Data Center Colocation Market - Global Forecast 2025-2032

The data center colocation market is rapidly evolving as organizations prioritize scalable, secure, and cost-efficient infrastructure. Senior decision-makers face complex demands balancing digital transformation, regulatory shifts, and competitive innovation, driving increased adoption of advanced colocation strategies across diverse industries.

Market Snapshot: Data Center Colocation Market Growth and Trajectory

The data center colocation market grew from USD 63.47 billion in 2024 to USD 70.36 billion in 2025. It is expected to continue expanding at a compound annual growth rate of 11.38%, reaching USD 150.39 billion by 2032. This strong momentum reflects enterprises’ need for flexible infrastructure to support digital business models, heightened compliance scrutiny, and emerging hybrid and edge deployments fueling worldwide demand.

Scope & Segmentation of the Data Center Colocation Market

• Type: Retail colocation and wholesale colocation
• Service Type: Cloud on-ramp connectivity, interconnection services, remote hands services, security & compliance services, space & power rental
• Tier Level: Tier 1, Tier 2, Tier 3
• Power Capacity: Low power (< 1 MW), medium power (1-5 MW), high power (> 5 MW)
• Enterprise Size: Large enterprises, small & medium enterprises
• Deployment Type: Core data centers, disaster recovery data centers, edge data centers
• End User Industry: Banking, financial services & insurance, energy, healthcare, IT & telecom, media & entertainment, retail
• Regions Covered: Americas (North America: United States, Canada, Mexico; Latin America: Brazil, Argentina, Chile, Colombia, Peru), Europe, Middle East & Africa (Europe: United Kingdom, Germany, France, Russia, Italy, Spain, Netherlands, Sweden, Poland, Switzerland; Middle East: United Arab Emirates, Saudi Arabia, Qatar, Turkey, Israel; Africa: South Africa, Nigeria, Egypt, Kenya), Asia-Pacific (China, India, Japan, Australia, South Korea, Indonesia, Thailand, Malaysia, Singapore, Taiwan)
• Leading Providers Profiled: KDDI Corporation, PointOne Corp., AtlasEdge Data Centres, 365 Data Centers, China Telecom Global Limited, Colt Group Holdings Limited, CoreSite, Cyfuture India Pvt. Ltd., DartPoints, Deft by ServerCentral, LLC, Digital Realty Trust Inc., Eaton Corporation, Equinix, Inc., Fujitsu Limited, Global Switch Limited, Internap Holding LLC, Iron Mountain Incorporated, Mantra Data Centers, Netrality Properties, LP, NTT Communications Corporation, Panduit Corp., QTS Realty Trust, Inc., Rittal GmbH & Co. KG, ScaleMatrix Holdings, Inc., Singtel Group, Telehouse International Corporation, Vapor IO, Inc., Verizon Communications Inc., Zenlayer Inc.

Key Takeaways for Senior Decision-Makers

• Colocation is increasingly critical in enterprise digital transformation strategies, offering advantages in operational resilience and scalability.
• Deployment of edge and hybrid cloud models is lending urgency to site selection, interconnection, and proximity to end users.
• Technology advances in cooling, power efficiency, and facility management allow businesses to improve predictability, optimize costs, and reduce risks of legacy infrastructure.
• Provider innovation is focused on modular design, advanced security, and integration with cloud and carrier ecosystems to differentiate service portfolios.
• Environmental targets are informing new site design and energy procurement strategies, creating alignment with sustainability mandates across key industries.
• Regional trends highlight that market drivers, regulatory frameworks, and infrastructure investments can vary significantly, requiring tailored approaches.

Tariff Impact on Supply Chains and Procurement Strategies

The introduction of US tariffs in 2025 poses challenges for data center colocation operators, especially regarding imported servers and critical infrastructure equipment. Providers are re-evaluating supplier strategies, expanding their sourcing networks, and pursuing localized assembly and modular manufacturing to contain rising costs and mitigate supply chain disruptions. Contract structures are adapting with contingency clauses, while accelerated depreciation options support financial risk management. Ongoing engagement with policy-makers aims to secure possible exemptions, though operators must refine scenario planning to adapt to evolving trade landscapes.

Methodology & Data Sources

This analysis employs a comprehensive research methodology, combining structured executive interviews, facility site assessments, and in-depth secondary reviews, such as market publications and regulatory filings. Quantitative and qualitative insights are peer-reviewed, ensuring accurate segmentation, technology trends evaluation, and robust competitive intelligence.

Why This Report Matters

• Supports evidence-based decisions on market entry, expansion, or vendor selection by synthesizing real-world trends and actionable intelligence.
• Equips stakeholders with clarity on regulatory, technological, and supply chain developments, enabling proactive risk and opportunity management.
• Delivers a detailed, segment-level understanding for investment planning, operational optimization, and capability benchmarking.

Conclusion

The data center colocation market is at a pivotal juncture, shaped by digital transformation, regulatory requirements, and competitive innovation. Strategic, sustainable, and adaptive infrastructure investments will drive performance and resilience for forward-thinking organizations.

 

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