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Data Center Colocation Market Size Forecast: How Big Could The Market Get By 2030?
The data center colocation market size has seen rapid growth in recent years. It is anticipated to expand from $78.01 billion in 2025 to $90.48 billion in 2026, achieving a compound annual growth rate (CAGR) of 16.0%. Historically, this growth can be ascribed to escalating data center costs, the necessity for reliable power and cooling, the increase in internet traffic, the expansion of enterprise IT workloads, and the demand for secure facilities.
The data center colocation market is anticipated to show significant growth over the next few years, expanding to $163.08 billion by 2030, supported by a compound annual growth rate (CAGR) of 15.9%. This growth in the projected timeframe can be attributed to factors such as increased cloud adoption, the spillover of hyperscale demand, new sustainability regulations, the expansion of edge computing, and the demand for low latency connectivity. Prominent trends for this period include enterprises shifting towards colocation, the implementation of high-density rack systems, the development of energy-efficient data center designs, the extension of edge colocation, and facilities prioritizing interconnection.
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Data Center Colocation Market Growth Factors: What’s Supporting Expansion?
The growing need for cloud adoption is anticipated to fuel the expansion of the data center colocation market in the future. Cloud adoption describes the method by which individuals, organizations, or businesses integrate and utilize cloud computing services and resources to enhance their IT capabilities and achieve specific goals. In data center colocation, cloud adoption is leveraged to provide businesses with a secure, reliable, and well-connected environment, facilitating seamless integration, supporting hybrid deployments, and offering the necessary scalability and flexibility for dynamic business settings. For instance, in January 2025, according to AAG IT Services, a UK-based non-government organization, 57% of SMB workloads and 56% of SMB data were hosted in public clouds in 2022, with a further 6% of each expected to migrate to the cloud within the subsequent 12 months. Consequently, by 2023, it is projected that approximately 63% of SMB workloads and 62% of SMB data will be cloud-hosted. Therefore, the rising demand for cloud adoption is propelling the growth of the data center colocation market.
Data Center Colocation Market Segment Breakdown: Which Categories Lead On Revenue?
The data center colocation market covered in this report is segmented –
1) By Type: Retail Colocation, Wholesale Colocation
2) By Enterprise Size: Large Enterprise, Small Scale Enterprise
3) By End-User: BFSI, IT And Telecom, Government And Defense, Healthcare, Other End Users
Subsegments:
1) By Retail Colocation: Single Cabinets, Half Cabinets, Full Cabinets, Caged Space, Custom Suites
2) By Wholesale Colocation: Private Data Center Suites, Dedicated Data Center Space, Large-Scale Colocation
Data Center Colocation Market Industry Trends: What’s Reshaping Demand?
Major corporations operating within the data center colocation market are rolling out advanced technologies, such as Air-Assisted Liquid Cooling (AALC) solutions, to boost their profitability. Air-Assisted Liquid Cooling (AALC) technologies within data center colocation refer to cutting-edge cooling approaches designed to improve the efficiency of managing heat produced by servers and other electronic equipment in a data center setting. For example, in August 2023, Digital Realty, a US-based data center, colocation, and interconnection solutions provider, launched a new high-density colocation service as part of its PlatformDIGITAL. This service aims to tackle data and AI challenges, providing customers an innovative way to enhance AI capabilities and extract value from their data. The high-density colocation services are designed to address issues linked to the rapid expansion of unstructured data and the utilization of artificial intelligence (AI). Available across 28 global markets, the service can support workloads reaching up to 70 kilowatts per rack, employing Air-Assisted Liquid Cooling technology. Responding to customer feedback, Digital Realty is offering standardized configurations and ultra-high-power densities for the swift deployment of high-performance infrastructure worldwide.
Data Center Colocation Market Leading Players And Competitive Positioning
Major companies operating in the data center colocation market are AT&T Inc.; China Telecom Corporation Limited; NTT Ltd.; Element Critical; Global Switch Limited; Equinix Inc.; Iron Mountain Incorporated; Digital Realty Trust Inc.; Rackspace Technology Inc.; Zayo Group Holdings Inc.; CyrusOne Inc.; CoreSite Realty Corporation; Sungard AS; Cyxtera Technologies Inc.; Switch Ltd.; QTS Realty Trust Inc.; EdgeConneX Inc.; Aligned Energy LLC; Netrality Data Centers Inc.; Evoque Data Center Solutions; 365 Data Centers; Stream Data Centers; Compass Datacenters LLC; ServerFarm LLC; Digital Fortress Inc.; RagingWire Data Centers Inc.; DataBank Inc.; Sabey Data Centers LLC; Verizon Communications Inc.
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Data Center Colocation Market Regional Analysis And Top Geography
North America was the largest region in the data center colocation market in 2025. The regions covered in the data center colocation market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
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Wasay has over a decade of experience in market research, data modelling, and analytics, with prior experience at GlobalData and Decision Tree Consulting Services. At The Business Research Company , he leads research operations across syndicated studies, customized consulting engagements, and the Global Market Model platform. His professional experience includes supporting organizations such as Boston Consulting Group, KPMG, and Ernst & Young. Wasay holds a degree in Electronics and Communications Engineering, postgraduate management qualifications from International Management Institute Belgium and Indian School of Business and Entrepreneurship, and completed the Integrated Program in Business Analytics from Indian Institute of Management Indore.
