Data Center Colocation Market Summary

The global data center colocation market size was estimated at USD 69.41 billion in 2024 and is projected to reach USD 165.45 billion by 2030, growing at a CAGR of 16.0% from 2025 to 2030. Data centers have become a critical component of modern corporate operations, as they support core business applications, store vast volumes of data, and ensure the smooth functioning of IT infrastructure. As digital transformation accelerates across industries, organizations increasingly depend on reliable and scalable data center solutions to maintain operational efficiency and business continuity.

As companies continue to generate and rely on large amounts of data, the demand for advanced IT solutions has increased significantly, driving greater adoption of cloud-based services. Colocation data centers offer enterprises the flexibility to scale their IT resources based on changing business requirements while maintaining high levels of security and performance. Moreover, the substantial costs involved in building, operating, and maintaining in-house data centers, particularly for organizations with variable or unpredictable data workloads, have emerged as a key factor encouraging businesses to shift toward colocation services.

The rapid growth of technologies such as cloud computing, autonomous vehicles, the Internet of Things, and advanced robotics has intensified the need for faster data processing, lower latency, and higher bandwidth. These technologies require high-speed network connectivity and proximity to end users, making colocation data centers an attractive solution. By strategically locating facilities closer to demand centers, colocation providers improve storage efficiency and network performance. Furthermore, the expansion of 5G technology is expected to further accelerate colocation deployments, especially in remote and underserved regions, by enabling ultra-low latency and enhanced connectivity.

Key Market Trends & Insights

• The data center colocation industry in North America held the largest share of 39.0% in 2024, driven by strong digital infrastructure, high cloud adoption, and the presence of major technology companies.
• The data center colocation industry in the U.S. is expected to grow significantly at a CAGR of 14.9% from 2025 to 2030, supported by increasing data traffic, enterprise cloud migration, and rising demand for scalable IT infrastructure.
• By colocation type, the retail colocation segment dominated the data center colocation industry and accounted for a revenue share of nearly 70.0% in 2024, reflecting strong demand from small and medium-sized organizations seeking cost-effective solutions.
• By tier level, the tier 3 segment accounted for the largest revenue share of over 58.0% in 2024, due to its balance of reliability, redundancy, and operational efficiency.
• By enterprise size, the large enterprises segment accounted for the largest revenue share of over 49.0% in 2024, driven by high data storage needs and complex IT requirements.

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Market Size & Forecast

• 2024 Market Size: USD 69.41 Billion
• 2030 Projected Market Size: USD 165.45 Billion
• CAGR (2025-2030): 16.0%
• North America: Largest market in 2024

Key Companies & Market Share Insights

Key players operating in the data center colocation industry are Equinix, Inc., Digital Realty Trust, China Telecom Corporation Limited, NTT Ltd., CyrusOne, and Telehouse. The companies are focusing on various strategic initiatives, including new product development, partnerships & collaborations, and agreements to gain a competitive advantage over their rivals. The following are some instances of such initiatives.

• In September 2024, the US Department of Homeland Security (DHS) granted Equinix, Inc. a contract for colocation services for its Homeland Security Enterprise Network. The tender specifies the provision of "power, connectivity, and related operations and maintenance," with the services encompassing the "Homeland Security Enterprise Network (HSEN) COLO East and West Enterprise cloud access points."
• In July 2024, Digital Realty Trust announced the acquisition of a colocation data center located in the Slough Trading Estate for USD 200 million. This acquisition expands the company's West London market presence and enhances its colocation capabilities in the City and Docklands areas.

Key Players

• China Telecom Corporation Limited
• Cologix
• Colt Technology Services Group Limited
• CoreSite
• CyrusOne
• Centersquare
• Digital Realty Trust
• Equinix, Inc.
• Flexential
• Iron Mountain, Inc.
• NTT Ltd. (NTT DATA)
• QTS Realty Trust, LLC
• Rackspace Technology
• Telehouse (KDDI CORPORATION)
• Zayo Group, LLC.

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Conclusion

The data center colocation market is poised for strong growth as enterprises increasingly prioritize scalable, cost-efficient, and reliable IT infrastructure. Rising cloud adoption, expanding data generation, and the proliferation of data-intensive technologies are reinforcing the importance of colocation services. North America’s leadership and strong growth in the U.S. highlight the region’s advanced digital ecosystem. With retail colocation, tier 3 facilities, and large enterprises driving demand, colocation data centers will remain a vital enabler of digital transformation, high-performance computing, and next-generation connectivity worldwide.