The data center colocation market is expanding rapidly, with a projected market size rising from USD 104.2 billion in 2025 to USD 204.4 billion by 2030, at a CAGR of 14.4% during the forecast period. The data center colocation market is witnessing strong momentum due to several key drivers. These include the growing need to support AI and high-density GPU workloads, the rise of hybrid-multicloud interconnection ecosystems for seamless data flow, and increasing data-sovereignty regulations that require local hosting and compliance. These trends are creating new growth opportunities for colocation providers. However, some restraints could limit adoption. The complex interdependency between enterprises and service providers raises concerns about reduced operational control. Additionally, the need for customized infrastructure often conflicts with the standardized models offered by colocation services, creating a barrier for businesses with specific deployment needs.
This model appeals to small and mid-sized businesses, digital companies, and organizations moving to hybrid IT that lack large in-house teams but still need reliable, scalable, and compliant infrastructure. Companies can focus on their core products and services by handing routine tasks to the colocation provider. Traditional colocation remains popular among firms with strong internal IT capabilities and tight budgets, but its growth is slower. As more organizations seek predictable costs and higher service levels, demand for managed colocation is set to outpace other service types.
The scope of the report covers detailed information regarding the major factors, such as drivers, restraints, challenges, and opportunities, influencing the growth of the data center colocation market. A detailed analysis of the key industry players was done to provide insights into their business overview, solutions, and services; key strategies; contracts, partnerships, agreements, new product & service launches, and mergers and acquisitions; and recent developments associated with the data center colocation market. This report also covered the competitive analysis of upcoming startups in the data center colocation market ecosystem.
Managed colocation segment to account for the fastest growth rate during the forecast period
Managed colocation is the fastest-growing service type in the data center colocation market during the forecast period, driven by companies’ need to simplify IT operations and improve uptime. Traditional colocation provides secure rack space, power, cooling, and basic network access, but managed colocation adds remote-hand support, system monitoring, data backup, disaster recovery, and managed network services.This model appeals to small and mid-sized businesses, digital companies, and organizations moving to hybrid IT that lack large in-house teams but still need reliable, scalable, and compliant infrastructure. Companies can focus on their core products and services by handing routine tasks to the colocation provider. Traditional colocation remains popular among firms with strong internal IT capabilities and tight budgets, but its growth is slower. As more organizations seek predictable costs and higher service levels, demand for managed colocation is set to outpace other service types.
Retail colocation to hold the largest market share during the forecast period
Retail colocation will hold the largest share of the service scale segment during the forecast period, driven by its low entry barriers, flexible contract terms, and rapid provisioning capabilities. This model - where multiple tenants share configurable rack, cage, and cabinet space - appeals to small and mid-sized enterprises, regional service providers, and branch operations of larger organizations that require quick access to reliable infrastructure without heavy upfront commitments. The pay-as-you-grow billing structure and smaller minimum power requirements further cement retail colocation’s dominance, enabling businesses to scale seamlessly in response to changing workloads. Wholesale colocation, while the second-largest segment, caters primarily to hyperscalers and large enterprises seeking dedicated space, power, and cooling at scale; it continues to grow steadily but trails retail colocation’s broader addressable market and faster deployment cycles.North America leads the data center colocation market, while Asia Pacific is the fastest-growing region
North America maintains its leadership in the data center colocation market due to its well-established infrastructure, extensive interconnection networks, and strong enterprise demand from finance, healthcare, and cloud providers. Meanwhile, Asia Pacific is rapidly accelerating as the fastest-growing region in colocation, driven by surging investments in cloud and AI infrastructure. For instance, a recent USD 411 million rupiah-denominated loan is being deployed to build a 72‑MW data center campus in Indonesia’s Nongsa Digital Park, highlighting regional appetite for advanced, edge-ready facilities. This growth underscores Asia Pacific’s strategic momentum in hybrid, localized colocation solutions.Breakdown of Primaries
In-depth interviews were conducted with chief executive officers (CEOs), innovation and technology directors, system integrators, and executives from various key organizations operating in the data center colocation market.- By Company: Tier I - 30%, Tier II - 45%, and Tier III - 25%
- By Designation: C-Level Executives - 50%, D-Level Executives - 35%, and others - 15%
- By Region: North America - 50%, Europe - 30%, Asia Pacific - 15%, and Rest of the world - 5%
Research Coverage
This research report categorizes the data center colocation market based on Service Type (Traditional Colocation, Managed Colocation), Service Scale (Retail Colocation, Wholesale Colocation), Workload Type (High Performance Computing (HPC), General purpose IT), Organization Size (SMES, Large Enterprises), End User (Hyperscalers, and Enterprises (Banking, Financial Services, & Insurances (BFSI), IT & ITES, Telecommunications, Government & Public sector, Healthcare & Life Sciences, Retail & Ecommerce, Manufacturing, Energy & Utilities, Other Enterprises)), and Region (North America, Europe, Asia Pacific, Middle East & Africa, and Latin America).The scope of the report covers detailed information regarding the major factors, such as drivers, restraints, challenges, and opportunities, influencing the growth of the data center colocation market. A detailed analysis of the key industry players was done to provide insights into their business overview, solutions, and services; key strategies; contracts, partnerships, agreements, new product & service launches, and mergers and acquisitions; and recent developments associated with the data center colocation market. This report also covered the competitive analysis of upcoming startups in the data center colocation market ecosystem.
Reason to Buy this Report
The report would provide the market leaders/new entrants with information on the closest approximations of the revenue numbers for the overall data center colocation market and its subsegments. It would help stakeholders understand the competitive landscape and gain more insights to better position their business and plan suitable go-to-market strategies. It will also help stakeholders understand the market’s pulse and provide them with information on key market drivers, restraints, challenges, and opportunities.The report provides insights on the following pointers:
- Analysis of key drivers (AI compute facilitator driving demand for specialized colocation infrastructure, digital sovereignty and geopolitical resilience accelerate colocation demand, shared green infrastructure enhances sustainable colocation deployments globally), restraints (complex interdependency raises concerns about provider controlled operations, complex interdependency burden limits seamless integration, talent gap at the edge challenges hybrid it scaling, customization versus standardization remains a key dilemma), opportunities (edge colocation and local ecosystems drive new growth, sustainability as a service gains enterprise attention, AI as a service infrastructure unlocks new growth in colocation), and challenges (colocation sprawl and distributed network management challenges enterprise efficiency, skills deficit hampers hybrid colocation management, regulatory scrutiny and data barriers complicate operations)
- Product Development/Innovation: Detailed insights on upcoming technologies, research & development activities, and new product & service launches in the data center colocation market
- Market Development: Comprehensive information about lucrative markets - the data center colocation market across varied regions
- Market Diversification: Exhaustive information about new products & services, untapped geographies, recent developments, and investments in the data center colocation market
- Competitive Assessment: In-depth assessment of market shares, growth strategies, and service offerings of leading players such as Equinix (US), Digital Realty (US), NTT Data Corporation (Japan), QTS Data Centers (US), KDDI Corporation (Japan), Iron Mountain (US), China Telcom (China), CyrusOne (Texas), DataBank (Texas), EdgeConneX (US), Switch (US), CoreSite (US), Aligned Data Centers (Texas), Flexential (US), TierPoint (US), Cologix (US), ScaleMatrix (US), AT&T (US), Global Data Systems (US), Data Foundary (US), 365 DataCenters (US), Kao Data (UK), Verizon (US), and T-Systems (Germany)
Table of Contents
1 Introduction
2 Research Methodology
4 Premium Insights
5 Market Overview and Industry Trends
6 Data Center Colocation Market, by Service Type
7 Data Center Colocation Market, by Service Scale
8 Data Center Colocation Market, by Workload Type
9 Data Center Colocation Market, by Organization Size
10 Data Center Colocation Market, by End-user
11 Data Center Colocation Market, by Region
12 Competitive Landscape
13 Company Profiles
14 Adjacent and Related Markets
15 Appendix
List of Tables
List of Figures
Companies Mentioned
Equinix- Digital Realty
- Ntt Data
- Qts Data Centers
- Kddi Corporation
- Iron Mountain
- China Telecom Corporation Ltd
- Cyrusone
- Centersquare
- Vantage Data Centers
- Databank
- Edgeconnex
- Switch
- Coresite
- Aligned Data Centers
- Flexential
- Tierpoint
- Cologix
- Trg Datacenters
- Scalematrix
- At&T
- Global Data Systems
- Verne Global
- 365 Data Group
- Bdx Data Centers
Table Information
| Report Attribute | Details |
|---|---|
| No. of Pages | 278 |
| Published | June 2025 |
| Forecast Period | 2025 - 2030 |
| Estimated Market Value in 2025 | 104.2 Billion |
| Forecasted Market Value by 2030 | 204.4 Billion |
| Compound Annual Growth Rate | 14.4% |
| Regions Covered | Global |
| No. of Companies Mentioned | 25 |
