructure enhancements and business-friendly regulations luring data center operators.
- In the U.S., the Southern region dominates the market share, thanks to its favorable climate and lower energy costs. Meanwhile, the Northeast is set to see the fastest growth, bolstered by robust infrastructure and a rising appetite for renewable energy. Construction activity has surged, with preleasing rates hitting 84%, underscoring a strong demand for new facilities.
- In Canada, data consumption is on the rise, with Ericsson reporting average monthly download and upload traffic jumping from 2.53 Gbps in 2019 to 7.5 Gbps in 2023. This uptick underscores the growing reliance on colocation facilities. Currently, colocation facilities in Canada boast an average occupancy rate of 85%, with projections suggesting it will surpass 87% by 2029, driven by the escalating use of cloud services.
- Moreover, the digital economy's expansion, coupled with investments in small and medium enterprises (SMEs) and the rollout of high-speed internet and 5G networks, are pivotal in propelling market growth. With technological advancements and a deepening dependence on digital infrastructure, North America's colocation market is poised for significant expansion. This trajectory not only benefits established players but also opens doors for newcomers, as businesses increasingly seek scalable and efficient data management solutions.
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Colocation Industry Overview
The Colocation Market is highly competitive and fragmented, primarily driven by the presence of major players. These key players employ strategies such as mergers, acquisitions, and product innovations to maintain a competitive edge and broaden their global footprint. Key player include Equinix, Inc., Digital Realty Trust, Inc., Cyxtera Technologies, Inc., and others.
In summary, the data colocation market is poised for robust growth driven by increasing data demands, technological advancements, and a shift towards outsourcing IT infrastructure management. As businesses continue to prioritize efficiency and scalability, the relevance of colocation services will only increase in the coming years.
Colocation Market Leaders
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Equinix, Inc.
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Digital Realty Trust, Inc.
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Cyxtera Technologies, Inc.
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CoreSite Realty Corporation
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CyrusOne Inc.
- *Disclaimer: Major Players sorted in no particular order
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Colocation Market News
- September 2024: The National Stock Exchange (NSE) plans to expand its colocation data centre at its headquarter in Mumbai for trading members with an almost three-fold increase in number of racks to over 4,000 within the next three years.
- January 2024: Digital Realty, the largest global provider of cloud- and carrier-neutral data center, colocation and interconnection solutions, announced the launch of its first data center in India, on a 10-acre campus capable of supporting up to 100 megawatts of critical IT load capacity that is located in the heart of Chennai's industrial and manufacturing hub.
Colocation Industry Segmentation
Colocation is when organizations place their own servers and other essential computing hardware for data storage in space rented in a physical data center owned and/or operated by a third party. Typically, colocation services include the building in which everything is housed, as well as networking, physical security, redundant power and redundant cooling components, which then support the servers and storage provided by the customer.
The colocation market is segmented by type (retail, wholesale, hybrid), by tier (tier 1 and 2, tier 3, tier 4), by enterprises (SMEs, large enterprises), by end-users (BFSI, IT and telecom, e-commerce, government, manufacturing, media and entertainment, other end-users), by geography (North America, Europe, Asia-Pacific, Latin America, Middle East and Africa). The market sizes and forecasts are provided in terms of value (USD) for all the above segments.
| By Type | Retail |
| Wholesale | |
| Hybrid | |
| By Tier | Tier 1 and 2 |
| Tier 3 | |
| Tier 4 | |
| By Enterprises | SMEs |
| Large Enterprises | |
| By End-users | BFSI |
| IT and Telecom | |
| E-commerce | |
| Government | |
| Manufacturing | |
| Media and Entertainment | |
| Other End-users | |
| By Geography*** | North America |
| Europe | |
| Asia | |
| Australia and New Zealand | |
| Latin America | |
| Middle East and Africa |
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Colocation Market Research FAQs
How big is the Colocation Market?
The Colocation Market size is expected to reach USD 105.91 billion in 2025 and grow at a CAGR of 18.63% to reach USD 248.84 billion by 2030.
What is the current Colocation Market size?
In 2025, the Colocation Market size is expected to reach USD 105.91 billion.
Who are the key players in Colocation Market?
Equinix, Inc., Digital Realty Trust, Inc., Cyxtera Technologies, Inc., CoreSite Realty Corporation and CyrusOne Inc. are the major companies operating in the Colocation Market.
Which is the fastest growing region in Colocation Market?
Asia Pacific is estimated to grow at the highest CAGR over the forecast period (2025-2030).
Which region has the biggest share in Colocation Market?
In 2025, the North America accounts for the largest market share in Colocation Market.
What years does this Colocation Market cover, and what was the market size in 2024?
In 2024, the Colocation Market size was estimated at USD 86.18 billion. The report covers the Colocation Market historical market size for years: 2019, 2020, 2021, 2022, 2023 and 2024. The report also forecasts the Colocation Market size for years: 2025, 2026, 2027, 2028, 2029 and 2030.
Colocation Industry Report
Statistics for the 2025 Colocation market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Colocation analysis includes a market forecast outlook for 2025 to 2030 and historical overview. Get a sample of this industry analysis as a free report PDF download.
