Global Data Center Colocation Market Expected to Reach USD 185.0 Billion by 2033 - IMARC Group

December 11, 2024 | Technology & Media

Global Data Center Colocation Market Statistics, Outlook and Regional Analysis 2025-2033

The global data center colocation market size was valued at USD 72.5 Billion in 2024, and it is expected to reach USD 185.0 Billion by 2033, exhibiting a growth rate (CAGR) of 11.0% from 2025 to 2033.

Data Center Colocation Market

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The global colocation market for data centers is witnessing notable expansion, mainly fueled by the rising demand for cloud services, big data, and IoT solutions. For instance, as per industry reports, 90% of the organizations globally leverage cloud systems, with 45% using a private cloud service. As enterprises increasingly migrate to the cloud, they seek scalable and flexible infrastructure to manage vast amounts of data efficiently. Colocation services provide the perfect solution, offering businesses access to advanced data center infrastructure without the high capital expenditures of building their own facilities. Moreover, the proliferation of data centers also supports the growing needs for low-latency, high-performance computing across industries such as banking, healthcare, and retail, further boosting market growth. Additionally, the growing adoption of technologies like artificial intelligence (AI) and 5G continues to demand reliable, high-capacity colocation services, creating a positive market trajectory.

Another key growth factor for the data center colocation market is the amplifying emphasis on policies adherence and data security. Authorities and oversight organizations across the globe are enforcing more rigorous data regulations, privacy laws, such as the GDPR in Europe, which requires companies to store data within specific geographical regions. Colocation providers that offer secure, compliant environments are attracting more customers, especially from sectors like finance and healthcare, which have stringent security requirements. Moreover, sustainability is also playing a critical role in the market, with many providers integrating energy-efficient technologies and renewable energy sources into their operations. For instance, as per industry reports, around 90% of the companies are open to spend more for cleaner energy in third-party colocation data centers. Such green initiatives and inclination towards sustainability not only help meet environmental goals but also appeal to businesses committed to corporate social responsibility (CSR) practices, consequently impacting the market growth positively.

Global Data Center Colocation Market Statistics, By Region

The market research report has also provided a comprehensive analysis of all the major regional markets, which include North America (the United States and Canada); Asia-Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Europe (Germany, France, the United Kingdom, Italy, Spain, Russia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa. According to the report, Asia Pacific accounted for the largest market share due to rapid digitalization, growing cloud adoption, and increasing internet penetration.

Asia Pacific Data Center Colocation Market Trends:

Asia Pacific leads the global data center colocation market due to rapid digital transformation and a surge in data-intensive industries, particularly in countries like Japan, China, and India. The region notably profits from significant investments in cloud computing, IoT, and 5G deployment, alongside a proliferating e-commerce segment. Moreover, beneficial government protocols incentivizing digital infrastructure, coupled with a magnifying population of internet users, further boost demand. For instance, according to the Ministry of Communications, as of March 2024, 954.40 million people in India had internet subscription. Additionally, the robust presence of global technology leaders and the magnification of startups looking for scalable IT solutions contribute to Asia Pacific's leadership in this market. Furthermore, the region’s tactical position also aids cross-border data traffic and colocation services.

North America Data Center Colocation Market Trends:

North America accounts for a significant portion of the global data center colocation market, driven by strong demand for cloud computing, Internet of Things (IoT), and edge technologies. The presence of major tech companies and hyperscalers, along with robust digital infrastructure, fosters market growth. Additionally, strong government policies supporting data protection and the increasing adoption of hybrid IT solutions further enhance demand.

Europe Data Center Colocation Market Trends:

Europe’s data center colocation market is chiefly propelled by amplifying demand for data autonomy, requirement for cloud-based solutions, and GDPR-adherent solutions. Countries like Germany, UK, and France are crucial for market dynamics. Moreover, the increasing emphasis on energy-saving practices and sustainability is compelling operators to leverage green technologies, facilitating significant expansion in colocation services.

Latin America Data Center Colocation Market Trends:

Latin America’s data center colocation market is growing rapidly mainly because of accelerating digitalization and the demand for various businesses to manage huge amounts of data. Countries like Mexico and Brazil are heavily investing in data center infrastructure development to aid both digital transformation and cloud computing. In addition, the notable emergence of social media as well as e-commerce utilization is further bolstering the need for colocation services in the region.

Middle East and Africa Data Center Colocation Market Trends:

The Middle East and Africa (MEA) region is witnessing substantial expansion in data center colocation chiefly due to the rapid growth of smart city ventures and elevated investments in IT infrastructure. Countries like such as South Africa and UAE are steering market growth through technological innovations and fueling need for IoT solutions, cloud services, and digital storage.

Top Companies Leading in the Data Center Colocation Industry

Some of the leading data center colocation market companies include AT&T Inc., CenturyLink Inc., China Telecom Corporation Limited, Coresite Realty Corporation, Cyrusone Inc., Cyxtera Technologies Inc., Digital Realty Trust Inc., Equinix Inc., Global Switch Limited, Internap Corporation, KDDI Corporation, NTT Communications Corporation (Nippon Telegraph and Telephone Corporation), Verizon Enterprise Solutions Inc., among many others. In September 2024, NTT Communications Corporation announced the receival of NVIDIA DGX-Ready Data Center certification for one of its colocation data centers. This certification validates it as a safe data center where several businesses can run their AI-based applications using NVDIA computing framework.

Global Data Center Colocation Market Segmentation Coverage

On the basis of the type, the market has been categorized into retail colocation and wholesale colocation, wherein retail colocation represents the leading segment. This is attributed to its appeal to small and medium enterprises requiring flexible and cost-efficient infrastructure. This segment benefits from increasing demand for tailored solutions, allowing businesses to rent specific server space while leveraging advanced facilities and robust security. In addition, the rise of e-commerce further strengthens this segment's growth trajectory.
Based on the organization size, the market is classified into small and medium enterprises and large enterprises, amongst which large enterprises dominate the market. This is due to their extensive data storage needs and emphasis on scalability and operational efficiency. These organizations leverage colocation services to enhance connectivity and reduce IT overhead while ensuring compliance with stringent regulatory standards. Moreover, as digital transformation accelerates, large enterprises continue to drive substantial demand in this market segment.
On the basis of the end use industry, the market has been divided into BFSI, manufacturing, IT and telecom, energy, healthcare, government, retail, education, entertainment and media, and others. Among these, IT and telecom account for the majority of the market share. This segment is driven by the rising requirement for reliable connectivity and exponential growth in global data consumption. These industries require robust colocation services to support cloud computing, IoT, and 5G networks. Furthermore, the rapid expansion of digital infrastructure and data-intensive technologies underscores their dominant position in the market.

Report Features	Details
Market Size in 2024	USD 72.5 Billion
Market Forecast in 2033	USD 185.0 Billion
Market Growth Rate 2025-2033	11.0%
Units	Billion USD
Scope of the Report	Exploration of Historical Trends and Market Outlook, Industry Catalysts and Challenges, Segment-Wise Historical and Future Market Assessment: Type Organization Size End Use Industry Region
Types Covered	Retail Colocation, Wholesale Colocation
Organization Sizes Covered	Small and Medium Enterprises, Large Enterprises
End Use Industries Covered	BFSI, Manufacturing, IT and Telecom, Energy, Healthcare, Government, Retail, Education, Entertainment and Media, Others
Regions Covered	Asia Pacific, Europe, North America, Latin America, Middle East and Africa
Countries Covered	United States, Canada, Germany, France, United Kingdom, Italy, Spain, Russia, China, Japan, India, South Korea, Australia, Indonesia, Brazil, Mexico
Companies Covered	AT&T Inc., CenturyLink Inc., China Telecom Corporation Limited, Coresite Realty Corporation, Cyrusone Inc., Cyxtera Technologies Inc., Digital Realty Trust Inc., Equinix Inc., Global Switch Limited, Internap Corporation, KDDI Corporation, NTT Communications Corporation (Nippon Telegraph and Telephone Corporation), Verizon Enterprise Solutions Inc., etc.
Customization Scope	10% Free Customization
Post-Sale Analyst Support	10-12 Weeks
Delivery Format	PDF and Excel through Email (We can also provide the editable version of the report in PPT/Word format on special request)

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